CHANCELLOR Kwasi Kwarteng has been sacked, carrying the can for the ill-judged ‘mini-budget’ which has caused economic turmoil since it was announced three weeks ago today.
‘I’m going nowhere’ Kwarteng, Prime Minister Liz Truss’s choice as Chancellor, was recalled from an IMF meeting in Washington DC this morning to be told the news.
Prime Minister Liz Truss will desperately hope that the departure of close ally Kwarteng will appease the markets. She made the following brief statement confirming a humiliating U-turn this afternoon:
Good afternoon,
My conviction that this country needs to go for growth is rooted in my personal experience.
I know what it’s like to grow up somewhere that isn’t feeling the benefits of growth.
I saw what that meant and I am not prepared to accept that for our country.
I want a country where people can get good jobs, new businesses can set up and families can afford an even better life.
That’s why from day one I’ve been ambitious for growth.
Since the 2008 financial crisis, the potential of this great country has been held back by persistently weak growth.
I want to deliver a low tax, high wage, high growth economy.
It’s what I was elected by my party to do.
That mission remains.
People across this country rightly want stability.
That is why we acted to support businesses and households with their energy costs this winter.
It’s also the case that global economic conditions are worsening due to the continuation of Putin’s appalling war in Ukraine.
And on top of this, debt was amassed helping people through the Covid pandemic.
But it is clear that parts of our mini budget went further and faster than markets were expecting. So the way we are delivering our mission right now has to change.
We need to act now to reassure the markets of our fiscal discipline.
I have therefore decided to keep the increase in corporation tax that was planned by the previous government. This will raise £18 billion per year.
It will act as a down-payment on our full Medium-Term Fiscal Plan which will be accompanied by a forecast from the independent OBR.
We will do whatever is necessary to ensure debt is falling as a share of the economy in the medium term.
We will control the size of the state to ensure that taxpayers’ money is always well spent.
Our public sector will become more efficient to deliver world-class services for the British people.
And spending will grow less rapidly than previously planned.
I met the former Chancellor earlier today. I was incredibly sorry to lose him. He is a great friend and he shares my vision to set this country on the path to growth.
Today I have asked Jeremy Hunt to become the new Chancellor.
He is one of the most experienced and widely respected government ministers and parliamentarians.
And he shares my convictions and ambitions for our country.
He will deliver the Medium-Term Fiscal Plan at the end of this month.
He will see through the support we are providing to help families and businesses including our Energy Price Guarantee that’s protecting people from higher energy bills this winter.
And he will drive our mission to go for growth, including taking forward the supply side reforms that our country needs.
We owe it to the next generation to improve our economic performance to deliver higher wages, new jobs and better public services, and to ease the burden of debt.
I have acted decisively today because my priority is ensuring our country’s economic stability.
As Prime Minister, I will always act in the national interest.
This is always my first consideration.
I want to be honest, this is difficult. But we will get through this storm.
And we will deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.
Kwarteng’s replacement – and the UK’s fourth Chancellor in a tumultuous 2022 – is none other than veteran former health secretary Jeremy Hunt.
Hunt supported Rishi Sunak – who’s predictions on the economy have been proved painfully accurate – in the recent Tory leadership election.
Hunt himself was an early casualty in the recent Tory leadership election and was also once voted as the most unpopular front-line politician of all time!
Clearly another popular choice … what could possibly go wrong?
HM Treasury issued the following statement this evening:
Government update on Corporation Tax
The Prime Minister has set out that the way the government is delivering on its mission to achieve a low tax, high wage, high growth economy is to change.
The legislated increase in the Corporation Tax rate from April 2023 will go ahead, with most small businesses benefitting from the new small profits rate.
Chancellor Jeremy Hunt will deliver the Medium-Term Fiscal Plan on 31 October, detailing action to get debt falling as a percentage of GDP over the medium term.
The government has today [Friday 14 October] announced that Corporation Tax will increase to 25% from April 2023 as already legislated for, raising around £18 billion a year and acting as a down payment on its full Medium-Term Fiscal Plan.
The decision has been taken in recognition of the need to ensure the UK’s economic stability and reassure markets of its commitment to fiscal discipline, after elements of September’s Growth Plan went further and faster than markets were expecting.
The Prime Minister has set out that the government is prepared to do whatever is necessary to ensure debt is falling as a share of the economy in the medium term and to ensure that taxpayers’ money is well spent, putting public finances on a sustainable footing.
The previously announced small profits rate of Corporation Tax will be maintained. Smaller or less profitable businesses will not pay the full 25% rate, and companies with less than £50,000 of profit – the large majority – will not see any increase at all, continuing to pay Corporation Tax at 19%.
The UK’s corporate tax regime will remain competitive and supportive of growth at the 25% rate, continuing to be the lowest rate in the G7. As part of the forthcoming tax review, the government will look at how the tax system can go further to promote growth and investment.
The government is committed to growing the economy and taking forward supply-side reforms that will ignite strong and sustained growth that delivers prosperity for the UK.
Chancellor of the Exchequer Jeremy Hunt will set out the government’s Medium-Term Fiscal Plan on 31 October, alongside a full forecast from the independent Office for Budget Responsibility.
Statement given by Education Secretary John Swinney’s statement to the Scottish Parliament yesterday (11 August, 2020):
Presiding Officer, the COVID pandemic has inflicted much suffering and hardship on our society.
Many of our young people have had to face that pain across different aspects of their lives.
I want to make clear I understand that anguish and I can see that, for some, the SQA results process made that worse.
We set out to ensure that the system was fair.
We set out to ensure it was credible.
But we did not get it right for all young people.
Before I go any further, I want to apologise for that.
In speaking directly to the young people affected by the downgrading of awards – the seventy-five thousand pupils whose teacher estimates were higher than their final award – I want to say this : I am sorry.
But, Presiding Officer, sorry as I am, I know that an apology is not enough.
I watched the pictures of the spirited, articulate young people demonstrating in George Square on Friday. I have spoken directly to pupils who wrote to me. To Nicole Tate, Lauren Steele, Eva Peteranna, Erin Bleakley, Subhan Baig and Eilidh Breslin and I want to thank them for the passion and the clarity they brought to our discussions. And I have heard from parents and teachers.
I have listened and the message is clear. They don’t just want an apology. They want to see this fixed and that is exactly what I will now do.
Presiding Officer, the exceptional circumstances of this year meant it was not safe to hold exams in the Spring.
I said we would need to do our utmost to ensure that we protect the interests and life chances of our young people who were due to sit exams. It has always been imperative that their achievements had to be rightly and fairly recognised. I wanted the 2020 cohort to be able to hold their heads high and gain the qualifications and awards that they deserve after many years of hard work.
Covid meant there was no established process for how to achieve this. All of this had to be developed at pace after we announced that schools required to close on 20 March.
I asked the SQA to develop an alternative approach to certification to ensure that young people could receive awards this year.
The SQA developed a model, in a very short space in time, which gathered teachers’ and lecturers’ estimates in the absence of any other information and involved moderation of these estimates across all centres to maintain standards.
This resulted in an increase in the pass rate at National 5 of 2.9%, Higher at 4.2% and Advanced Higher of 5.5%.
Before I go any further, let me congratulate those tens of thousands of young people who achieved that strong result.
But the system also meant some people did not receive awards they felt they were capable of achieving – and that their teachers believed they deserved.
The focus has, understandably, been on the impact on young people from deprived backgrounds.
The defining mission of this Government is to do all that we can to improve the life chances of children and young people living in poverty and we have been focused intensely on that mission throughout this Parliament.
The fact is the results last week produced higher increases in the pass rates amongst young people from deprived backgrounds than from any other group.
I commend these young people on their achievements.
But that picture does not disguise nor detract from the clear anger and frustration amongst some young people and their families about their results.
That anger stems from the unfairness they feel is at the heart of the model for certification we put in place.
This process relied on the professional judgement of teachers and lecturers, and we know that it was subsequently the case that the overwhelming majority, around three quarters of these grade estimates, were not adjusted at all.
This is a demonstration of the strength within our teaching profession, the sound understanding of standards across the suite of qualifications and through Curriculum for Excellence. I want to thank the teaching profession for the care and attention which went in to making every individual estimated grade.
The estimates received in May showed an increase in attainment at grades A-C by 10.4 percentage points for National 5s, by 14 percentage points for Highers, and by 13.4 percentage points for Advanced Highers. These estimates, if awarded without moderation, would have represented a very significant increase in the pass rate across the board and a one year change without precedent in Scottish exam history.
To ensure that they carried out what I asked of them, that the results were to be certificated on the basis of maintaining standards across all centres, the SQA judged that increases of this nature could not be sustained without moderation.
Moderation is not a new process. It is an annual process, and is widespread across all countries where exams take place.
It helps to ensure that standards are maintained over time.
In previous years moderation was applied to quality assure centre assessment judgements of performance. This year it was applied to teacher and lecturer estimates.
The SQA have provided a significant amount of information regarding how their methodology works which I will not re-state again today. Some have called for this to have been done earlier. But every year, SQA provide the details of their marking methodology on results day, and whilst the methodology has changed this year, the principle remains the same of publishing on results day.
The moderation methodology consisted of both national and local moderation and was robust and based on a number of principles which SQA have set out.
There was always going to be a risk with this approach that despite best efforts some learners would see a grade adjusted in a way that did not reflect their own potential. That is why the SQA included an open, free appeals process from the outset in their approach.
As a result of the SQA moderation process, 134,000 teacher estimates were adjusted, with just under 76,000 candidates having one or more of their grades lowered when compared to the teacher estimate.
Despite the headline improvements in the pass rate at National 5, Higher and Advanced Higher, despite the fact that the pass rate amongst pupils in the most deprived areas increased at a sharper rate than those in the least deprived communities, and despite the fact there was progress in closing the attainment gap, the results left many young people feeling that their future had been determined by statistical modelling rather than their own capability and capacity. That has left a feeling of unfairness in the minds of young people.
I draw three conclusions from all of this.
Firstly, we were concerned that grade inflation – through accepting the original estimates from teachers – would run the risk of undermining the value of qualifications in 2020.
In the light of events, and of listening to young people, we now accept that concern, which is not without foundation, is outweighed by the concern that young people, particularly from working class backgrounds may lose faith in the Education system and form the view that no matter how hard you work, the system is against you. Education is the route out of poverty for young people in deprived communities and we cannot risk allowing that view to take hold.
Secondly, there is a view that relying on teacher judgment this year alone may give young people an incomparable advantage with pupils in other years.
That view has to be weighed against the massive disadvantage that Covid has given young people through the loss of schooling, social interaction, pressure on mental wellbeing and, in some cases, the heart break of bereavement.
Perhaps our approach to maintaining standards for the 2020 cohort alongside every other year – even though 2020 is so unique – did not fully understand the trauma of COVID for this year group and did not appreciate that a different approach might actually help to even things out.
And thirdly this year is and must be seen as unique.
2020 has turned our society upside down. It cannot fairly be compared to previous years and nor can it set an automatic precedent for future years. But it perhaps merits taking a different approach in relation to certification.
Before I move on to how we resolve this issue, I want to be very clear today about the role of the Scottish Qualifications Authority. As I have made clear already, I asked the SQA to ensure that the qualifications of 2020 would be comparable to the qualifications of any other year despite the extraordinary times in which we are living.
The SQA undertook the task I set them and did so in good faith and I make no criticism of their actions in so doing. I am grateful to everyone at the SQA for the professional approach they have taken.
I will therefore now set out how I intend to resolve this issue. I can confirm to Parliament today that all downgraded awards will be withdrawn.
Education Secretary John Swinney
Using powers available to me in the Education (Scotland) Act 1996, I am today directing the SQA to re-issue those awards based solely on teacher or lecturer judgement.
Schools will be able to confirm the estimates they provided for pupils to those that are returning to school this week and next.
The SQA will issue fresh certificates to affected candidates as soon as possible and, importantly, will inform UCAS and other admission bodies of the new grades as soon as practical in the coming days to allow for applications to college and university to be progressed.
As the First Minister confirmed yesterday, in those cases where moderation led to an increased grade, learners will not lose that award. Many of those young people will already have moved on to secure college or university places on the strength of the awards made to them. To unpick them now would not in any way be fair.
Finally, due to the unique circumstances of this situation, we will this year make provision for enough places in universities and colleges to ensure that no one is crowded out of a place they would otherwise have been awarded.
The outcomes from the 2020 SQA national qualifications this year will be updated and a revised statistical release will be available from 31 August. However, I can confirm that the provisional revised 2020 results, based on the professional judgements of Scotland’s teachers and lecturers, can be summarised as follows:
A National 5 pass rate of 88.9%, this is 10.7 percentage points higher than 2019. A Higher pass rate of 89.2%, 14.4 percentage points higher than 2019; and an Advanced Higher pass rate of 93.1%, which is 13.7 percentage points higher than 2019.
I can also confirm that that the final new headline results for National 5s, Highers and Advanced Highers will be published by the SQA on 21 August.
A result of this change in approach to awarding qualifications, means there will no longer be the need for exactly the same appeals process that was planned to consider cases where awarded grades were lower than teacher estimates.
There remains the need for the option of an appeal in some circumstances and detail on this will be set out by the end of the week.
Presiding Officer, there are many lessons we need to learn from our experience through this pandemic, and the difficult decisions we have had to make in unprecedented circumstances.
The 2020 SQA results have sparked a lot of debate about the future of assessment and qualifications in Scotland and the best way to recognise learners’ achievements.
We have already commissioned the OECD to conduct an independent review of Curriculum for Excellence. A key focus of this exercise is curriculum design and this already includes looking at our approach to assessment, qualifications and other achievements and how well they articulate with the curriculum, learning and teaching.
We will work with our partners at the OECD with a view to extending the remit of the Curriculum for Excellence review to include recommendations on how to transform the Scottish approach to assessment and qualifications, based on best practice globally.
Even before a broader review takes place, however, we need to quickly look at the immediate lessons of this year’s awards process.
Coronavirus has not gone away and, while we expect next year’s exams to go ahead, we need to put in place the right plans to make sure we don’t find ourselves in the same situation again.
I am aware that many teachers will be keen to understand fully the arrangements for national qualifications in 2021. The Education Recovery Group has discussed a number of options in relation to this, and I confirm that the SQA will begin a rapid consultation exercise on options for change later this week.
This will include consideration of key issues such as increasing optionality in question papers, removing components of course assessment and adjusting the volume of evidence required in coursework tasks.
In addition, however, I am today announcing that an Independent Review will be led by Professor Mark Priestley of Stirling University.
The review will look at events following the cancellation of the examination diet and the alternative certification model put in place by SQA. Areas to be considered include:
the advice provided to awarding centres by the SQA and local authorities;
the approach developed in relation to estimating learners’ grades;
teachers’ estimates;
the moderation methodology used by the SQA;
the proposed appeals process;
the impact on young people, and their families;
transparency and the role of scrutiny of the process, and
feedback received from teachers and lecturers on the grades awarded last week.
Given the urgency, I have asked for an initial report with recommendations on how we should go forward this coming year within five weeks.
These are exceptional times, and in exceptional times truly difficult decisions have to be made.
It is deeply regrettable that we got this wrong.
I am sorry for that.
We have listened to young people and I hope that all will now feel satisfied that they have achieved the grades which their teachers and lecturers judged that they deserved.
I assure Parliament that we will look to learn lessons from the process of awarding qualifications this year that will help to inform any future actions.
Finally, I would like to thank all of Scotland’s children, young people and adult learners for the incredible resilience they have shown throughout the COVID-19 pandemic .
We are immensely proud of all that they have achieved.
I hope that our pupils now move forward confidently to their next step in education, employment or training with the qualifications that teachers or lecturers have judged were deserved.
COVID has placed, at times, unbearable pressures on us all and I wish our learners well in building on the achievements they have justifiably been awarded in these most difficult of days.
Mr Swinney faces a vote of no confidence at Holyrood tomorrow.
