[UK] Second U-turn as chancellor brings forward fiscal plan

The UK’s new Chancellor, Kwasi Kwarteng, has been forced to make a second humiliating U-turn after dramatic markets reactions to his package of tax cuts, Wales Online reports.

Less than 24 hours after reversing his plan to scrap the 45p top rate of income tax, the Chancellor has announced that the date for his new fiscal plan is being brought forward.

Mr Kwarteng is now expected to publish details on how the cuts will be paid for later this month despite previously insisting he would wait until November 23. He reportedly says he wants to "move forward" with no "distractions".

The Chancellor acknowledged the "turbulence" caused by his mini-budget in a speech to the Conservative Party conference in Birmingham. The pound's value plummeted, borrowing costs soared and the Bank of England was forced to bail out pension funds.

Despite the change, he promised to deliver the rest of his £43bn package of tax cuts; expected to be partly paid for by a squeeze on public spending. Opposition MPs accused Mr Kwarteng of "insulting millions of people" as he attempted to dismiss the market turmoil that triggered the U-turn as a "little turbulence".

Following a mere week after the tax cut was announced in the mini-budget - and just a month into Liz Truss's premiership - the U-turn is a significant blow to their authority.

In the second course change to try to reassure markets and Tory rebels, the Chancellor is understood to be bringing forward his medium-term fiscal plan, alongside official forecasts from the Office for Budget Responsibility, to later this month. 

Mr Kwarteng had previously insisted he would wait until November 23 but told the conference he would publish details "shortly" on how he planned to bring down public debt as a percentage of GDP over the medium term.

The Chancellor said that the Tories will be "serious custodians of the public finances", despite a £65 billion of Bank of England intervention to forestall new financial turmoil and the pound having plummeted as a result of his mini-budget on September 23.

At the Conservative conference today, the party will reportedly attempt to shift the focus away from the economy.

Ms Truss admitted that it had not been an "easy" week but indicated she was sticking with the rest of the tax-cutting package.

The Prime Minister told the Express newspaper, "Express readers can rest assured: we will reward your trust. It has not been an easy week, but we have shown that we listen to people's concerns and we are determined to deliver on our core plan for economic success and security.

"Our plan for growth is essential to get the British economy moving. Growth is the only way to create jobs, boost wages and fund our vital public services like the NHS."

Writing in The Telegraph, Ms Truss said, "Abolishing the 45p top rate of tax was a tiny part of the plan and had become an unnecessary distraction.

"That is why the Chancellor and I decided to no longer proceed with it. We listened and took action."

However, in a reflection of continuing unease among Conservative MPs, former home secretary Priti Patel will reportedly accuse Ms Truss and Mr Kwarteng of "spending today with no thought of tomorrow".

"I want to see our party regain its credibility by restoring its commitment to sustainable public spending ... which is affordable today, tomorrow and for the foreseeable future," Ms Patel will tell a conference fringe event, according to reporting from The Times.

The Prime Minister and Chancellor also faced a fresh rebellion as they refused to commit to increasing benefits in line with inflation. Failing to keep pace with rising prices would leave some of the UK’s poorest households facing a real-terms cut in their incomes.

Former Cabinet minister Michael Gove told Times Radio he would need "a lot of persuading" to stop benefits from rising in line with inflation. And former work and pensions secretary Damian Green told LBC that a freeze or cut in benefits would not make it through the Commons.

Source: Wales Online

(LInk and quotes via original reporting)

The UK’s new Chancellor, Kwasi Kwarteng, has been forced to make a second humiliating U-turn after dramatic markets reactions to his package of tax cuts, Wales Online reports.

Less than 24 hours after reversing his plan to scrap the 45p top rate of income tax, the Chancellor has announced that the date for his new fiscal plan is being brought forward.

Mr Kwarteng is now expected to publish details on how the cuts will be paid for later this month despite previously insisting he would wait until November 23. He reportedly says he wants to "move forward" with no "distractions".

The Chancellor acknowledged the "turbulence" caused by his mini-budget in a speech to the Conservative Party conference in Birmingham. The pound's value plummeted, borrowing costs soared and the Bank of England was forced to bail out pension funds.

Despite the change, he promised to deliver the rest of his £43bn package of tax cuts; expected to be partly paid for by a squeeze on public spending. Opposition MPs accused Mr Kwarteng of "insulting millions of people" as he attempted to dismiss the market turmoil that triggered the U-turn as a "little turbulence".

Following a mere week after the tax cut was announced in the mini-budget - and just a month into Liz Truss's premiership - the U-turn is a significant blow to their authority.

In the second course change to try to reassure markets and Tory rebels, the Chancellor is understood to be bringing forward his medium-term fiscal plan, alongside official forecasts from the Office for Budget Responsibility, to later this month. 

Mr Kwarteng had previously insisted he would wait until November 23 but told the conference he would publish details "shortly" on how he planned to bring down public debt as a percentage of GDP over the medium term.

The Chancellor said that the Tories will be "serious custodians of the public finances", despite a £65 billion of Bank of England intervention to forestall new financial turmoil and the pound having plummeted as a result of his mini-budget on September 23.

At the Conservative conference today, the party will reportedly attempt to shift the focus away from the economy.

Ms Truss admitted that it had not been an "easy" week but indicated she was sticking with the rest of the tax-cutting package.

The Prime Minister told the Express newspaper, "Express readers can rest assured: we will reward your trust. It has not been an easy week, but we have shown that we listen to people's concerns and we are determined to deliver on our core plan for economic success and security.

"Our plan for growth is essential to get the British economy moving. Growth is the only way to create jobs, boost wages and fund our vital public services like the NHS."

Writing in The Telegraph, Ms Truss said, "Abolishing the 45p top rate of tax was a tiny part of the plan and had become an unnecessary distraction.

"That is why the Chancellor and I decided to no longer proceed with it. We listened and took action."

However, in a reflection of continuing unease among Conservative MPs, former home secretary Priti Patel will reportedly accuse Ms Truss and Mr Kwarteng of "spending today with no thought of tomorrow".

"I want to see our party regain its credibility by restoring its commitment to sustainable public spending ... which is affordable today, tomorrow and for the foreseeable future," Ms Patel will tell a conference fringe event, according to reporting from The Times.

The Prime Minister and Chancellor also faced a fresh rebellion as they refused to commit to increasing benefits in line with inflation. Failing to keep pace with rising prices would leave some of the UK’s poorest households facing a real-terms cut in their incomes.

Former Cabinet minister Michael Gove told Times Radio he would need "a lot of persuading" to stop benefits from rising in line with inflation. And former work and pensions secretary Damian Green told LBC that a freeze or cut in benefits would not make it through the Commons.

Source: Wales Online

(LInk and quotes via original reporting)