Jeremy Hunt snaps at Rachel Reeves over National Insurance

Rachel Reeves may have been getting attention for her accusation that the government is ‘gaslighting’ the public over the state of the economy, but this afternoon she ended up being accused of spreading fake news. The ‘gaslighting’ line came from a speech in the City of London this morning, after which Reeves then popped up at Treasury questions in the House of Commons. She asked a question that both she and Labour leader Keir Starmer have been repeating for weeks now, about the Conservatives’ ambition to abolish national insurance. Labour has badged this as a £46 billion unfunded plan, though, as ever, it is worth pointing out that this is

Treasury counts the cost of Truss’s mini-Budget

Many institutions were left counting the cost of Liz Truss and Kwasi Kwarteng’s disastrous mini-Budget. And nowhere more so, it seems, than on Horse Guards Road, where those much-loathed guardians of Treasury orthodoxy were forced to work overtime to deal with the resulting market fallout.  Staff earned an extra £89,771 for their work. Kerching! New figures, released in response to a parliamentary question by Lib Dem MP Sarah Olney, reveal that Treasury staff overtime almost doubled after September’s ‘fiscal event’. As officials battled to cope with the resulting market chaos in the weeks that followed, they clocked up more than 1,500 extra hours in October than in the same month

Does the ‘anti-growth coalition’ run the Treasury?

‘Permanent revolution’ is the on dit in Whitehall these days – and what it means is that the Truss administration U-turns so often the whole machinery of government is constantly spinning round on its axis. The latest volte-face is the decision to appoint James Bowler, a 20-year establishment veteran, as Permanent Secretary to the Treasury. The Chancellor, Kwasi Kwarteng, declared himself ‘delighted to welcome James back to the Treasury,’ which is causing a few chuckles in SW1. The joke in Westminster today is apparently that the anti-growth coalition actually runs the Treasury It’s well-known that Kwarteng’s plan was to shake up the Treasury. Bowler represents precisely the sort of orthodox

The audacity of Kwarteng’s tax cut for the rich

George Osborne dreamed about it and Rishi Sunak told friends that he’d like to do it if everything went well and he was feeling brave. But this morning Kwasi Kwarteng has gone ahead and done it.  The ‘additional rate of tax’ – set up by Gordon Brown as a trap for the Tories in 2009 – has just been abolished. Right now, those earning more than £150,000 per year will pay 48.25 per cent on every pound they earn (45 per cent income tax plus 3.25 per cent National Insurance). From April next year, it will fall to 42 per cent (40 per cent income tax plus 2 per cent NI).

Kwarteng axes top Treasury civil servant

Liz Truss’s shake-up of Whitehall continues. Her Chancellor Kwasi Kwarteng has sacked Tom Scholar as permanent secretary to the Treasury – with the Cabinet Secretary to begin the recruitment process to find his successor. Announcing the news in a government press release, Scholar made clear the decision was made by Kwarteng: ‘The Chancellor decided it was time for new leadership at the Treasury, and so I will be leaving with immediate effect’. What message does it send to the markets? There’s a risk that it suggests turbulence The new Chancellor did at least offer some parting words of praise – describing Scholar as ‘a dedicated and exceptional civil servant’ who had provided

Who is Gordon Brown to pose as the voice of fiscal sanity?

Gordon Brown is demanding Parliament be recalled for an emergency budget. By October, he says, quoting a study he commissioned from the University of Loughborough, half the population could be living in fuel poverty. ‘Not enough thinking is being done about the major social crisis,’ he told Radio Four’s The World at One on Monday. The former Chancellor and Prime Minister does, of course, have every right to make what representations he wishes to the government, and no-one can call him a hypocrite for wanting the Chancellor and MPs to sacrifice their summer holidays for an emergency budget. His first holiday as PM, in 2007, famously lasted half a day

Read: the new Chancellor’s interview with the BBC

This is an edited transcript of the interview with the new chancellor Nadhim Zahawi on the Today programme this morning. Nick Robinson: You faced a choice yesterday, and I’d like you to explain it to our listeners. Why was it in the country’s interests as against yours, for you to stay in the cabinet and not to follow Rishi Sunak and Sajid Javid? Nadhim Zahawi: Because we are facing a global battle against inflation. Inflation is raging here in the United Kingdom, in Germany, in Canada and the United States. We have war on our continent that very few people anticipated. And I think many, many people listening to this programme today are

How the Treasury maintains its power

Don’t bring a bottle. Your chances of finding a party in full swing down those chilly corridors are close to zero. At most, you might hear the sound of a distant flute playing a courante by Lully. As Sir Howard Davies puts it in this insider’s view, which manages to be both authoritative and quite cheeky: The Treasury does not cultivate a warm and cuddly working environment. You may well not know if your immediate boss has a spouse or partner, and would certainly never meet them if they exist. Social events are at a premium. Yet this notoriously ascetic culture is not in the least hierarchical. Junior principals are

Is this the end of borrow and spend?

Since the spring statement last week, Rishi Sunak has been dealing with complaints from all sides: the right have been arguing he should have been bolder with tax cuts, the left insists more support is needed to help people with the rising costs.  With the Office for Budget Responsibility projecting the biggest fall in living standards since records began, rumours of U-turns and further announcements started bubbling over the weekend. The media, the opposition, and even some Tory MPs have been asking Treasury representatives over and over again: is that all? In a keynote address hosted by the Institute of Economic Affairs this morning, chief secretary to the Treasury Simon

Inside Rishi Sunak’s address to Tory MPs

How has Rishi Sunak’s spring statement landed with Tory MPs? While there were a number of helpful questions from Tory backbenchers in the Commons’ debate this afternoon, a more accurate indicator is tonight’s meeting of the 1922’committee of Conservative backbenchers. The Chancellor addressed around 50 MPs this evening (the one-line whip meant that attendance was lower than normal) where he said his spring statement presented a ‘clear Conservative plan’ that puts the party ‘on the side of hard working British people’. He repeated his comments in the Chamber on tax – heralding his pledge to cut income tax by 2024 as the first income tax cut in 16 years. As for

Rishi Sunak’s spring statement speech in full

Mr Speaker, As I stand here, men, women and children are huddled in basements across Ukraine seeking protection. Soldiers and citizens alike have taken up arms to defend their land and families. The sorrow we feel for their suffering, and admiration for their bravery is only matched by the gratitude we feel for the security in which we live. And what underpins that security is the strength of our economy. It gives us the ability to fund the armed forces we need to maintain our liberty. The resources we need to support our allies. The power to impose sanctions which cause severe economic costs. And the flexibility to support businesses

James Forsyth

Rishi Sunak has just defined the next election

The biggest surprise of Rishi Sunak’s spring statement was the announcement that the basic rate of income tax will be cut by one penny come 2024. This is the first cut in the basic rate since the cut to 20p announced by Gordon Brown in his last Budget in 2007, which was of course partly paid for by abolishing the 10p starting rate of tax. Cynics will be quick to suggest that there is a long way to go before 2024 and so the tax cut might not happen. But this is to ignore the politics. The most likely date for the next election is May 2024. It would be bizarre,


The MPs getting mileage out of expenses

Happy spring statement day! The annual event seems to come faster every year, replete with all those funny old traditions associated with this hallowed day. There’s the time-honoured Chancellor photoshoot, in which the incumbent minister has to strike a pose which suggests both responsible fiscal probity and compassionate one-nation benevolence. There’s the Sunday media round ritual, in which stony-faced ministers refuse to say anything of interest on the grounds of market sensitivity. And then of course there are the classic pre-statement media briefings, with much froth, speculation and excitable newspaper headlines about what the Chancellor is set to announce.  This year, attention has focused on fuel duty amid the ongoing

What to expect at the spring statement

The big story of Wednesday’s spring statement by the Chancellor will be the impact of inflation – which has soared from almost zero just over a year ago to perhaps 10 per cent in coming months – on living standards and the public finances. I expect Rishi Sunak to provide limited protection from the ravages of inflation to those on low and middling incomes, probably by increasing universal credit and the threshold for paying national insurance.  But quite how far the Chancellor inflation-proofs the take home pay of low earners will be the most important question he will answer tomorrow. Inflation that makes all of us poorer will create the

Katy Balls

Rishi Sunak’s popularity test

Rishi Sunak ended 2021 as the most popular politician in the country. A YouGov poll for the final quarter of the year found that 31 per cent of all adults had a positive opinion of the Chancellor compared to 28 per cent for Nicola Sturgeon and 26 per cent for Boris Johnson. However, ending 2022 in the same situation looks rather ambitious.  As the cost of living crisis worsens, Sunak is under pressure both from the public and his own party to step in and ease the burden on households in tomorrow’s Spring Statement. A poll out today suggests he has plenty of work to do to convince voters he has the

Rishi keeps coy on this week’s mini-Budget

What support might the Chancellor dish out to help with the cost of living squeeze in the Spring Statement this week? In line with his previous media appearances, Rishi Sunak’s statements ahead of his mini-Budget this morning on the BBC didn’t give much away, as the Chancellor ‘can’t speculate’ on what’s to come in his announcements this week. But the pressure is on to address the energy and basic goods prices which have been skyrocketing since we emerged from the height of the Covid emergency: the energy price cap lifts nearly £700 this spring, and is likely to rise again in the autumn. Sunak reiterated that his job now is

Rishi Sunak’s energy bill dilemma

This morning’s revelation that the UK economy grew 0.8 per cent in January, the fastest growth since April last year, is welcome news after a Christmas plagued by Omicron – but it’s news that’s out of date, too. As Capital Economics warns: ‘This is as good as it gets for the year’. Russia’s invasion of Ukraine, the commodity price jump and the cost-of-living crisis will soon show in the figures. Today’s ONS release warns that even in January, businesses were already reporting significant rises in the cost of energy and staff wages. The week after next, Rishi Sunak will present a mini-Budget. The Chancellor faces a conundrum: how to explain the inflation and

Is Boris in denial about the looming economic crisis?

The priority for the UK and other rich democracies is to protect the people of Ukraine from the depredations of Putin’s forces. A close second should be protecting the poorest people in our countries and vital public services from the cancerous impact of soaring inflation, made much worse by the West’s economic warfare against Putin’s Russia. The most basic costs of living are soaring. And that means a devastating recession that has already begun for all those but the richest. This blow to living standards will be the worst in living memory, more pernicious than the impact of either the banking crisis or Covid. Talking to ministers and MPs, it is

The ONS’s inflation measurement change isn’t ‘new’

The way we measure inflation is changing, and there could hardly be a less crucial time for it to do so. The ONS will be updating the method for collecting individual prices from supermarkets, and will also publish new figures on inflation rates for different types of household. The anti-poverty campaigner Jack Monroe has tweeted that the ONS ‘have just announced that they are going to be changing the way they collect and report on the cost of food prices and inflation to take into consideration a wider range of income levels and household circumstances’. But Monroe, who hope that the new metrics will show that inflation is hitting poorer families harder, will