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World leaders have arrived in Cornwall for this weekend’s G7 summit, as Boris Johnson looks to strike deals on COVID vaccines, girls’ education and the environment.

In one of the most high-profile moments of his premiership so far, the prime minister will chair meetings of the world’s leading democracies at Carbis Bay.

Follow live updates from the G7 summit in Cornwall

Members of the media take pictures of climate change activists wearing masks representing world leaders during a protest in St. Ives, on the sidelines of G7 summit in Cornwall, Britain, June 11, 2021. REUTERS/Dylan Martinez
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Climate change activists wear masks representing world leaders during a protest in St. Ives, on the sidelines of the G7 summit

Mr Johnson has been joined at the South West resort by US President Joe Biden, Canada’s Justin Trudeau, Japan‘s Yoshihide Suga, Germany’s Angela Merkel, France’s Emmanuel Macron, Italy‘s Mario Draghi, and EU presidents Ursula von der Leyen and Charles Michel.

Although world leaders will enjoy some downtime during their stay – including a beach BBQ and toasted marshmallows over fire pits – their first in-person summit for almost two years will see them focus on the global recovery from the coronavirus pandemic.

As well as hoping to sidestep any fresh turmoil over lingering Brexit disputes, Mr Johnson wants this weekend to see G7 nations commit to providing one billion doses of COVID vaccines to developing countries as part of a bid to vaccinate the entire world by the end of next year.

The UK has committed to providing at least 100 million doses, while Mr Biden has said the US will purchase 500 million doses of the Pfizer jab to donate to poorer countries.

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In an article setting out his agenda for the summit, the prime minister will also set out his ambition for a new global pandemic surveillance network, as well as an effort to accelerate the development of vaccines, treatments and tests for any new virus from 300 to 100 days.

Australia’s Scott Morrison, South Africa’s Cyril Ramaphosa and South Korea‘s Moon Jae-in will join the G7 talks on future pandemic preparedness as summit guests on Saturday, while India’s Narendra Modi will join discussions via video link.

Mr Johnson also wants the weekend to see G7 leaders commit to tackling the “moral outrage” of millions of girls around the world being denied an education.

“Our shared goal must be to get another 40 million girls into school by 2025,” he said.

“I will ask the G7 and our guests to contribute more towards the Global Partnership for Education’s target of raising $5bn (£3.5bn) for schools in the developing world.”

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What is the G7?

One subject on which Mr Johnson will be hoping to avoid headlines during the G7 summit is the continuing row over post-Brexit arrangements for Northern Ireland.

The prime minister is set to hold talks with the EU‘s Ms von der Leyen and Mr Michel on the sidelines of the summit, with the UK and the bloc remaining at a stand-off over the implementation of the Northern Ireland Protocol.

Ahead of the official start of the G7 summit, French President Emmanuel Macron pointedly shared an image of himself, Mrs Merkel, Mr Draghi and the two EU presidents sat at a table together.

“As always, the same union, the same determination to act, the same enthusiasm! The G7 can begin,” Mr Macron posted on Twitter.

On Thursday, Mr Johnson said he and Mr Biden were in “complete harmony” over Northern Ireland, despite earlier reports the US had lodged a formal diplomatic protest with the UK over the dispute.

Ahead of the UK hosting the COP26 climate change summit later this year, environmental issues will also be a large part of discussions over the weekend.

Prince Charles is hosting a reception on Friday for the G7 leaders and CEOs of some of the world’s largest companies to discuss how the private sector can work with governments to tackle the climate emergency.

And Sunday’s final talks will see leaders addressed via a pre-recorded video from Sir David Attenborough.

The prime minister wants G7 nations to promise to halve their carbon emissions by 2030, in order to limit the rise in global temperatures to 1.5 degrees.

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Liz Truss admits ‘disruption’ to UK economy but stands by forecast-free mini-budget

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Liz Truss admits 'disruption' to UK economy but stands by forecast-free mini-budget

Liz Truss has for the first time acknowledged that “there has been disruption” to the UK economy following last week’s mini budget.

Since the chancellor’s announcement of £45bn in tax cuts the value of the pound has plummeted, nearly half of mortgages have been pulled and the Bank of England launched a £65bn bail-out to save pension funds from collapse.

Asked on Friday whether she accepted this is largely a crisis of her government’s own making, the prime minister said: “It was very, very important that we took urgent steps to deal with the costs that families are facing this winter, putting in place the energy price guarantee for which we’ve had to borrow to cover the cost… but also making sure that we are not raising taxes at a time where there are global economic forces caused by the war in Ukraine that we need to deal with.

“I recognise there has been disruption. But it was really, really important that we were able to get help to families as soon as possible – that help is coming this weekend.

“Because this is going to be a difficult winter and I’m determined to do all I can to help families and help the economy at this time.”

The government’s energy price guarantee comes into force on Saturday.

It means the average household shouldn’t have to pay more than £2,500 a year on their energy bills.

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Ms Truss defended the decision to present last week’s mini-budget without an accompanying forecast from the Office for Budget Responsibility (OBR) due to the need to respond rapidly to rising energy prices, amid concerns that average annual household bills could soon reach £6,000.

The lack of such a forecast is blamed by many – including Mel Stride MP, the Conservative chair of the treasury select committee – of contributing to the week’s turmoil on the markets.

The OBR said a forecast had been offered to Chancellor Kwasi Kwarteng but was not commissioned.

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Truss: Right to ‘take decisive action’

On Friday morning, the prime minister and chancellor met the OBR’s budget responsibility committee and afterwards issued a statement saying they “made it clear they value its scrutiny”.

Read more:
Will the housing market crash? Is my pension safe? Your questions answered
Storm clouds are thickening thanks to Truss and Kwarteng

But Ms Truss did not accept that failing to commission a forecast last week had been a mistake.

“It was important we acted quickly, in that timescale there couldn’t be a full OBR forecast. But we are committed to the OBR forecast.

“We are working together with the OBR. There will be an event on 23 November where the policies are fully analysed by the OBR, but it was a real priority to me to make sure we’re working to help struggling families.”

On Thursday, the chancellor committed to maintaining the triple lock on state pensions, which means they would rise in line with inflation (the triple lock means following whichever is higher consumer price inflation, average wage growth or 2.5%).

But the prime minister declined to offer a guarantee that benefits would also rise in line with inflation, despite a pledge from Boris Johnson’s government to do so.

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‘People have no faith in govt’

Ms Truss said the issue is “something that the work and pensions secretary is looking at, and she will make an announcement in due course, as is the normal practice for the autumn”.

But the prime minister argued the reversal of the National Insurance hike and support for businesses’ energy bills will help families.

“I had real fears that businesses could go out of business this winter because they were facing unaffordable energy bills,” she added.

“We put in place a business scheme, we put in place support for households across the country. That has cost us money, but it was important we acted quickly.”

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With the latest polls putting Labour more than 30 points ahead of the Conservatives, many backbenchers are concerned about the prospect of losing their seats at the next election.

Senior MP Charles Walker said on Friday the conversation is no longer about winning, but how much the party loses by.

But the prime minister declined to comment on whether her party is heading towards electoral defeat, responding that “100% of her focus” is on supporting “the British public and British businesses through this difficult winter”.

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Fiscal watchdog to give initial forecast on mini-budget after meeting with PM and chancellor

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Fiscal watchdog to give initial forecast on mini-budget after meeting with PM and chancellor

Liz Truss and Kwasi Kwarteng have met the head of the UK’s independent fiscal watchdog amid the fallout from the government’s mini-budget.

The government confirmed that publication of the forecast would not be brought forward from 23 November – more than seven weeks away.

The Office for Budget Responsibility (OBR) confirmed it would deliver an initial forecast to the chancellor next week, which “will, as always, be based on our independent judgment about economic and fiscal prospects and the impact of the government’s policies”.

The talks with the OBR came at the end of a week of economic turmoil in which the pound plunged, nearly half of mortgages were pulled and pension funds were saved from collapse.

The government said the meeting was “usual”, but it is highly uncommon for a prime minister to attend an OBR meeting, which is normally held between the watchdog and the chancellor to discuss upcoming economic forecasts.

A statement from Downing Street said: “This morning the prime minister Liz Truss and Chancellor Kwasi Kwarteng met with the OBR’s Budget Responsibility Committee, including the Chair Richard Hughes, at Number 10 Downing Street.

“They discussed the process for the upcoming economic and fiscal forecast, which will be published on 23 November, and the economic and fiscal outlook.”

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Mini-budget initial forecast next week

Mr Hughes confirmed the watchdog’s timetable after the meeting.

Speaking outside Downing Street, Mr Hughes said: “We are going to be providing the chancellor with an update next Friday, and we will set up a timetable for our forecast process next week.”

An OBR statement added: “We will deliver the first iteration of that forecast to the Chancellor on Friday 7 October and will set out the full timetable up to 23 November next week.”

House prices warning as growth slows to single digits – economy live updates

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‘It’s unusual for PM to meet OBR’

The meeting came after criticism that an OBR forecast was not published alongside the chancellor’s mini-budget last week.

The OBR has a statutory requirement to provide two forecasts a year, and said it offered Mr Kwarteng one on his first day as chancellor.

The chancellor did not commission one, and the lack of analysis on the measures outlined in his financial statement is thought to have contributed to the turmoil in the markets in the past week.

The OBR was set up by the government in 2010 to provide independent analyses of the UK’s public finances.

Andrew Griffith, the financial secretary to the Treasury, told Sky News on Friday morning that it was a “very good idea” for Ms Truss and Mr Kwarteng to meet with the OBR.

Sir Charles Bean, a former deputy governor of the Bank of England, said such a summit is “quite unusual”.

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Sir Charles said that meetings with the chancellor and OBR officials are not uncommon, but the prime minister less frequently talks with the watchdog.

He also said the meeting was like “closing the stable door after the horse had bolted”, as the OBR forecast needed to be released with the mini-budget to reassure markets.

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£1bn Serco pension scheme seeks loan from outsourcer amid markets turmoil

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  £1bn Serco pension scheme seeks loan from outsourcer amid markets turmoil

The pension schemes of Serco, the government contractor, have approached their sponsor to seek financial support amid a funding crunch triggered by this week’s wild gyrations in financial markets. 

Sky News has learnt that the outsourcing giant’s pension trustees contacted the company in recent days about establishing a new credit facility in the event of a continued deluge of collateral calls.

The request is thought to be highly unusual and highlights the turmoil caused even in well-funded and well-run corporate pension schemes by the sudden surge in gilt yields that followed last Friday’s fiscal statement by the chancellor, Kwasi Kwarteng.

The Bank of England intervened in financial markets on Wednesday by promising to buy tens of billions of pounds in government bonds during the next fortnight in an attempt to stabilise the market.

That followed a slump in sterling’s value against the dollar to its lowest-ever level and deep anxiety about investors’ appetite to buy UK government bonds.

Ministers have sought to blame the turmoil on global market forces, but Mr Kwarteng’s £45bn of unfunded tax cuts, announced in last week’s ‘mini-Budget’, have been held responsible by many analysts for sparking the most dangerous financial markets rout since the 2008 banking crisis.

A person close to Serco pointed out that its retirement schemes boasted a surplus, before tax, of £105.3m at its latest half-year results.

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The source added that the standby loan request from its pension trustees was simply to provide liquidity to help it meet demands for additional collateral.

Corporate pension fund trustees were faced with no choice but to sell billions of pounds of equities and bonds this week to meet margin calls – forcing them to put up extra collateral – as gilt yields surged and upset delicately balanced hedging strategies.

The turmoil has drawn closer attention to so-called Liability-Driven Investing, which many pension schemes use financial instruments such as derivatives to help them match their long-term assets and liabilities.

The precise number of Serco’s pension scheme members was unclear on Friday.

Members’ retirement funds are not at risk as a consequence of the move to seek financial support from the schemes’ sponsor.

According to its most recent results, Serco makes annual deficit recovery payments of £6.6m, a figure that is fixed until 2030.

Serco is one of Britain’s biggest outsourcing groups, handling contracts for a multitude of government departments.

Earlier this month, the company announced that Rupert Soames, its long-serving chief executive and grandson of Sir Winston Churchill, would retire.

He is regarded as one of Britain’s most capable chief executives, having transformed erco’s fortunes since taking over in 2014.

Serco and its pension trustees both declined to comment.

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