The government’s mini-budget has left it facing such a large black hole in the public finances that the most credible way of filling it is severe spending cuts similar to the kinds imposed during the austerity years a decade ago, according to an authoritative new report.
The “Green Budget”, from the Institute for Fiscal Studies (IFS), together with investment bank Citi, warns that the chancellor would have to cut spending or raise taxes by £62bn if he is to stabilise or reduce the national debt, as he has repeatedly promised in recent weeks.
That shortfall is a direct consequence of measures announced since the Truss government took office, including its reversal of various tax increases such as corporation tax and National Insurance, and its Energy Price Guarantee.
There is a chance that hole is filled by economic growth, but the IFS said such an outcome would depend on luck more than judgement.
It said the Office for Budget Responsibility (OBR), the government’s in-house forecaster, was unlikely to assume at the end of the month that the measures in Kwasi Kwarteng’s mini-budget would boost the country’s long-term growth prospects.
The IFS said that even raising working age benefits in line with earnings rather than inflation – one of the big and controversial money-saving measures it is considering – would only save a fraction of the money necessary – about £13bn a year.
It added that Mr Kwarteng would instead have to carry out more dramatic cuts, potentially reducing government investment and slashing public spending on departments already squeezed to the bone during the austerity years.
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The IFS Green Budget found that the amount the government is set to pay on debt interest is set to rise in the next couple of years to the highest level, as a percentage of national income, since at least the late 1940s.
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How might the government balance the books?
This increase in debt interest is one element of a “premium” the government is having to pay at the moment because of fears among investors that it has surrendered some of its credibility.
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This “credibility premium” means the cost of borrowing is currently higher in the UK than might have been expected, given the increase in borrowing accounted for by the mini-budget.
Moreover, Citi said that the higher interest rates faced by consumers in their mortgages would also dampen economic growth in the coming years.
The IFS said the “credibility premium” for the public finances was around £10bn; Citi said the premium for economic growth was 0.1 or 0.2 percentage points.
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Labour: ‘Reverse mini-budget’
IFS director, Paul Johnson, said that with so much geopolitical instability there were large uncertainties about the outlook in the coming year, but that Mr Kwarteng was left facing large fiscal challenges.
“The specifics of the UK government’s fiscal strategy are under more scrutiny by financial markets than at any point in the recent past. The chancellor should not rely on over-optimistic growth forecasts or promises of unspecified spending cuts. To do so would risk his plans lacking the credibility which recent events have shown to be so important.
“All that said, we would have sympathy with the chancellor if he decided that the uncertainties of the present moment are too great to be promising specific future action around public spending.
But the same would apply to his recent package of tax cuts. He should not apply that argument asymmetrically.”
Benjamin Nabarro, chief UK economist at Citigroup, added: “With monetary and fiscal policy now working in opposite directions, we think the broader risks around UK monetary-financial stability are growing.
“In the years ahead, ‘supply shocks’ such as those seen in recent months seem likely to grow more frequent. That may require profound changes in the manner macroeconomic policy is conducted if we are to avoid another decade of stagnation.
“The UK can ill afford further policy mistakes,” he concluded.
In a workshop in the far corner of the Styal prison estate, glass, plastic and metal are being smashed to the beat of pumping music.
Women at workstations are dismantling electronics with the energy of gym enthusiasts.
TVs and laptops, discarded at local recycling centres across England, have ended up here, on the edge of Wilmslow, Cheshire.
But amid the whiz of drills, the crunch of screens being separated from their plastic casings and the clatter of electronic boards ripped out and chucked in big bins, something else is being recycled – women’s lives.
“You get a lot of frustration out, because obviously a lot of girls have got a lot of anger, you know,” says Joanne*, who is serving time for drug offences.
She has joined this activity not for the £10 per 70 TVs she breaks apart, but because the programme – called Recycling Lives – could give her the skills and the support to keep her out of jail in the future.
Only 12% of women are employed six months after leaving prison, compared to 25% of men. In the general population employment levels between men and women are 78% to 72%.
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Ex-prisoners with a job are far less likely to re-offend. So, women prisoners are at a disadvantage. Often a man is connected to the crime they committed.
“For 90% of the women in prison, there’s always a male involved in why they’ve committed crime, it is the case with me as well,” says Joanne, who tells me she was pressured into dealing drugs by her partner.
Official Ministry of Justice statistics say that at least 60% of women in prison are victims of domestic violence and most will have experienced some form of abuse as a child.
Many, too, are mothers and they feel the guilt of separation every day. Joanne says of her son: “It’s my sister picking him up from school, not me.
“It’s my sister there on Christmas day, not me. Birthdays, all the special occasions. It’s heart-breaking.
“People think prison is easy. You are ripped away from your family and your children. It’s not easy.”
As if in illustration, the glass cracks on an iPad, as she peels it away with her screwdriver.
Official figures say there are around 3,500 women in prison and it is estimated that about half are mothers.
‘I’m trying to give them a future’
The workshop manager Yvonne Grime knows this all too well. A former serial offender herself, she’s the first former inmate at Styal to now hold a set of keys to the prison.
“The biggest thing for me [as a prisoner] was leaving my children,” she says, “and I still carry that guilt round, but I have come through it.”
Part of her redemption is to help the women in her workshop. The Recycling Lives programme transformed her life, and she wants to give back.
She says: “I’m trying to give them a future. I’m trying to give you some hope that they can that they can change.
“Get the children back, find a job, find a home. There is light at the end of the tunnel.”
Her work is part manager and part mentor. “When I first started, I thought I’m just going to come in and run this workshop,” she said.
“I didn’t realise I had to be their mum, their dad, their brother, their sister, the doctor, the nurse, the everything that comes with it.
“If I had a salary for every one of those professions, I’d be absolutely minted.”
Styal isn’t what you expect a prison to look like.
Inside the high fences and barbed wire are sixteen austere red-brick Victorian houses.
Once an orphanage, they’re now the prison’s accommodation blocks.
Ted the prison cat, wanders from block to block, and has already served several of his nine lives in the compound.
Along with recycling TV sets, women can learn to guide and drive forklift trucks.
They are quick with their tools, spinning through one appliance after another with remarkable and methodical destructive pace.
But the real advantage of the programme is that it continues on the outside. Only 6% of people who go through Recycling Lives go on to commit further crime. The general reoffending rate is 25%.
In a warehouse in Preston, former inmates are involved in recycling food from supermarkets and farms, then sent to foodbanks.
Here we meet Naomi Winter, who – three years since being released from jail – is now a manager at the food distribution depot.
The hardest thing about prison for her too was being separated from a child.
“I was put in prison when my baby is only three months old,” she said.
“So, it was like losing an arm, like losing a piece of my DNA.
“I still woke up for night feeds in the night and stuff like that.”
She says there wasn’t the mental health provision inside of prison to help her deal with post-natal depression, and she spent way too much time alone with her thoughts.
She was in and out of prison for drug offences and violence eight times by the age of 30 and first jailed aged 15, for breaching an anti-social behaviour order (ASBO).
She feels even short prison sentences can ruin lives, and says: “You take women who’s robbed a block of cheese to feed the child.
“They put them in prison for 28 days. They take the home, take the kids, they lose the family, and they get out with nothing. You just create a criminal right there.
“You’ve just created a woman who’s got nothing to lose. You’re also releasing them with a sleeping bag in a tent and telling them to go and sleep in the woods.”
Alternatives to custody
The government recognises that prison isn’t working for many of the women who end up there.
It’s why, with women being mostly non-violent offenders and serving short sentences, the government is setting up a Women’s Justice Board to look at reducing the number who go into prison with alternatives such as community sentences and intervention projects tackling the root causes of re-offending.
The Lord Chancellor and Justice Secretary, Shabana Mahmood, told Sky News: “For many women, prison isn’t working. Most women in prisons are victims themselves. Over half are mothers, with a prison sentence separating parent and child.
“That’s why I am establishing a new Women’s Justice Board, tasked with reducing the number of women in prison by exploring alternatives to custody for female offenders.”
Chief Executive of Recycling Lives, Alasdair Jackson says: “There are certain things we all need as human beings: One is a place to live, one is a job to be able to pay for that place to live and then a support network.
“But there are a lot more factors that women have to contend with; there’s children, there is maybe domestic abuse, there’s everything that goes on around that, but when you give people a chance, when you give people the skills that they need, it is life-changing.
“And when you change a woman’s life, you are often changing the family’s life and the children’s life.”
Prison is supposed to be part punishment, part repair job. But there are limited programmes like Recycling Lives, and for many women entering jail currently, the only recycling is back into criminality.
The world’s oldest man has died at the age of 112, the Guinness World Records has announced.
John Tinniswood was born in Liverpool on 26 August 1912, the year the Titanic sank. He was a lifelong Liverpool FC fan, born just 20 years after the club was founded.
He died on Monday at a care home in Southport, Guinness World Records said.
In a statement, his family said: “His last day was surrounded by music and love.
“John always liked to say thank you. So on his behalf, thanks to all those who cared for him over the years, including his carers at the Hollies Care Home, his GPs, district nurses, occupational therapist and other NHS staff.”
In April 2024, aged 111, he became the world’s oldest living man, following the death of 114-year-old Juan Vicente Perez from Venezuela.
Mr Tinniswood’s key advice for staying healthy was to practice moderation. “If you drink too much or you eat too much or you walk too much; if you do too much of anything, you’re going to suffer eventually.”
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But when asked the secret to his longevity after turning 112 in August, Mr Tinniswood put it all down to “just luck”.
“I can’t think of any special secrets I have,” he said. “I was quite active as a youngster, I did a lot of walking.
“Whether that had something to do with it, I don’t know. But to me, I’m no different [to anyone]. No different at all.
“I just take it in my stride like anything else, why I’ve lived that long I have no idea at all.”
Apart from a portion of battered fish and chips every Friday, Mr Tinniswood did not follow any particular diet, and said earlier this year he felt “no different” turning 112.
“I don’t feel that age, I don’t get excited over it. That’s probably why I’ve reached it.
“I just take it in my stride like anything else, why I’ve lived that long I have no idea at all.”
He lived through both world wars and was a Second World War veteran – having worked in an administrative role for the Army Pay Corps.
In addition to accounts and auditing, his work involved logistical tasks such as locating stranded soldiers and organising food supplies. He went on to work as an accountant for Shell and BP before retiring in 1972.
He met his wife, Blodwen, at a dance in Liverpool. They were together for 44 years before Blodwen died in 1986.
Mr Tinniswood is survived by his daughter Susan, four grandchildren and three great-grandchildren, and lived to be the fourth-oldest British man in recorded history.
His family added: “John had many fine qualities. He was intelligent, decisive, brave, calm in any crisis, talented at maths and a great conversationalist.
“John moved to the Hollies rest home just before his 100th birthday and his kindness and enthusiasm for life were an inspiration to the care home staff and his fellow residents.”
The oldest ever man was Jiroemon Kimura from Japan, who lived to the age of 116 years 54 days and died in 2013.
The world’s oldest living woman, and oldest living person, is Japan’s 116-year-old Tomiko Itooka.