Sir Keir Starmer has mocked Liz Truss for ducking an urgent question on the economy in the Commons, saying “the lady is not for turning up”.
Penny Mordaunt answered the question on the prime minister’s behalf, and the Labour leader thanked her, saying: “I guess under this Tory government, everybody gets to be prime minister for 15 minutes.”
He continued: “Mr Speaker, the country is in an economic crisis made in Downing Street because they’ve lost all credibility.
“Government borrowing costs have soared, mortgage rates have ballooned. Markets need reassuring and there is long-term damage that can’t be undone.”
He added: “Once you’ve crashed the car 100 miles an hour, you’ve damaged it for good and you’re going to be paying much more on your insurance for years to come. And it’s working people who will pay.”
Sir Keir accused the prime minister of “hiding away” and said she was “scared of her own shadow”.
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Other MPs also questioned the whereabouts of the prime minister, with Labour’s Stella Creasy asking if she was “cowering under her desk and asking for it all to go away”.
Ms Mordaunt, the Commons leader, said she was deputising for Ms Truss because the prime minister “is detained on urgent business”, adding: “I can assure the House that, with regret, she is not here for a very good reason.”
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After ducking the showdown with the Labour leader, Ms Truss entered the chamber for a statement from Jeremy Hunt, the new chancellor.
Image: Ms Truss turned up to parliament for Jeremy Hunt’s statement
In an emergency statement designed to calm the markets on Monday morning, Mr Hunt announced the support for household energy bills would be scaled back and “almost all” the tax cuts promised by his predecessor, Kwasi Kwarteng, would be reversed.
Sir Keir said the prime minister has no mandate for the changes, saying instead of leadership there is a “vacuum”.
He told the Commons: “Now is a time for consistent messaging. But what do we get? A prime minister saying absolutely no spending reductions, a chancellor saying there will be cuts. A prime minister saying she’s in charge, a chancellor who thinks he’s the CEO and she’s just the chair.”
He added: “How can Britain get the stability it needs when the prime minister has no mandate from her party and no mandate from the country?”
Ms Mordaunt defended the prime minister’s decision to sack Mr Kwarteng, a long-standing friend and ally, saying changing course was the “right thing to do” and “it took courage”.
She deferred questions on the economy to Mr Hunt, who addressed the Commons afterwards and announced the formation of a new economic advisory council to provide “more independent expert advice” to the government.
The changes Mr Hunt revealed earlier today include:
No cuts to dividend tax rates
Repeal of the easing of IR35 rules for the self-employed introduced in 2017 and 2021
No new VAT-free shopping scheme for overseas visitors to the UK
No freeze on alcohol duty rates
Basic rate of income tax to remain at 20%, not reduce to 19% from April 2023
Energy price guarantee only until April 2023.
The government had already abandoned plans to scrap the 45p rate of income tax for top earners and had backtracked on a promise not to increase corporation tax.
The changes dramatically cut the cost of Mr Kwarteng’s £45bn tax giveaway, reducing it by around £32bn.
Ms Truss is now fighting to save her premiership, with five Conservative MPs publicly calling for her to go.
Her comments followed the departure of the prince and several others from the organisation in March.
They had asked her to step down, alleging it was in the “best interest of the charity”.
Dr Chandauka told Sky News that Harry had “authorised the release of a damaging piece of news to the outside world” without informing her or Sentebale directors.
The Duke and Duchess of Sussex declined to offer any formal response.
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4:43
Why was Prince Harry accused of ‘bullying’?
‘Strong perception of ill-treatment’
The Charity Commission said it was reporting after a “damaging internal dispute emerged” and has “criticised all parties to the dispute for allowing it to play out publicly”.
That “severely impacted the charity’s reputation and risked undermining public trust in charities more generally”, it said.
But it found no evidence of “widespread or systemic bullying or harassment, including misogyny or misogynoir at the charity”.
Nevertheless, it did acknowledge the “strong perception of ill-treatment felt by a number of parties to the dispute and the impact this may have had on them personally”.
It also found no evidence of “‘over-reach’ by either the chair or the Duke of Sussex as patron”.
‘Confusion exacerbated tensions’
But it was critical of the charity’s “lack of clarity in delegations to the chair which allowed for misunderstandings to occur”.
And it has “identified a lack of clarity around role descriptions and internal policies as the primary cause for weaknesses in the charity’s management”.
That “confusion exacerbated tensions, which culminated in a dispute and multiple resignations of trustees and both founding patrons”.
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4:43
Why was Prince Harry accused of ‘bullying’?
Harry: Report falls troublingly short
A spokesperson for Prince Harry said it was “unsurprising” that the commission had announced “no findings of wrongdoing in relation to Sentebale’s co-founder and former patron, Prince Harry, Duke of Sussex”.
They added: “Despite all that, their report falls troublingly short in many regards, primarily the fact that the consequences of the current chair’s actions will not be borne by her, but by the children who rely on Sentebale’s support.”
They said the prince will “now focus on finding new ways to continue supporting the children of Lesotho and Botswana”.
Dr Chandauka said: “I appreciate the Charity Commission for its conclusions which confirm the governance concerns I raised privately in February 2025.”
But she added: “The unexpected adverse media campaign that was launched by those who resigned on 24 March 2025 has caused incalculable damage and offers a glimpse of the unacceptable behaviours displayed in private.”
All police forces investigating grooming gangs in England and Wales will be given access to new AI tools to help speed up their investigations.
The artificial intelligence tools are already thought to have saved officers in 13 forces more than £20m and 16,000 hours of investigation time.
The apps can translate large amounts of text in foreign languages from mobile phones seized by police, and analyse a mass of digital data to find patterns and relationships between suspects.
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2:00
Grooming gang inquiry: ‘Our chance for justice’
‘We must punish perpetrators’
The rollout is part of a £426,000 boost for the Tackling Organised Exploitation (TOEX) programme, which supports officers to investigate complex cases involving modern slavery, county lines and child sex abuse.
“The sexual exploitation of children by grooming gangs is one of the most horrific crimes, and we must punish perpetrators, provide justice for victims and survivors, and protect today’s children from harm,” said safeguarding minister Jess Phillips.
“Baroness Casey flagged the need to upgrade police information systems to improve investigations and safeguard children at risk. Today we are investing in these critical tools.”
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1:36
Key takeaways from the Casey review
Lack of ethnicity data ‘a major failing’
Police forces have also been instructed by the home secretary to collect ethnicity data, as recommended by Baroness Casey.
Her June report found the lack of data showing sex offenders’ ethnicity and nationality in grooming gangs was “a major failing over the last decade or more”.
She found that officials avoided the issue of ethnicity for fear of being called racist, but there were enough convictions of Asian men “to have warranted closer examination”.
The government has launched a national inquiry into the abuse and further details are expected to be announced in the coming weeks.
Rachel Reeves will need to find more than £40bn of tax rises or spending cuts in the autumn budget to meet her fiscal rules, a leading research institute has warned.
The National Institute of Economic and Social Research (NIESR) said the government would miss its rule, which stipulates that day to day spending should be covered by tax receipts, by £41.2bn in the fiscal year 2029-30.
In its latest UK economic outlook, NIESR said: “This shortfall significantly increases the pressure on the chancellor to introduce substantial tax rises in the upcoming autumn budget if she hopes to remain compliant with her fiscal rules.”
The deteriorating fiscal picture was blamed on poor economic growth, higher than expected borrowing and a reversal in welfare cuts that could have saved the government £6.25bn.
Together they have created an “impossible trilemma”, NIESR said, with the chancellor simultaneously bound to her fiscal rules, spending commitments, and manifesto pledges that oppose tax hikes.
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1:56
Could the rich be taxed to fill black hole?
Reeves told to consider replacing council tax
The institute urged the government to build a larger fiscal buffer through moderate but sustained tax rises.
“This will help allay bond market fears about fiscal sustainability, which may in turn reduce borrowing costs,” it said.
“It will also help to reduce policy uncertainty, which can hit both business and consumer confidence.”
It said that money could be raised by reforms to council tax bands or, in a more radical approach, by replacing the whole council tax system with a land value tax.
To reduce spending pressures, NIESR called for a greater focus on reducing economic inactivity, which could bring down welfare spending.
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1:40
What’s the deal with wealth taxes?
Growth to remain sluggish
The report was released against the backdrop of poor growth, with the chancellor struggling to ignite the economy after two months of declining GDP.
The institute is forecasting modest economic growth of 1.3% in 2025 and 1.2% in 2026. That means Britain will rank mid-table among the G7 group of advanced economies.
‘Things are not looking good’
However, inflation is likely to remain persistent, with the consumer price index (CPI) likely to hit 3.5% in 2025 and around 3% by mid-2026. NIESR blamed sustained wage growth and higher government spending.
It said the Bank of England would cut interest rates twice this year and again at the beginning of next year, taking the rate from 4.25% to 3.5%.
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Persistent inflation is also weighing on living standards: the poorest 10% of UK households saw their living standards fall by 1.3% in 2024-25 compared to the previous year, NIESR said. They are now 10% worse off than they were before the pandemic.
Professor Stephen Millard, deputy director for macroeconomics at NIESR, said the government faced tough choices ahead: “With growth at only 1.3% and inflation above target, things are not looking good for the chancellor, who will need to either raise taxes or reduce spending or both in the October budget.”