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Warnings about the state of the UK’s economy held back by Kwasi Kwarteng when he was chancellor have been published.

They show the country’s financial situation had “worsened significantly” even before Liz Truss took over.

Under the Truss premiership, Mr Kwarteng refused to release advice passed to him by the Office for Budget Responsibility (OBR) before the government announced the support scheme for energy bills and, later, the mini-budget.

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The economic fallout from the spending and the lack of an official forecast spooked markets, pushing up government borrowing costs and putting certain pension funds on the brink of collapse.

Mr Kwarteng was sacked after trying to unpick his own financial plan, and was shortly followed out of the gates of Downing Street by Ms Truss.

Now, the OBR has released documents it prepared for Mr Kwarteng on his first day in office, following an order from the Information Commissioners’ Office.

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While they are not fully comprehensive forecasts, they highlight the struggling state of the UK economy in September 2022 following COVID, the invasion of Ukraine and rising energy costs.

The OBR explained the UK was on the precipice of a year-long recession, and government borrowing was set to rise by £21.8bn more each year until 2026/27, when compared to data prepared in the spring.

The report stated the “economic outlook has worsened significantly” since their last full forecast in March.

It estimated borrowing for the 2022/23 period was already set to be £144.1bn – “significantly higher”, again, than the March prediction. This is a rise of 6.1% of GDP, and compares to the March prediction of £127.8bn.

Much of this was due to interest payments on debt the government held going up.

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This rise wiped out much of the “headroom” – the extra money the government has to spend – from £27.8bn to £8.8bn.

Three days after Mr Kwarteng was sent the information by the OBR, Ms Truss announced the Energy Price Guarantee to help people with fuel bills, which was expected to cost tens of billions of pounds.

After the mourning period for Elizabeth II finished Mr Kwarteng revealed the administration’s totemic mini-budget, which increased borrowing even further to fund tax cuts which it was hoped would increase growth.

Markets reacted negatively to the plans – some blaming the lack of an official OBR forecast to go alongside Mr Kwarteng’s announcements.

This led to the collapse of the Truss administration and Rishi Sunak becoming prime minister.

A Treasury spokesperson said: “The document published reflects the OBR’s preparatory work sent to the then chancellor on his first day in office. The draft forecast did not include any policies ultimately announced in the Growth Plan.”

James Murray, Labour’s shadow secretary to the Treasury, said: “The fuse for the Tory mortgage bombshell was lit last autumn with their wild, unfunded tax cuts. Alongside that, the Conservatives’ irresponsible disrespect for independent institutions crashed the pound and sent interest rates soaring.

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“The reckless incompetence from the disastrous mini-Budget has left working people paying the price for Tory failure – with mortgage bills set to rise by £220 a month on average for those re-mortgaging.

“Labour’s economic plans will always be fully costed, fully funded, and built on the rock of fiscal responsibility. We recognise the important role played by the Office for Budget Responsibility and we will never disregard our independent economic institutions.”

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Sir Keir Starmer set for Donald Trump trade talks as PM walks diplomatic line between EU allies and US on Gaza

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Sir Keir Starmer set for Donald Trump trade talks as PM walks diplomatic line between EU allies and US on Gaza

Gaza and transatlantic trade are set to dominate talks between Donald Trump and Sir Keir Starmer when the pair meet in Scotland on Monday.

Downing Street said the prime minister would discuss “what more can be done to secure the ceasefire [in the Middle East] urgently”, during the meeting at the president’s Turnberry golf course in Ayrshire.

Talks in Qatar over a ceasefire ended on Thursday after the US and Israel withdrew their negotiating teams.

Mr Trump blamed Hamas for the collapse of negotiations as he left the US for Scotland, saying the militant group “didn’t want to make a deal… they want to die”.

Sir Keir has tried to forge close personal ties with the president, frequently praising his actions on the world stage despite clear foreign policy differences between the US and UK.

The approach seemed to pay off in May when Mr Trump announced the agreement of a trade deal with the UK that would see several tariffs lowered.

The two leaders are expected to discuss this agreement when they meet, with the prime minister likely to press the president for a lowering of outstanding tariffs on imports such as steel.

Prior to the visit, the White House said the talks would allow them to “refine the historic US-UK trade deal”.

Extracting promises from the president on the Middle East may be harder though.

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Should aid be dropped into Gaza?

Despite some reports that Mr Trump is growing frustrated with Israel, there is a clear difference in tone between the US and its Western allies.

As he did over the Ukraine war, Sir Keir will have to walk a diplomatic line between the UK’s European allies and the White House.

On Thursday, French President Emmanuel Macron announced his country would formally recognise a Palestinian state in September, the first member of the G7 to do so.

That move was dismissed by Mr Trump, who said it “doesn’t carry any weight”.

Read more from Sky News:
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Trump: ‘It doesn’t matter what Macron says’

The UK, French and German leaders spoke over the weekend and agreed to work together on the “next phase” in Gaza that would see transitional governance and security arrangements put in place, alongside the large-scale delivery of aid.

Under pressure from members of his own party and cabinet to follow France and signal formal recognition of Palestine, Sir Keir has gradually become more critical of Israel in recent months.

On Friday, the prime minister said “the starvation and denial of humanitarian aid to the Palestinian people, the increasing violence from extremist settler groups, and Israel’s disproportionate military escalation in Gaza are all indefensible”.

Government sources say UK recognition is a matter of “when, not if”, however, it’s thought Downing Street wants to ensure any announcement is made at a time when it can have the greatest diplomatic impact.

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Baby Zainab starved to death in Gaza

Cabinet ministers will be convened in the coming days, during the summer recess, to discuss the situation in Gaza.

The UK has also been working with Jordan to air drop supplies, after Israel said it would allow foreign countries to provide aid to the territory.

President Trump’s trip to Scotland comes ahead of his second state visit to the UK in September.

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Downing Street says Ukraine will also likely be discussed in the meeting with both men reflecting on what can be done to force Russia back to the negotiating table.

After the meeting at Turnberry, the prime minister will travel with the president to Aberdeen for a private engagement.

Mr Trump is also expected to meet Scottish First Minister John Swinney while in the country.

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Crypto isn’t crashing the American dream; it’s renovating it

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Crypto isn’t crashing the American dream; it’s renovating it

Crypto isn’t crashing the American dream; it’s renovating it

The US housing regulator’s decision to recognize crypto assets in mortgage applications marks a historic shift from exclusion to integration, opening new pathways to homeownership.

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Govt vows to protect ‘pavement pints’ and make it easier for pubs to extend their opening hours

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Govt vows to protect 'pavement pints' and make it easier for pubs to extend their opening hours

“A wave of new cafes, bars, music venues and outdoor dining” could come to the UK – as the government unveils plans to overhaul planning rules and “breathe new life into the high street”.

Under the proposals, ministers also want to reform licensing rules to make it easier for disused shops to be converted into hospitality venues.

In a statement, Chancellor Rachel Reeves said she planned to scrap “clunky, outdated rules… to protect pavement pints, al fresco dining and street parties”.

The reforms also aim to prevent existing pubs, clubs, and music venues from suffering noise complaints when new properties hit the market.

Developers who decide to build near those sites will be required to soundproof their buildings.

Customers drink in an outdoor seating area of a pub in London during pandemic in December 2021
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As part of dedicated “hospitality zones”, permission for al fresco dining, street parties and extended opening hours will be fast-tracked.

The government says the reforms aim to modernise outdated planning and licensing rules as part of its Plan for Change, to help small businesses and improve local communities.

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The rough plans will be subject to a “call for evidence” which could further shape policy.

Business Secretary Jonathan Reynolds said the proposals will “put the buzz back into our town centres”.

“Red tape has stood in the way of people’s business ideas for too long. Today we’re slashing those barriers to giving small business owners the freedom to flourish,” he said.

The hospitality industry has broadly welcomed the changes but argued tax reform was also essential.

Kate Nicholls, chairwoman of UKHospitality, described the proposals as “positive and encouraging”.

However, she added: “They can’t on their own offset the immediate and mounting cost pressures facing hospitality businesses which threaten to tax out of existence the businesses and jobs that today’s announcement seeks to support.”

Read more from Sky News:
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Pubs forced to adapt to survive

While supporting the reforms, Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA), had a similar message.

“These changes must go hand in hand with meaningful business rates reform, mitigating staggering employment costs, and a cut in beer duty so that pubs can thrive at the heart of the community,” she said.

In July, BBPA estimated that 378 pubs will shut this year across England, Wales and Scotland, compared with 350 closures in 2024, which it said would amount to more than 5,600 direct job losses.

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Pubs closing at a rate of one a day

Bar chain Brewdog announced this week that it would close 10 sites, partly blaming “rising costs, increased regulation, and economic pressures”.

Andrew Griffith MP, shadow business secretary, said: “Though any cutting of red tape for hospitality businesses is welcome, this is pure hypocrisy and inconsistency from Labour.”

He said the government was “crippling the hospitality industry by doubling business rates, imposing a jobs tax and a full-on strangulation of employment red tape”.

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