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The devolved governments of the UK want an urgent meeting with Chancellor Kwasi Kwarteng to discuss immediate action to reverse the damaging effects of the mini-budget.

In a joint letter, the finance ministers of Wales, Scotland and Northern Ireland are warning that the government’s spending plans are a “huge gamble” that will mean another decade of austerity.

It comes as one of Liz Truss‘s closest political allies doubled down on the government’s economic policy, with warnings that major cuts in public spending are to come.

Levelling Up Secretary Simon Clarke, who is among the prime minister’s inner circle, told The Times that the British people need to expect significant cuts in public spending, because for too long the West has been living in a “fool’s paradise”.

Following on from Chancellor Kwasi Kwarteng‘s tax-cutting mini-budget, he said the government needs to make sure the “extremely large” state is in “full alignment with a lower tax economy”.

It has led to fears another period of austerity is just around the corner, with the hardest hit likely to be those reliant on welfare.

In their letter to Mr Kwarteng, Welsh Finance Minister Rebecca Evans joined finance ministers from Scotland and Northern Ireland in highlighting the profound impact of “the largest set of unfunded tax cuts for the rich in over 50 years” stating it was “a huge gamble on public finances and the health of our economy”

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They warned against being condemned to another decade of austerity and expressed deep concern over reports that UK government departments would be asked to make spending cuts to balance the budget, which may have profound consequences for devolved budget settlements already eroded by inflation.

But Mr Clarke told The Times: “Western Europe is just living in a fool’s paradise whereby we can be ever less productive relative to our peers, and yet still enjoy a very large welfare state and persist in thinking that the two are somehow compatible over the medium to long term.

“They’re not. We need to address that… if we want those strong public services then we are going to have to pay for them.

“It is important that we look at a state which is extremely large, and look at how we can make sure that it is in full alignment with a lower tax economy.”

It comes on the eve of the Conservative Party conference and the chancellor defending his mini-budget by saying the government “had no other choice” than to do “something different” to spark the economy.

The mini-budget resulted in a tumultuous week which saw the pound fall to an all-time low against the dollar and the Bank of England being forced to spend billions to prevent a collapse of the pensions industry.

‘What the Thatcher government was doing in the 1980s’

Mr Clarke admitted it had been an “uncomfortable week” and defended Ms Truss, but said she would not be deflected from policies they predicted would be unpopular, and suggested her task was analogous to that faced by Margaret Thatcher in the 1980s.

“If I was to describe one word for Liz… it is purposeful,” he said. “She knew – and this was certainly something we discussed during the summer – that this would not be a comfortable process.

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

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PM acknowledges ‘some disruption’ to UK economy following mini-budget

“[She knew] particularly early on, there would be real potential unpopularity to be courted in seeking to say things and do things which weren’t going to be easy or quick wins. Frankly, she is doing what she believes is right.

“In some ways, there is an analogy with the 1980s and what the Thatcher government was seeking to do in terms of a reset moment where you fundamentally revisit how not just the previous government but multiple governments.”

‘We intend to be extremely rigorous’

Wales Secretary Sir Robert Buckland told Sky News that, while the government would work within its existing three-year spending review package, families could expect to find out what ministers are planning in the next few weeks.

Mr Buckland said he hopes the government’s upcoming announcements will be seen by the market as displaying “fiscal discipline”.

He appeared to confirm what Mr Clarke was suggesting when he said: “We intend to be extremely rigorous when it comes to bearing down on public expenditure.

“That will be developed in the weeks ahead. We’ve got a whole range of announcements coming out on not just spending, but supply-side reforms.

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Chair of OBR Richard Hughes says chancellor will be updated on Friday

“Whether it’s childcare… or… broadband connectivity, all these things add up to an overall package that is designed to, first of all, facilitate growth in the economy, but secondly to emphasise that the government is responsible.”

‘We had to do something different’

Overnight, Mr Kwarteng said the public expected public spending to be tightly controlled.

He wrote in The Daily Telegraph: “The British taxpayer expects their government to work as efficiently and effectively as possible, and we will deliver on that expectation.

“Not all the measures we announced last week will be universally popular. But we had to do something different. We had no other choice.”

The chancellor insisted he would produce a “credible plan” to get public finances on track with a “commitment to spending discipline”.

On Friday night, Ms Truss acknowledged for the first time that “there has been disruption” to the UK economy following last week’s mini-budget.

Read more:
As Tory conference looms, the PM cuts a diminished figure after squandering much of her political capital

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‘Liz Truss is a danger to the economy’ says Starmer

Asked on Friday whether she accepted this was a crisis of the 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.”

Nick Thomas-Symonds, shadow international trade secretary, told Sky News on Saturday: “This is a Tory crisis, made in Downing Street… They’ve crashed the economy by handing out enormous unfunded tax cuts to the very wealthiest people, and it’s going to be working people across the country that pay the price for this.

“They’ve also trashed our international reputation… and… what the government has done is going to lead to economic pain for people that they have chosen… What the government needs to do is recall Parliament and withdraw this budget.”

Truss and Kwarteng met top officials from Britain’s Office for Budget Responsibility (OBR) on Friday.

Mr Kwarteng intends to publish an updated set of economic forecasts from the Office for Budget Responsibility (OBR) and a medium-term fiscal plan setting out how he plans to bring down government debt on 23 November.

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More criminal charges being considered over baby deaths at Lucy Letby hospitals

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More criminal charges being considered over baby deaths at Lucy Letby hospitals

The Crown Prosecution Service has said it is considering whether to bring further criminal charges over the deaths of babies at hospitals where Lucy Letby worked.

The CPS said it had received “a full file of evidence from Cheshire Constabulary asking us to consider further allegations in relation to deaths and non-fatal collapses of babies at the Countess of Chester Hospital and Liverpool Women’s Hospital”.

“We will now carefully consider the evidence to determine whether any further criminal charges should be brought,” it added.

“As always, we will make that decision independently, based on the evidence and in line with our legal test.”

Letby, 35, was found guilty of murdering seven children and attempting to murder seven more between June 2015 and June 2016 while working in the neonatal unit of the Countess of Chester Hospital and is currently serving 15 whole-life orders.

She is understood to have carried out two work placements at Liverpool Women’s Hospital, where she trained as a student, between October and December 2012, and January and February 2015.

On Tuesday, it was confirmed that three managers at the Countess of Chester hospital had been arrested on suspicion of gross negligence manslaughter.

Police said the suspects, who occupied senior positions at the hospital between 2015 and 2016, have all been bailed pending further inquiries.

There is also an investigation into corporate manslaughter at the hospital, which began in October 2023.

A public inquiry has also been examining the hospital’s response to concerns raised about Letby before her arrest.

In May, it was announced the inquiry’s final report into how the former nurse was able to commit her crimes will now be published early next year.

Earlier this year, Letby’s lawyers called for the suspension of the inquiry, claiming there was “overwhelming and compelling evidence” that her convictions were unsafe.

In February, an international panel of neonatologists and paediatric specialists told reporters that poor medical care and natural causes were the reasons for the collapses and deaths.

Their evidence has been passed to the Criminal Cases Review Commission (CCRC), which investigates potential miscarriages of justice, and Letby’s legal team hopes her case will be referred back to the Court of Appeal.

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‘Catastrophic failure’ led to Heathrow power outage – with chances missed to prevent it

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'Catastrophic failure' led to Heathrow power outage - with chances missed to prevent it

A power outage that shut Heathrow Airport earlier this year, causing travel chaos for more than 270,000 passengers, was caused by a “catastrophic failure” of equipment in a nearby substation, according to a new report.

Experts say the fire at the North Hyde Substation, which supplies electricity to Heathrow, started following the failure of a high-voltage electrical insulator known as a bushing, before spreading.

The failure was “most likely” caused by moisture entering the equipment, according to the report.

Two chances were also missed that could have prevented the failure, experts found, the first in 2018 when a higher-than-expected level of moisture was found in oil samples.

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Moment Heathrow substation ignites

Such a reading meant “an imminent fault and that the bushing should be replaced”, according to guidance by the National Grid Electricity Transmission.

However, the report by National Energy System Operator (NESO) said the appropriate responses to such a serious issue were “not actioned”, including in 2022 when basic maintenance was postponed.

“The issue therefore went unaddressed,” the report added.

The design and configuration of the airport’s internal power network meant the loss of just one of its three supply points would “result in the loss of power to operationally critical systems, leading to a suspension of operations for a significant period”, the report added.

Heathrow – which is Europe’s biggest airport – closed for around 16 hours on 21 March following the fire, before reopening at about 6pm.

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Heathrow bosses were ‘warned about substation’

Around 1,300 flights were cancelled and more than 270,000 air passenger journeys were disrupted.

Tens of millions of pounds were lost, thousands of passengers were stranded, and questions were raised about the resilience of the UK’s infrastructure.

More than 71,000 domestic and commercial customers lost power as a result of the fire and the resulting power outage, the report said.

NEOS chief executive, Fintan Slye, said there “wasn’t the control within their [National Grid’s] asset management systems that identified that this [elevated moisture levels] got missed.

“They identified a fault, [but] for some reason the transformer didn’t immediately get pulled out of service and get repaired.

“There was no control within the system that looked back and said ‘oh, hang on a second, you forgot to do this thing over here’.”

Sky’s science and technology editor, Tom Clarke, pointed to the age of the substation’s equipment, saying “some of these things are getting really very old now, coming to the end of their natural lives, and this is an illustration of what can happen if they are not really well maintained”.

The report also highlights a lack of joined-up thinking, he said, as “grid operators don’t know who’s critical national infrastructure on the network, and they don’t have priority”.

Responding to the report’s findings, a Heathrow spokesperson said: “A combination of outdated regulation, inadequate safety mechanisms, and National Grid’s failure to maintain its infrastructure led to this catastrophic power outage.

“We expect National Grid to be carefully considering what steps they can take to ensure this isn’t repeated.

“Our own Review, led by former Cabinet Minister Ruth Kelly, identified key areas for improvement and work is already underway to implement all 28 recommendations.”

In May, Ms Kelly’s investigation revealed that the airport’s chief executive couldn’t be contacted as the crisis unfolded because his phone was on silent.

Energy Secretary Ed Miliband, who commissioned the NESO report, called it “deeply concerning”, because “known risks were not addressed by the National Grid Electricity Transmission”.

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Mr Miliband said energy regulator Ofgem, which opened an investigation on Wednesday after the report was published, is investigating “possible licence breaches relating to the development and maintenance of its electricity system at North Hyde.

“There are wider lessons to be learned from this incident. My department, working across government, will urgently consider the findings and recommendations set out by NESO and publish a response to the report in due course.”

The Metropolitan Police previously confirmed on 25 March that officers had “found no evidence to suggest that the incident was suspicious in nature”.

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The PM faced down his party on welfare and lost. I suspect things may only get worse

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The PM faced down his party on welfare and lost. I suspect things may only get worse

So much for an end to chaos and sticking plaster politics.

Yesterday, Sir Keir Starmer abandoned his flagship welfare reforms at the eleventh hour – hectic scenes in the House of Commons that left onlookers aghast.

Facing possible defeat on his welfare bill, the PM folded in a last-minute climbdown to save his skin.

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Welfare bill passes second reading

The decision was so rushed that some government insiders didn’t even know it was coming – as the deputy PM, deployed as a negotiator, scrambled to save the bill or how much it would cost.

“Too early to answer, it’s moved at a really fast pace,” said one.

The changes were enough to whittle back the rebellion to 49 MPs as the prime minister prevailed, but this was a pyrrhic victory.

Sir Keir lost the argument with his own backbenchers over his flagship welfare reforms, as they roundly rejected his proposed cuts to disability benefits for existing claimants or future ones, without a proper review of the entire personal independence payment (PIP) system first.

PM wins key welfare vote – follow latest

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Welfare bill blows ‘black hole’ in chancellor’s accounts

That in turn has blown a hole in the public finances, as billions of planned welfare savings are shelved.

Chancellor Rachel Reeves now faces the prospect of having to find £5bn.

As for the politics, the prime minister has – to use a war analogy – spilled an awful lot of blood for little reward.

He has faced down his MPs and he has lost.

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‘Lessons to learn’, says Kendall

They will be emboldened from this and – as some of those close to him admit – will find it even harder to govern.

After the vote, in central lobby, MPs were already saying that the government should regard this as a reset moment for relations between No 10 and the party.

The prime minister always said during the election that he would put country first and party second – and yet, less than a year into office, he finds himself pinned back by his party and blocked from making what he sees are necessary reforms.

I suspect it will only get worse. When I asked two of the rebel MPs how they expected the government to cover off the losses in welfare savings, Rachael Maskell, a leading rebel, suggested the government introduce welfare taxes.

Meanwhile, Work and Pensions Select Committee chair Debbie Abrahams told me “fiscal rules are not natural laws” – suggesting the chancellor could perhaps borrow more to fund public spending.

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Should the govt slash the welfare budget?

These of course are both things that Ms Reeves has ruled out.

But the lesson MPs will take from this climbdown is that – if they push hard in enough and in big enough numbers – the government will give ground.

The fallout for now is that any serious cuts to welfare – something the PM says is absolutely necessary – are stalled for the time being, with the Stephen Timms review into PIP not reporting back until November 2026.

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Tearful MP urges govt to reconsider

Had the government done this differently and reviewed the system before trying to impose the cuts – a process only done ahead of the Spring Statement in order to help the chancellor fix her fiscal black hole – they may have had more success.

Those close to the PM say he wants to deliver on the mandate the country gave him in last year’s election, and point out that Sir Keir Starmer is often underestimated – first as party leader and now as prime minister.

But on this occasion, he underestimated his own MPs.

His job was already difficult enough – and after this it will be even harder still.

If he can’t govern his party, he can’t deliver change he promised.

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