Devolved nations demand urgent meeting with chancellor as Tory top team doubles down on plan to cut spending

Published

2 years ago

October 1, 2022

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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”

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.

“[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.

“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.

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.

UK

Starmer says UK will ‘set out a plan’ to raise defence spending to 2.5%

Published

3 hours ago

November 23, 2024

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Starmer says UK will 'set out a plan' to raise defence spending to 2.5%

The UK will “set out a plan” to lift defence spending to 2.5% of national income in the spring, the prime minister has said, finally offering a timeframe for an announcement on the long-awaited hike after mounting criticism.

Sir Keir Starmer gave the date during a phone call with Mark Rutte, the secretary general of NATO, in the wake of threats by Moscow to target UK and US military facilities following a decision by London and Washington to let Ukraine fire their missiles inside Russia.

There was no clarity though on when the 2.5% level will be achieved. The UK says it currently spends around 2.3% of GDP on defence.

Ukraine war latest: Follow live updates

A spokeswoman for Downing Street said that the two men “began by discussing the situation in Ukraine and reiterated the importance of putting the country in the strongest possible position going into the winter”.

They also talked about the deployment of thousands of North Korean soldiers to fight alongside Russia.

“The prime minister underscored the need for all NATO countries to step up in support of our collective defence and updated on the government’s progress on the strategic defence review,” the spokeswoman said.

“His government would set out the path to 2.5% in the spring.”

The defence review will also be published in the spring.

While a date for an announcement on 2.5% will be welcomed by the Ministry of Defence, analysts have long warned that such an increase is still well below the amount that is needed to rebuild the armed forces after decades of decline to meet growing global threats from Russia, an increasingly assertive China, North Korea and Iran.

They say the UK needs to be aiming to hit at least 3% – probably higher.

With Donald Trump returning to the White House, there will be significantly more pressure on the UK and other European NATO allies to accelerate increases in defence spending.

UK

Storm Bert: Snow, rain and wind as weather warnings cover most of UK

Published

5 hours ago

November 23, 2024

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Storm Bert: Snow, rain and wind as weather warnings cover most of UK

Snow, rain and strong winds are expected to disrupt travel plans and potentially cause flooding as Storm Bert hits the UK.

Several weather warnings are in place, while 16 flood alerts have been issued – warning flooding is possible – in England and Scotland.

Most of the UK is affected by yellow warnings for either wind, rain or snow, with a slightly more severe amber warning covering parts of northern England and central Scotland.

Two areas of Ireland have been issued a rare red warning for heavy rain until 10am.

Check out the forecast in your area

London, East Anglia, Birmingham, Manchester, Liverpool, Hull and swathes of the Midlands are the only parts with no current warnings in place.

Met Office meteorologist Aidan McGivern described a “multiple hazard event” going into Saturday morning.

“We’ll see two to four hours of heavy snow across parts of northern England and Scotland during Saturday morning,” he said.

“This snow will accumulate thick and fast, with five to 10cm at lower levels and as much as 20 to 40cm over hills accompanied by strong winds.

“You can expect blizzards over hills across northern England and Scotland, atrocious conditions for travelling and going over the hills and also the risk of power interruptions because of snow build up on power lines.

“So all in all, a multiple hazard event as we go into Saturday morning.”

Temperatures will rise quickly as the storm brings milder air from the Atlantic, he said, resulting in a “rapid thaw” by the afternoon.

Where the warnings are and when

South coast – A yellow warning for wind is in place for the entire south coast of England from 3pm until 9pm, with a slight chance of damage to buildings and power cuts.

Southwest – From 6am, a yellow warning for rain is in place in the southwest of England, from Cornwall up to Oxford and stretching to Portsmouth. This is in place until 11.45pm.

Wales – Heavy rain is likely to cause some travel disruption, particularly in South Wales, with a yellow warning across the country lasting 24 hours from 6am.

Northern Ireland – A yellow warning for rain and snow kicked in at midnight and lasts until 11am, likely affecting journey times on roads and rails.

Midlands, north and Scotland – A yellow warning for rain and snow reaching from Stoke and Nottingham up to all of Scotland started at 4am and stays in place until 9am. Manchester, Liverpool and Hull are not affected.

Southern Scotland – An amber warning for snow starts at 7am and ends at midday, covering the Pennines, Yorkshire Dales and some southern parts of Scotland.

Central Scotland – Parts of central Scotland can expect some heavy snowfall, with an amber warning for snow and ice from 7am until 5pm over Aberfeldy and surrounding areas, northwest of Perth and Dundee.

East and west coasts – From 5am until 7pm, a yellow warning for wind covers the entire eastern coasts of Scotland and northern England, down to Grimsby.

The same warning covers much of the western coastline from Wales up to northern Scotland, though Manchester and Liverpool are not included.

What the weather warnings mean

• Yellow – people are advised to check the details of the forecast and consider extra steps to minimise any impact, while disruption is likely, particularly for travel;
• Amber – disruption is more likely and more widespread and people are advised to change plans impacted by weather;
• Red – reserved for very dangerous weather that can pose a danger to life and cause substantial travel disruption.

Travel disruption

While airports are not expecting disruption, rail companies have announced service changes over the weekend.

In Scotland, there will be speed restrictions on the West Highland Line, Highland Mainline, Stranraer Line, Glasgow South Western Line, Far North Line, and West Coast Mainline between Carstairs and the border.

ScotRail has also withdrawn services from Inverness to Elgin, Aberdeen to Inverurie, and Glasgow Queen Street to Oban.

The TransPennine Express, meanwhile, “strongly” urged customers not to travel north of Carlisle on Saturday and Avanti West Coast advised against travel north of Preston.

UK

Gatwick Airport: Police release two people who were detained amid security incident as South Terminal reopens

Published

12 hours ago

November 22, 2024

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Gatwick Airport: Police release two people who were detained amid security incident as South Terminal reopens

Two people detained during a security incident at Gatwick Airport have been allowed to continue their journeys after a suspect package saw a “large part” of the South Terminal evacuated.

The terminal was closed for hours after the discovery of a “suspected prohibited item” in a passenger’s luggage sparked an emergency response. It reopened at around 3.45pm.

Officers from the EOD (Explosive Ordnance Disposal) team “made the package safe” before handing the airport back to its operator, Sussex Police said.

Their statement continued: “Two people who were detained while enquiries were ongoing have subsequently been allowed to continue their journeys.

“There will remain an increased police presence in the area to assist with passengers accessing the South Terminal for onward travel.”

The force also thanked the public and airport staff for their patience while the incident was ongoing.

Earlier the airport, which is the UK’s second busiest, said the terminal was evacuated after a “security incident”.

“The earlier security alert has now been resolved and cleared by police,” it later said in a statement on Friday afternoon.

“The South Terminal is reopening to staff and will be open to passengers shortly.”

Gatwick said some flights were cancelled while others were delayed.

It said passengers should contact their airlines for any updates on flights.

Footage on social media taken outside the airport showed crowds of travellers heading away from the terminal building.

“Arrived at London Gatwick for routine connection. Got through customs to find out they’re evacuating the entire airport,” one passenger said.

“Even people through security are being taken outside. Trains shut down,” another passenger added, who said “thousands” of people were forced to leave.

Another passenger said people near the gates were being told to stay there and not go back to the departure lounge.

People outside the airport were handed blankets and water, passengers told Sky News.

The airport said its North Terminal was still operating normally.

Gatwick Express said its trains did not call at Gatwick Airport during the police response, but the airport said trains would start calling there again once the terminal was fully reopened.

More than 600 flights were due to take off or land at Gatwick on Friday, amounting to more than 121,000 passenger seats, according to aviation analytics firm Cirium.