December 1, 2022

Treasury will not publish OBR forecast delivered to them on 7 October until 23 November

The Treasury said that Liz Truss, Kwasi Kwarteng and the OBR discussed the “economic and fiscal outlook” as well as the process for growth forecasts.

However, they said the forecast – which they will receive on 7 October – won’t be published until 23 November. The government also said it “values” the OBR’s scrutiny.

The official readout from the Treasury said:

  • This morning the prime minister, Liz Truss, and chancellor, Kwasi Kwarteng, met with the OBR’s budget responsibility committee, including the chair, Richard Hughes, at No 10 Downing Street.

  • They discussed the process for the upcoming economic and fiscal forecast, which will be published on 23 November, and the economic and fiscal outlook.

  • They agreed, as is usual, to work closely together throughout the forecast process and beyond.

  • The prime minister and chancellor reaffirmed their commitment to the independent OBR and made clear that they value its scrutiny.

Key events

Filters BETA

Summary

Here is a round-up of today’s stories from Westminster:

  • Following a meeting with the prime minister, Liz Truss, and the chancellor, Kwasi Kwarteng, the Office for Budget Responsibility has confirmed it will deliver an initial forecast on 7 October. A spokesperson for the OBR said: “[The forecast] will, as always, be based on our independent judgement about economic and fiscal prospects and the impact of the government’s policies”. The announcement comes after a 48-minute emergency meeting at 11 Downing Street this morning.

  • The Treasury said that Truss, Kwarteng and the OBR discussed the “economic and fiscal outlook” as well as the process for growth forecasts. However, they said the forecast – which they will receive on 7 October – won’t be published until 23 November. The government also said it “values” the OBR’s scrutiny.

  • A Treasury minister has contradicted the UK’s independent watchdog for public finances, saying it would not have been able to produce a forecast in time for the government’s mini-budget. Andrew Griffith, the financial secretary to the Treasury, told broadcasters the growth plan put forward by the prime minister, Liz Truss, and the chancellor, Kwasi Kwarteng, contained “a lot of detail” and repeatedly asserted it was “40 pages long”, meaning it would have been impossible for the Office for Budget Responsibility (OBR) to have produced an accurate forecast in time.

  • The prime minister will be on the BBC’s Sunday with Laura Kuenssberg this weekend as the Conservative party conference begins, PA Media reported. Liz Truss will be interviewed on the weekend politics programme, which begins at 8.30am. The shadow chancellor, Rachel Reeves, will also appear on the show.

  • Half of the public now believe it is likely Keir Starmer will become prime minister, according to polls, reports PA news. A poll of 1,000 adults by Ipsos found 51% think Starmer will enter No 10, up from 38% surveyed in May. More than one-third of voters (35%) said it was unlikely Starmer would become prime minister, a decrease from 50% in January.

  • Talks aimed at ending the dispute over the Northern Ireland Brexit protocol are set to reopen following a video meeting between the foreign secretary James Cleverly and the European commission vice president Maros Sefcovic on Friday. Sefcovic said he had a “good conversation” with Cleverly during a call on Friday lunchtime.

  • Liz Truss has previously suggested universal benefits such as the state pension should be scrapped because of the “huge expense” to taxpayers of “recycling” their money through the system – prompting fears she could go further still with her plans to cut back the benefits bill. The proposal, included in her motion to the Liberal Democrat Youth conference in spring 1995, highlighted the “enormous – and rising – cost of pensions and child benefit”, calling for a “search for realistic alternatives to universal benefits”.

  • The Greens have kicked off their conference with a call for taxes on wealth and “dirty profits” to finance the transition to renewable energy – while warning Labour’s plans, unveiled last week, are woefully insufficient. At the gathering in Harrogate, days after a Labour conference based heavily around clean power initiatives, the Green party in England and Wales – the Scottish Greens are separate – repeatedly stressed policy differences over not just renewables but areas such as support for strikers and public ownership.

That’s it from me, Tom Ambrose, for today. My colleague Harry Taylor will be along shortly to continue bringing you all the latest UK political news.

Peter Walker

Peter Walker

The Greens have kicked off their conference with a call for taxes on wealth and “dirty profits” to finance the transition to renewable energy – while warning Labour’s plans, unveiled last week, are woefully insufficient.

At the gathering in Harrogate, days after a Labour conference based heavily around clean power initiatives, the Green party in England and Wales – the Scottish Greens are separate – repeatedly stressed policy differences over not just renewables but areas such as support for strikers and public ownership.

The party’s co-leaders, Carla Denyer and Adrian Ramsay, pledged in a joint speech to introduce an emergency tax package that would fund renewable energy and a mass scheme for domestic insulation.

The pair were elected on a promise to focus less on links with activists such as Extinction Rebellion and more on pushing for greater electoral success, overseeing significant gains in May’s local elections.

Introduced as “the country’s next Green MPs” – both are standing in target seats, Denyer in Bristol and Ramsay in Suffolk – they also condemned the impact of Liz Truss’s government, calling it “nothing short of dangerous”.

Their tax scheme, Denyer said, would target the richest 1% of households based on their wealth rather than income, while the dirty profits tax would be aimed at the biggest polluters.

Lisa O'Carroll

Lisa O’Carroll

Talks aimed at ending the dispute over the Northern Ireland Brexit protocol are set to reopen following a video meeting between the foreign secretary James Cleverly and the European commission vice president Maros Sefcovic on Friday.

Sefcovic said he had a “good conversation” with Cleverly during a call on Friday lunchtime.

Good conversation w/ @JamesCleverly on Protocol on IE/NI.

Both sides agree to look for solutions around the Protocol, to bring predictability & certainty to people in Northern Ireland. The 🇪🇺 is committed to joint efforts.

Teams will meet soon. James & I will stay in contact. pic.twitter.com/F4orAvSi8Z

— Maroš Šefčovič🇪🇺 (@MarosSefcovic) September 30, 2022

Political level talks were put on pause in February just weeks after Liz Truss became foreign secretary due to the Russian invasion of Ukraine.

Today’s call follows weeks of intense diplomatic efforts to reset relations on the back of the arrival of Truss in Downing Street.

Hopes that talks would reopen were raised following a meeting between Truss and Ireland’s taoiseach Micheál Martin the day before the Queen’s funeral.

Matthew Weaver

Matthew Weaver

The UK is beginning to look jinxed to some foreign observers as they review the wreckage of last week’s “mini budget”.

A headline in Spain’s El Español reads: “21 days with Liz Truss: the pound falls, the Queen dies and the UK has been weakened more than ever since Brexit.”

In hindsight, the newspaper reckons that Boris Johnson’s parting shot of “Hasta la vista, baby” now sounds like a “curse”. It says Truss’s first three weeks in office “could not have been more catastrophic”.

The German tabloid Bild is also struck by Britain’s series of calamities. It says: “First Boris Johnson falls, then the Queen dies – and now the British financial system is also shaking.”

It notes: “The turbulence on the foreign exchange markets is causing even the most die-hard traders to lose sleep.”

It gleefully adds: “The Brexit British currently have a nasty money problem.”

And it is not just the German press revelling in some post-Brexit schadenfreude.

One of Liz Truss’s ministers has said “anyone paying attention” to the Tory leadership election would have known she planned to cut taxes.

The scrapping of the top rate of tax and the cutting of basic rate to 19p in the pound spooked the financial markets, sending the pound to its lowest level against the dollar.

Sterling rebounded to $1.12 on Friday morning – shy of the $1.13 seen before the announcement. The Scotland secretary, Alister Jack, said the announcement of tax cuts should not have come as a shock, PA Media reports.

Speaking to BBC Radio Scotland today, Jack said:

When you say ‘huge shock’, over the summer [Truss] was very clear that her strategy was to reduce taxes.

She and Rishi Sunak argued that out over the summer – he said one thing, she said the other – but it shouldn’t come as a shock to anyone when she said she believed the strategy was to be more of an Asian tiger economy, where you keep your higher spending but you grow your economy, and she said to do that she would be cutting taxes.

To anyone paying any attention to that leadership contest it was plain as day what was going to happen.

The new chancellor has been caught up in international controversy after announcing sweeping tax cuts in a mini-budget which resulted in a plunge in the pound, soaring mortgage rates and a £65bn intervention by the Bank of England to bail out pension funds.

We look back at the week of market turmoil:

From mini-budget to market turmoil: Kwasi Kwarteng’s week – video timeline

Kalyeena Makortoff

Kalyeena Makortoff

The City watchdog is asking banks how they plan to step in and support struggling mortgage borrowers, as lenders such as Virgin Money relaunch home loans at higher rates following a spate of withdrawals sparked by this week’s market meltdown.

Supervisors at the Financial Conduct Authority (FCA) have been holding talks with lenders to understand how their mortgage customers are faring and the kind of options that are on the table that would give struggling homeowners some breathing space.

Brokers estimate that about 1.9 million mortgage borrowers are due to come out of fixed-rate deals next year, raising fears that homeowners could struggle to afford higher monthly payments on new loans.

Read more here:

Half of the public now believe it is likely Keir Starmer will become prime minister, according to polls, reports PA news.

A poll of 1,000 adults by Ipsos found 51% think Starmer will enter No 10, up from 38% surveyed in May.

More than one-third of voters (35%) said it was unlikely Starmer would become prime minister, a decrease from 50% in January.

Half of those polled on September 28-29 said they thought Liz Truss was doing a bad job as prime minister, with 18% saying she was doing a good job.

When asked about Conservative alternatives for the top job, 35% said the defeated leadership candidate Rishi Sunak would do a better job at leading the government than Truss, with 39% saying it would make no difference.

Our political correspondent Peter Walker is at the Greens’ conference in Harrogate.

Party co-leaders Carla Denyer and Adrian Ramsay have taken the stage, with Denyer saying there is panic in the UK due to a crisis caused “so the Tories can give a tax cut to their mates”.

She added that the government seemed committed to creating more inequality.

Fairly flashy backdrop to the main speech of the Greens’ conference, by co-leaders Carla Denyer and Adrian Ramsay. Denyer begins by saying there is “panic” in the UK due to a crisis caused “so the Tories can give a tax cut to their mates”. pic.twitter.com/MLkzb1ztwz

— Peter Walker (@peterwalker99) September 30, 2022

Jamie Grierson

Jamie Grierson

It’s been a week since the chancellor, Kwasi Kwarteng, delivered his “fiscal event”, heralding “a new approach for a new era” that left the Daily Mail cooing: “At last! A true Tory budget.”

The impact of which has been devastating, with even the rightwing Economist saying the government’s reckless incompetence may have already damaged it “beyond repair”. Here we look at the key figures that defined one of the worst probation periods in history.

£65bn

The Bank of England triggered an emergency £65bn bond-buying programme on Wednesday to stem the crisis triggered by Liz Truss and Kwarteng’s growth plan, which put entire pension funds at risk of insolvency.

10.6%

The British Retail Consortium revealed food price inflation surged again to 10.6%, compared with an already staggering 9.3% last month.

232

The FTSE 100 has fallen by about 232 points since last Friday as jittery investors took flight.

Read more on Kwasi Kwarteng’s mini-budget in numbers here:

Just over a week ago, this year’s Conservative party conference might have been viewed by Liz Truss as an ideal platform to showcase her vision for Britain after a month in her role as prime minister.

Now – with markets in turmoil and the pound having fallen to record lows after the government’s mini-budget – the Tory faithful will gather at Birmingham’s International Convention Centre from Sunday to Wednesday in very different circumstances.

Here is a cheat sheet from my colleague Ben Quinn, with all you need to know going into next week.

Jennifer Rankin

Jennifer Rankin

EU energy ministers have agreed to levy windfall taxes on energy companies’ profits, and to cut electricity use, but remain at loggerheads over proposals to cap the price of gas.

Meeting in Brussels on Friday, the bloc’s 27 energy ministers signed off on proposals to levy a “solidarity contribution” on fossil fuel producers that have benefited from soaring energy prices.

Revenues of renewable energy and nuclear power companies will be capped in response to the “unexpectedly large financial gains” made in recent months, as a result of their profits being linked to the price of expensive gas and coal, according to an EU statement.

The measures, which together could raise €140bn (£123bn) to help lower consumer bills and fund the switch to green energy across the EU, contrast with the British government’s approach. Liz Truss, the UK prime minister, has ruled out extending the £5bn energy tax introduced by the former chancellor Rishi Sunak.

Truss to appear on Laura Kuenssberg’s BBC show on Sunday

The prime minister will be on the BBC’s Sunday with Laura Kuenssberg this weekend as the Conservative party conference begins, PA Media reported.

Liz Truss will be interviewed on the weekend politics programme, which begins at 8.30am.

The shadow chancellor, Rachel Reeves, will also appear on the show.

The Treasury has restated the full independent analysis by the OBR will be published on 23 November.

In a tweet, the Treasury said the prime minister and chancellor used their meeting with the OBR to reaffirm “their commitment to the OBR’s independence and made clear that they value its scrutiny”.

“The full economic & fiscal forecast will be published November 23,” the department said.

The Liberal Democrats have accused ministers of “allowing the economy to fly blind for two months”, PA Media reported.

Responding to Liz Truss and Kwasi Kwarteng’s meeting with the OBR, the Liberal Democrat leader, Ed Davey, said:

Delaying this forecast means shutting the door long after the horse has bolted.

Liz Truss and Kwasi Kwarteng are allowing the economy to fly blind for two months while their reckless plans cause pension and mortgage misery for millions of British people.

He added:

Families and businesses can’t afford to wait any longer for this government to fix their botched, unfair budget.

Truss and Kwarteng must cancel the Conservative conference, recall parliament and propose a new budget now, before any more people lose their homes or close their business.

Treasury will not publish OBR forecast delivered to them on 7 October until 23 November

The Treasury said that Liz Truss, Kwasi Kwarteng and the OBR discussed the “economic and fiscal outlook” as well as the process for growth forecasts.

However, they said the forecast – which they will receive on 7 October – won’t be published until 23 November. The government also said it “values” the OBR’s scrutiny.

The official readout from the Treasury said:

  • This morning the prime minister, Liz Truss, and chancellor, Kwasi Kwarteng, met with the OBR’s budget responsibility committee, including the chair, Richard Hughes, at No 10 Downing Street.

  • They discussed the process for the upcoming economic and fiscal forecast, which will be published on 23 November, and the economic and fiscal outlook.

  • They agreed, as is usual, to work closely together throughout the forecast process and beyond.

  • The prime minister and chancellor reaffirmed their commitment to the independent OBR and made clear that they value its scrutiny.

Source link