The government’s plan to deliver tax cuts while increasing public spending risks creating “unsustainable” public debt, the Institute for Fiscal Studies (IFS) has said. The respected think tank made the comment ahead of Chancellor Kwasi Kwarteng’s “mini budget” on Friday, in which he is set to detail £30bn in tax cuts and £100bn to support household energy bills. As it is not a full budget, the government’s plans will not be accompanied by a new economic forecast from the Office for Budget Responsibility, a decision which the IFS described as “disappointing”. With debt potentially on an “ever-increasing trajectory”, the IFS said the government’s claim that cutting tax rates would lead to sustained economic growth was “a gamble at best”. “Under the new prime minister’s plans, the fiscal targets legislated in January would be missed and while we would enjoy lower taxes now, the ever-increasing debt would ultimately prove unsustainable,” said IFS deputy director Carl Emmerson. The government has also been criticized for not considering a windfall tax on excess profits made by energy companies during the war in Ukraine.
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The government lifts the moratorium on fracking
The government has lifted a moratorium on fracking in England, saying the move will increase the country’s energy security. The new licensing round is expected to result in more than 100 new licenses, the business department announced Thursday Business and Energy Secretary Jacob Rees-Mogg said: “In light of Putin’s illegal invasion of Ukraine and the weaponization of energy, strengthening our energy security is an absolute priority and – as the Prime Minister has said – we will ensure that the UK it is a net energy exporter by 2040. “Getting there will require us to explore all available avenues through solar, wind, oil and gas generation – so it’s only right that we pause to realize any potential sources of domestic gas.”
Government lifts fracking ban to grant 100 new licences
Government ends moratorium despite admitting need to ‘collect better data’ on safety Rory Sullivan22 September 2022 09:40 1663834801
Some Britons do “a very limited amount of work”, says the deputy prime minister
Deputy Prime Minister Therese Coffey has defended the move to cut benefits for part-time workers if they do not want to work longer hours. He said the government wanted to put more claimants into work – as well as reach out to “people doing a very limited amount of work”. The approach would help promote economic growth, the Tory frontbencher claimed. He told LBC: “That’s why we’re continuing to expand the number of people currently on benefits about how we can help them find maybe higher paying work or put in more hours.” “This is a combined approach in order to recognize that we want to improve the lives and well-being of people in this country,” he added. Rory Sullivan22 September 2022 09:20 1663833601
The government could allow higher ‘seismic limits’ on fracking sites, suggests Jacob Rees-Mogg
Energy Secretary Jacob Rees-Mogg has suggested ministers could allow higher “seismic limits” on fracking sites. Earlier this week, Chris Cornelius, founder of Cuadrilla, a fracking company, said the government’s support for it was a “political gesture”. “I don’t think there is any chance of fracking in the UK in the short term,” he told the Guardian. The government could allow higher ‘seismic limits’ on fracking sites, suggests Jacob Rees-Mogg Rory Sullivan22 September 2022 09:00 1663832401
IFS slams government for ‘mini budget’
The Institute for Fiscal Studies (IFS) has hit out at the government’s economic plans, warning that its level of borrowing may be “unsustainable”. IFS economist Ben Zaranko has more details here: Rory Sullivan22 September 2022 08:40 1663831201
Truss tells striking workers to ‘get back to work’
Liz Truss said striking workers must “get back to work”, adding that she remained “committed” to introducing measures to curb industrial action. Speaking in New York, the Prime Minister told reporters: “I will encourage rail workers to go back to work… I want to take a constructive approach with the unions, but I would tell them to go back to work.” The government plans to introduce anti-strike legislation that would impose a minimum level of service and raise the limit on the number of workers who must participate in strike ballots. Rory Sullivan22 September 2022 08:20 1663830001
If Truss’s “mini-Budget” doesn’t generate growth, her entire project could be doomed
Liz Truss’ entire work could be at risk if her ‘mini-budget’ fails to deliver growth, writes Andrew Grice. Chancellor Kwasi Kwarteng is expected to tear up the economic playbook that has guided the Conservatives since they took power in 2010. On Friday, he will announce a mix of tax cuts and economic reforms, aimed at securing growth of 2.5 percent a year. But critics suggest his borrowing plans could put more pressure on the struggling economy.
If Tras’s ‘mini-budget’ fails, her entire project could be doomed | Andrew Grice
This “fiscal event” will not only define the Truss government in the eyes of voters after the hiatus following the Queen’s death, but will likely decide its fate, writes Andrew Grice. Rory Sullivan22 September 2022 08:00 1663829125
The voluntary ‘real living wage’ rises to £10.90 an hour
Almost 400,000 workers are set to get a pay rise after the ‘real living wage’ increase was agreed by thousands of businesses and organisations. Hourly rates for the daily wage rise by £1 to £10.90 across the UK and by 90p to £11.95 in London. The rates are higher than the government’s statutory £9.50 an hour for adults and are paid by more than 11,000 employers accredited by the Living Wage Foundation.
The voluntary ‘real living wage’ rises to £10.90 an hour
Almost 400,000 workers are to receive aid Stuti Mishra September 22, 2022 7:45 am 1663828801
Kwasi Kwarteng will reduce benefits if part-time workers do not work longer hours
More than 100,000 people in part-time work could face benefits being cut if they do not seek more hours, the chancellor is expected to announce. Kwasi Kwarteng will unveil a major overhaul of the welfare system during his “mini-budget” on Friday. If claimants do not take “active steps” to increase earnings, their Universal Credit payments could be reduced. My colleague Adam Forrest has more details:
Kwasi Kwarteng will reduce benefits if part-time workers do not work longer hours
The chancellor’s move comes as Liz Truss says the UK has too many ‘economically inactive’ people Rory Sullivan22 September 2022 07:40 1663828103
Tras plan risks ‘unsustainable’ public debt, IFS warns
Liz Truss’ plans for sweeping tax cuts alongside a massive government support package to curb skyrocketing energy bills risk putting public finances on an “unsustainable path”, a leading think tank has warned. The Institute for Fiscal Studies (IFS) has estimated that the combination of higher spending and tax cuts means government borrowing is set to reach £100 billion a year – more than double official forecasts last March. With debt potentially on an “ever-increasing trajectory”, the IFS said the government’s claim that cutting tax rates would lead to sustained economic growth was “a gamble at best”. IFS deputy director Carl Emmerson said: “Under the new prime minister’s plans, the fiscal targets legislated in January would be missed and while we would enjoy lower taxes now, the ever-increasing debt would eventually prove unsustainable.” Adam Forrest22 September 2022 07:28 1663826937
Truss defends potential breach of Tory manifesto over fracking
The Prime Minister stressed that the energy crisis is the “number one issue we face” as she defended the potential breach of the Tory manifesto pledge to lift the fracking ban. Liz Truss insisted she would not approve “anything that involves risk” but the government has yet to produce evidence to show that hydraulic shale gas extraction is safe. The Conservatives’ 2019 manifesto pledged not to lift England’s moratorium unless fracking is scientifically proven to be safe amid earthquake concerns.
Prime Minister defends possible breach of Tory manifesto to ban fracking
The Conservatives in 2019 pledged not to lift England’s moratorium unless fracking was proven scientifically safe. Stuti Mishra22 September 2022 07:08
