Babak Belurs

Minggu, 02 Oktober 2022

Kwarteng prepares to defend tax cuts as Tory rebellion mounts - Financial Times

Kwasi Kwarteng is facing a mounting Tory rebellion over his plan to scrap the 45p top rate of income tax, but will on Monday tell Conservative party members he is “confident” that the plan is “the right one”.

The chancellor’s tax-cutting “mini” Budget, which also included a wave of new government borrowing, created turmoil in the markets last week and left him scrambling to prove that he will get a grip on debt.

Liz Truss, prime minister, has been warned that she faces defeat in the House of Commons if she persists with the abolition of the 45p rate, the most controversial element of a debt-funded £45bn package of tax cuts.

Michael Gove, former cabinet minister, on Sunday put himself at the forefront of the Tory mutiny over the tax cut for the richest 1 per cent of Britons, saying it was wrong at a time when “people are suffering”.

Grant Shapps, former transport secretary, also denounced the plan, saying it would not survive a parliamentary vote.

Another Tory MP representing a working-class seat described as “deranged” the idea of cutting taxes for the rich while planning cuts to benefits and public services.

One minister said a retreat over the scrapping of the 45p tax band was inevitable. “We can’t get it through, so we might as well stop now. Everyone has to U-turn sometimes.”

Truss insisted on Sunday that she would stick to the plan, but admitted that the 45p tax rate change had not been discussed in cabinet: “It was a decision the chancellor made,” she told the BBC’s Sunday with Laura Kuenssberg.

Tory officials denied that she was trying to blame Kwarteng. Chris Philp, Treasury chief secretary, has denied to colleagues reports that he was a prime mover behind the policy.

The tensions cast a cloud over the Conservatives’ party conference, which began in Birmingham on Sunday. Kwarteng will on Monday tell attendees: “We must stay the course. I am confident our plan is the right one.”

He will also promise “an ironclad commitment to fiscal discipline”.

“The path ahead of us was one of slow, managed decline. And I refuse to accept that it is somehow Britain’s destiny to fall into middle-income status or that the tax burden reaching a 70-year high is somehow inevitable,” the chancellor will say.

But Gove told the BBC that “using borrowed money to fund tax cuts is not Conservative” and that cutting taxes on earnings above £150,000 and removing a cap on bankers’ bonuses projected “the wrong values”.

He later said: “It’s going to be very, very, very difficult to argue that it is right to reduce welfare when we’re also reducing taxes for the wealthiest.”

Gove also suggested that Truss did not have a mandate to cut taxes for the wealthy, saying she had not mentioned the idea in the Tory leadership contest.

Gove is the highest profile critic of Truss’s new economic plan to air his views publicly, but he is far from alone. A number of Tory MPs told the Financial Times that they could not support the plan and that it would be defeated in the House of Commons unless the prime minister changed tack.

Truss admitted that mistakes were made in the controversial “mini” Budget that sparked market turmoil last week but said she would not retreat on her plan to deliver £45bn of unfunded tax cuts, insisting it would help deliver growth.

“We should have laid the ground better and I have learned from that,” she said.

The PM repeatedly refused to say whether she would cut public spending to make the sums add up and said she needed to work to win “the hearts and minds” of Tory MPs to convince them her plan was right.

Some Conservative MPs have already started speculating on the possibility that Truss could be replaced by her leadership rival Rishi Sunak, who is spending conference week in his North Yorkshire constituency.

The plan triggered fears of higher inflation, causing the pound to fall to a record low against the dollar and a sell-off in UK government bonds. Lenders pulled thousands of mortgage products and the Bank of England launched a £65bn bond-buying scheme to stabilise markets.

Opinion polls in the aftermath of the market rout suggested that the Tories were trailing the Labour opposition by margins of up to 33 points.

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2022-10-02 21:41:32Z
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Kwasi Kwarteng under pressure over champagne reception at home of hedge fund boss - Financial Times

The chair of the Labour party has written to her Conservative counterpart calling on him to provide a full list of attendees at a private champagne reception attended by Kwasi Kwarteng just hours after his controversial “mini” Budget.

Jake Berry, Tory chair, has defended the chancellor’s meeting with financiers at the home of a wealthy hedge fund manager. Berry insisted on Sunday that City investors and other donors should be “lauded” by the general public.

Anneliese Dodds, Labour chair, has written to Berry urging him to produce a full list of attendees at the event and whether they paid a fee to be there or pledged donations. She also asked whether civil servants were present and minutes taken, “and if not, then why not” given that sensitive information may have been disclosed.

“Many people are sickened by the image of champagne-quaffing Conservative donors encouraging the chancellor to press ahead with further tax cuts for billionaires, at the same time as many members of the British public are unable to access a mortgage,” she wrote.

But Berry said on Sunday that nothing untoward should be read into the fact that Kwarteng socialised with financial figures soon after the tax cut announcement, which sent sterling into freefall and prompted a sharp rise in gilt yields.

The Tory chair insisted that no confidential information was discussed during the gathering, where he said Kwarteng consumed soft drinks rather than champagne.

“We often have champagne receptions for donors in the Conservative party and, in fact, these people should be lauded because we don’t have public funding of political parties and these are people who make money and donate to political parties in the same way as they do for the Labour party and the Liberal Democrats,” he told Sky News.

Berry said the event was not dominated by hedge funds but instead was attended by “some of Britain’s leading entrepreneurs”. Pressed on whether some hedge fund managers were at the event, Berry conceded this was the case: “There were, or there was I think one that I know of.”

That would appear to be a reference to Andrew Law, head of hedge fund Caxton Associates and a Tory donor, who hosted the private event.

One of the attendees said: “There were 20 or 30 people. It was a briefing by the chancellor after the budget so everything he said was in the public domain, nothing new. It was not a celebration, it was a post-Budget briefing to the people who are likely to be investing in the UK.”

According to The Sunday Times, the guest list included stockbroker Howard Shore, banker Sir Henry Angest, financier Lord Leigh of Hurley and William Salomon of Hansa Capital, along with other figures from industries including hospitality, healthcare and property.

Kwarteng used to work at Odey Asset Management, a hedge fund whose founder Crispin Odey has shorted sterling in recent weeks.

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2022-10-02 17:33:25Z
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Kwasi Kwarteng faces calls for inquiry after attending champagne party with hedge fund managers hours after delivering mini-budget - Sky News

Kwasi Kwarteng is facing calls for an official inquiry following a report that he attended a private champagne reception with hedge fund managers following his mini-budget.

The Sunday Times newspaper reported that the chancellor joined the gathering in Chelsea on 23 September and was said to have been "egged on" to pursue his plan of £45bn of unfunded tax cuts.

Those hedge fund managers present stood to gain from the collapse in sterling following the mini-budget.

Speaking to Sky News' Ridge on Sunday programme, Conservative Party Chairman Jake Berry denied that Mr Kwarteng discussed plans for future spending cuts at the event.

Liz Truss stands by mini-budget - Politics latest

Mr Berry, who attended the event, said: "I certainly didn't hear him make those comments.

"I was there so I listened to what he said and what he talked about was his plan for growth."

Mr Berry added: "I can categorically rule out that in terms of the address he made to the group of people who were there as part of this normal treasurer's event, he did not give any insight into future plans and I'm sure in terms of his private conversations he didn't give any."

He said that the event's guests were broader than just hedge fund managers and also included property developers.

Mr Berry said these individuals "should be lauded" for supporting political parties and that the reception was part of the "normal drumbeat" of treasury events.

The Tory party chairman also noted that he believed Mr Kwarteng was "drinking a soft drink" at the do.

Also probed on the champagne reception, Liz Truss said Mr Kwarteng "meets business people all the time".

"I do not manage Kwasi Kwarteng's diary, believe me," the PM told the BBC.

Pressed on whether it would have been better if he had not attended since people are struggling with the cost-of-living crisis, Ms Truss said: "I get up every morning as prime minister thinking how can we make our country more successful, how can we reassure people, how can we help people get through these very difficult times and we do face difficult times...

"And that's what I'm focused on. That's what the chancellor is focused on and that is what the whole cabinet is focused on."

The Liberal Democrats have called for an inquiry into the matter.

The party's treasury spokeswoman Sarah Olney said: "While struggling homeowners saw their mortgage bills spiral, it seems the chancellor was sipping champagne with hedge fund managers profiting from the falling pound.

"How out of touch can you get? We need an official inquiry into this now."

A source close to the chancellor said: "Any suggestion attendees had access to privileged information is total nonsense.

"The Growth Plan published on Friday included a commitment to review our tax code to make it simpler, better for families and more pro-growth.

"The government's ambitions on lowering the tax burden are hardly a state secret."

The prime minister is set to face a wretched week at the Tory Party conference after the disastrous reaction to Mr Kwarteng's tax-cutting mini-budget last month.

But ahead of the official opening of the event in Birmingham which comes at the end of another tumultuous week for the Conservative Party, Ms Truss said she was sticking to her guns and that the tax cuts were essential to getting the economy to grow again.

A series of polls taken this week have shown a massive drop in popularity for the Tories and a record high for Labour following the mini-budget.

The latest poll from Opinium showed 55% of voters disapprove of both Ms Truss and Mr Kwarteng while Labour enjoyed a 19-point boost.

And 75% of all voters think they have lost control of the economy. When it comes to Tory voters, 71% think they do not have the economy under control versus just 24% who believe they do.

But despite the criticism and plummeting support, Ms Truss this morning doubled down on the decision to remove the top rate of income tax (45%) as "it's part of an overall package of making our tax system simpler and lower" - but admitted the policy was not discussed with the cabinet.

"It was a decision that the chancellor made," she told the BBC.

A spokesperson for the chancellor said: "As the PM said this morning, the 45p rate raises very little and makes our tax system more complicated.

"While the chancellor obviously makes all tax decisions, the prime minister and Kwasi are in lockstep on this."

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2022-10-02 09:39:14Z
1579226251

Sabtu, 01 Oktober 2022

'Off you pop then': Mayor slams fellow Conservative who called Birmingham a 'dump' - Sky News

The Conservative mayor of the West Midlands has hit back at a fellow Tory who described Birmingham as a "dump".

Daniel Grainger, the chairman of Young Conservative Network (YCN), was told to leave and "take anyone with the same views with you" by Andy Street after sharing the remark on Twitter.

After deleting the post which read "Birmingham is a dump", Mr Grainger apologised and claimed it "was not about the city" and that he had been the victim of a mugging attempt earlier on Saturday.

The city is hosting the Conservative Party's annual conference this week.

In response, Mr Street tweeted: "Off you pop then", before adding, "Try and take some time to grow up and understand just why this city is so special whilst you're gone".

Mr Street added: "I may be a Conservative, but I'm also a bloody proud Brummie. I won't have anyone who's never lived or breathed this place trying to put us down."

In a later tweet, Mr Grainger apologised to Mr Street and wrote: "I was angry and tweeted without thinking, I apologise for any offence caused."

The tweet attracted criticism from outside the party too, from Labour MP for Birmingham Yardley Jess Phillips, who quoted the original tweet and added: "I see the Tories doing their best to endear themselves".

The exchange comes against a backdrop of wider divisions emerging within the Tory party after the chancellor's mini-budget prompted market turmoil.

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2022-10-01 14:05:58Z
1577029461

Train strike: Worst rail disruption of year as workers walk out - BBC

Members of the RMT, TSSA and ASLEF staff join the picket line at Euston station

More than 50,000 workers are taking part in a strike resulting in the worst rail disruption of the year so far.

Members of four unions are staging 24-hour walkout in a long-running dispute over pay, jobs and conditions.

It means only 11% of usual train services are running, with large areas of the UK with no services at all.

Unions say there has been little progress in resolving disputes, while rail bosses want pay to be linked to modernisation.

It is the first time the four unions - RMT, Aslef, Unite and the TSSA - have walked out on the same day. The co-ordinated action involves about 54,000 members, meaning services are more disrupted than on previous strike days when only one or two unions were striking.

Large parts of the network have virtually ground to a halt with only about one in 10 services running, and trains starting later and finishing earlier than usual.

No trains are running between London and major cities including Edinburgh, Brighton and Newcastle.

Some operators including Northern, Avanti West Coast and Southeastern are not running any trains for the entire day. Heathrow Express is also suspended.

In Scotland, ScotRail is running only 20% of services between 07:30 BST and 18:30 in the central belt, Borders and Fife, with no trains running elsewhere on the network.

Many who had planned journeys to the capital for the London Marathon are having to rethink their plans. Those running the major charity fundraising event have to collect their event pack at ExCel London by the end of Saturday.

Most services on Sunday will start later than usual following Saturday's disruption, but London Marathon has said Southeastern trains would get passengers to the start line on time.

The strike will also affect delegates travelling to and from the Conservative party conference, which begins on Sunday, as well as thousands of people heading to football matches and other events.

'It's hitting normal people'

Karen Andrews, from Staffordshire, is raising money for her local hospital's breast care unit, where she was treated for cancer.

When the strike was announced, she says all her plans were "thrown into disarray": "Every morning... I've thought how are we going to work this out."

In the end her husband had to travel to London during the week to collect Karen's race pack and is driving her to the capital for the race.

"I understand people wanting pay rises, of course, but it's hitting normal people"," she says.

"I had to come to London a day earlier, and I will stay until Monday - so all this costs," says fellow runner David Wright, who lives in Dover.

"I'm very disappointed in Mick Lynch," he tells BBC News. "Strikes don't work."

"I'm also angry with the government - they are not doing enough," he says.

Speaking from a picket line at London's Euston Station, RMT general secretary Mick Lynch said: "We haven't targeted the London Marathon, we've more targeted the Tory conference, if we're honest with you - because they're the people responsible for this mess."

He apologised for the inconvenience caused to people, adding that they would much rather have a settlement.

But he said members had to keep going with the dispute, which has lasted nearly six months. He said he believed workers had the public's full support.

He said on Saturday that members will be balloted again on further strikes. The six-month mandate for strikes runs out at the end of November.

Empty platforms at Paddington train station during strike action on Saturday 1 October

Eli Skipper, an ambulance responder based in Leicester, is among the many shift workers affected by the action. She told BBC News she has had to cancel her scheduled work as she is unable to get to the event in Nottingham. Further strike action on 8 October means she has also had to cancel next Saturday's shift.

"This is a large loss of earnings for me, particularly in the current crisis - with rising cost of living - and on top of two shifts cancellations due to the Queen's funeral." says Eli, 27

But she adds: "I support the strikes. I understand what people are standing for. The government needs to listen to the unions.

"Some of their concerns are about safety, so it's not just about wages."

The RMT union expects more than 40,000 of its members who work at Network Rail and 16 train companies will not show up for work on Saturday. Joining them are 9,000 train drivers who are members of Aslef, working at 12 train companies.

The TSSA also expects about 5,000 of its staff to walk out, alongside a few hundred members of the Unite union.

Aslef is planning a further train drivers' strike on 5 October, and another RMT walkout is scheduled for 8 October.

The Department for Transport said disruption over the weekend would "push passengers further away" and called on union bosses to reconsider.

The new Transport Secretary, Anne Marie Trevelyan, has so far met the general secretaries of both Aslef and the RMT, which has been described as a "good start".

Mick Whelan, general secretary of Aslef, said the train drivers' union would continue with talks and remained optimistic. He told BBC Breakfast: "We're not very close at all - but again, every time we meet there's an opportunity for something else on the table."

Passengers wait on the concourse at Paddington train station in London during a 24-hour strike by four unions

Aslef maintains many drivers are effectively being given a pay cut because of the rising cost of living.

Rail bosses have consistently said they want to give employees a pay rise, but there is pressure to save money after the Covid pandemic when the rail service had to be propped with taxpayers' money.

The industry argues reforms are necessary to make the service more cost efficient, but the RMT rejected the latest pay offer of 4% in the first year, plus another 4% in the second year, which was conditional on reforms.

Network Rail has repeatedly called on the union to allow members to vote on the offer, which it has called "a decent package".

Royal Mail workers are also on picket lines outside delivery and sorting offices on Saturday, on the second day of their 48-hour strike, in a dispute over pay and conditions.

Communication Workers Union members also plan to strike for 24 hours from 04:00 on 13, 20, and 25 October and 28 November. The union said it reflects the "level of anger" workers feel.

The Royal Mail Group said further strikes would make its financial position worse and threaten workers' job security.

Have you been affected by the current train strikes? You can share your experience by emailing: haveyoursay@bbc.co.uk.

Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways:

WhatsApp: +44 7756 165803
Tweet: @BBC_HaveYourSay
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If you are reading this page and can't see the form you will need to visit the mobile version of the BBC website to submit your question or comment or you can email us at HaveYourSay@bbc.co.uk. Please include your name, age and location with any submission.

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2022-10-01 13:28:36Z
1586795161

Train strike: Worst rail disruption of year as workers walk out - BBC

More than 50,000 workers are taking part in a strike which is causing the worst rail disruption of the year so far.

Members of four unions are staging 24-hour walkout in a long-running dispute over pay, jobs and conditions.

It means only 11% of usual train services are running, with large areas of the UK with no services at all.

Unions say there is little progress in resolving disputes, while rail bosses want pay to be linked to modernisation.

Large parts of the network have virtually ground to a halt with only about one in 10 services running, and trains starting later and finishing earlier than usual.

No trains are running between London and major cities including Edinburgh, Brighton and Newcastle.

Some operators including Northern, Avanti West Coast and Southeastern are not running any trains for the entire day.

In Scotland, ScotRail will only run 20% of services between 07:30 BST and 18:30 in the central belt, Borders and Fife, with no trains running elsewhere on the ScotRail network.

Most services on Sunday will start later than usual following Saturday's disruption, but London Marathon said Southeastern trains would get passengers to the start line on time.

The strike will also affect delegates travelling to and from the Conservative party conference, which begins on Sunday, as well as thousands of people heading to football matches and other events.

'It's hitting normal people'

Karen Andrews from Staffordshire is raising money for her local hospital's breast care unit, where she was treated for cancer.

She was meant to travel down by train on Saturday, but when the strike was announced, "everything was thrown into disarray".

"I've not slept very well since I knew that we were affected," she said. "And every morning when I've woken up I've thought how are we going to work this out."

She could not take time off work, but her husband decided to go to London during the week to collect her race pack. He will now be driving her down on Saturday.

"I understand people wanting pay rises, of course, but it's hitting normal people".

Speaking from a picket line at London's Euston Station, RMT general secretary Mick Lynch said: "We haven't targeted the London Marathon, we've more targeted the Tory conference - if we're honest with you - because they're the people responsible for this mess."

He apologised for the inconvenience caused to people, saying they would much rather have a settlement.

But he said members had to keep going with the dispute, which has lasted nearly six months, adding he believed workers had the public's full support.

Next week members would be balloted again on further strikes, he added. The six-month mandate for strikes runs out at the end of November.

"This is a large loss of earnings for me, particularly in the current crisis - with rising cost of living - and on top of two shifts cancellations due to the Queen's funeral." said Eli, 27

But she added: "I support the strikes. I understand what people are standing for. The government needs to listen to the unions.

"Some of their concerns are about safety, so it's not just about wages."

'Pushing passengers away'

The RMT union expects more than 40,000 of its members who work at Network Rail and 16 train companies will not show up for work.

Joining them are 9,000 train drivers who are members of Aslef, working at 12 train companies. Heathrow Express, the fast service between London Paddington and the airport, is suspended.

The TSSA also expects about 5,000 of its staff to walk out. A few hundred members of the Unite union have strike action scheduled too.

The Aslef union also plans a train drivers' strike on 5 October, with another RMT walkout scheduled for 8 October.

The Department for Transport said disruption over the weekend would "push passengers further away" and called on union bosses to reconsider.

The new Transport Secretary, Anne Marie Trevelyan, has so far met the general secretaries of both Aslef and the RMT, which had been described as a "good start".

Mick Whelan, general secretary of Aslef, said the train drivers' union would continue with talks and remained optimistic.

But he told BBC Breakfast: "We're not very close at all - but again, every time we meet there's an opportunity for something else on the table."

Aslef says many drivers are effectively being given a pay cut because of the rising cost of living.

Rail bosses have consistently said they do want to give a pay rise.

There is pressure to save money due to the pandemic, when the government effectively took control of the railway, and billions of taxpayers' money was poured in to keep services going.

With travel patterns changed, the industry argues reforms are necessary to prevent taxpayers or farepayers having to put in more money.

Network Rail, which maintains the tracks and signalling systems, is pressing ahead with trying to implement changes to how its maintenance teams work. They were proving a sticking point in negotiations and could mean job losses.

The RMT rejected the latest pay offer of 4% in the first year, plus another 4% in the second year, conditional on reforms. Other benefits like discounted rail travel were included.

But Network Rail has repeatedly called on the union to allow members to vote on the offer.

Its chief executive Andrew Haines told the BBC he thought it was a "decent package" and there was a balance needed between protecting jobs and ensuring the growth of the railway system.

Royal Mail workers are also on picket lines outside delivery and sorting offices, on the second day of their 48-hour strike, in a dispute over pay and conditions.

Communication Workers Union members also plan to strike for 24 hours from 04:00 on 13, 20, and 25 October and 28 November.

These walkouts will hit the peak postal build-up to Christmas including Black Friday week and Cyber Monday.

It said its "significant announcement" on dates reflects the "level of anger" workers feel. But the Royal Mail Group said further strikes would make its financial position worse and threaten workers' job security.

Have you been affected by the current train strikes? You can share your experience by emailing: haveyoursay@bbc.co.uk.

Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways:

WhatsApp: +44 7756 165803
Tweet: @BBC_HaveYourSay
Or fill out the form below
Please read our terms & conditions and privacy policy

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Jumat, 30 September 2022

Sterling almost erases losses from Kwasi Kwarteng's mini-Budget - Financial Times

Sterling on Friday hit its highest level against the US dollar since chancellor Kwasi Kwarteng delivered the UK’s “mini” Budget a week ago.

The pound rose as much as 1.1 per cent to $1.1234 in morning dealings, almost erasing its losses from a steep sell-off this week sparked by concerns over the £45bn debt-financed tax-cutting package in the UK. Sterling later pared its gains to $1.116.

The moves on Friday came as Kwarteng and Prime Minister Liz Truss met officials at the Office for Budget Responsibility, the independent forecaster. Securing costings for the new fiscal plans is seen in financial markets as essential to restoring the government’s economic credibility.

“Maximum panic is over,” said Rupert Thompson, investment strategist at Kingswood. “We’re back close to where we were before the whole thing blew up a week ago.”

However, the brief rebound still left sterling down almost 9 per cent over the past three months, its worst quarter since the 2008 financial crisis. Reaction to the UK’s new fiscal plans had sent the pound to a record low of $1.035 against the dollar this week.

The strength of the US dollar, as investors seek a haven from falling stock and bond prices — and as the Federal Reserve raises interest rates aggressively — has added to the UK currency’s woes. The dollar advanced 0.3 per cent on Friday against a basket of six other currencies.

“When everything is underperforming the natural place to park is US dollar cash,” said Adam Cole, head of foreign exchange strategy at RBC Capital Markets. “At the root of all of those moves is tighter monetary policy but it’s playing out in slightly unusual ways.”

The outlook for the UK currency remained gloomy, Cole said, as Kwarteng’s budget had only highlighted underlying economic issues that were weighing down on sterling.

“I think what last Friday did was throw a very bright spotlight on some issues that we were already worried about, namely the macroeconomic imbalances in the UK,” he added.

Analysts warned that a negative assessment from the OBR or a clash between the independent forecaster and the government could deliver a fresh knock to sterling.

“It would be damaging if the OBR publish a serious forecast and the government takes issue with the growth assumption,” said Cole.

Weakness in sterling has sparked speculation that the currency could hit an even footing with the US dollar.

Paul Grainger, head of global fixed income and currency at Schroders, said: “The loss of confidence and unfunded nature of the [fiscal] plan have caused sterling to sell off significantly. Many market commentators are calling for it to go to parity, or lower, against the US dollar.”

Mansoor Mohi-uddin, chief economist at Bank of Singapore, said that the “bigger worry is that the underlying fundamentals haven’t changed”, adding that if the government sticks to its plan, the Bank of England will be forced to undertake a large rate increase in November. “Otherwise we’ll start seeing more turbulence for sterling.”

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2022-09-30 15:40:05Z
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Minggu, 02 Oktober 2022

More on Conservatives

Related Topics:

Sabtu, 01 Oktober 2022

'It's hitting normal people'

'It's hitting normal people'

'Pushing passengers away'

Jumat, 30 September 2022