Chancellor says ‘mistakes’ made and taxes set to rise as Liz Truss clings to power – UK politics live

The Guardian’s economics editor, Larry Elliott, reports on how Kwasi Kwarteng’s fate was sealed by the IMF orthodoxy he rallied against:

In a way, it was appropriate that Kwarteng’s last full day in the job should have been in Washington, because the IMF is the ultimate bastion of the economic orthodoxy the Truss government has been battling against for the past six weeks. Kwarteng’s epitaph as chancellor might well be: I fought the orthodoxy and the orthodoxy won.

The IMF’s unhappiness with the UK first surfaced two weeks before the annual meetings in Washington, when it put out a statement in the wake of September’s tax-cutting mini budget saying the measures were likely to “increase inequality”, and it did not approve of large and unfunded stimulus packages when inflation was so high.

This week, the IMF turned the screw. Tuesday, the day before Kwarteng’s arrival, saw the release of the Fund’s two flagship publications: the world economic outlook and the global financial stability review. Both were critical of the UK, pointing out that the Treasury was adding to the cost of living at the same time as the Bank of England was raising interest rates to bring down inflation. It was, one official put it, like two people fighting over a car’s steering wheel.

On his first full day as chancellor, Jeremy Hunt has done a series of interviews in which he made the following points:

• He refused to commit to increasing benefits in line with inflation. But claimed he is “very sensitive” to the needs of the poorest.

• Claimed Liz Truss has “listened” to crisis caused by mini-budget. She will be judged at the next election by what she does over the next 18 months.

• Warmed all government departments, including the NHS and defence, will face spending cuts. “Difficult decisions” to come.

• Pledged that money that would have been received from the health and social care levy will be protected.

• Some taxes will go up. Others will not come down “as much as people hoped”.

• The Conservatives are united “around the most important issues” including growth and Brexit.

• He will meet with treasury officials later today and with Truss tomorrow.

• It was a “mistake” to cut taxes of wealthiest and to “fly blind” without the confidence of the Office of Budget Responsibility.

• He declined to give any specific commitments about his fiscal statement on 31 October.

Rachel Reeves, the shadow chancellor, has responded to Jeremy Hunt’s first interviews by declaring a “Tory crisis – made in Downing Street and paid for by working people”.

She condemned the “contradictory, chaotic messages coming from Downing Street”, which she said are “totally unacceptable”.

She said:

The damage has been done. It’s clear they’ve got no plan to clean up their mess. At a time when people’s mortgages are skyrocketing and businesses have no certainty, the contradictory, chaotic messages coming from Downing Street are totally unacceptable.

We don’t just need a new chancellor; we need a Labour government. Only Labour offers the leadership and plan Britain needs to fix this crisis and grow the economy.

Pippa Crerar

‘It feels like game over’: From the Guardian’s political editor, Pippa Crerar:

Within minutes of the announcement that she had made it to the final two in the Tory leadership contest in July, Liz Truss sent Tory MPs a message on social media.

“Thank you for putting your trust in me,” she tweeted. “I’m ready to hit the ground from day one.” Her post was quickly deleted and the word “running” was added in.

But her initial message could not have been more prescient.

Ever since she took over as prime minister just 38 days ago, Truss’s premiership has been hurtling downwards towards the hard earth of economic reality. She is now fighting for her political survival.

That is after a chaotic 24 hours during which Truss and her chancellor insisted publicly they were sticking to the plan not to put up corporation tax – even as officials were privately briefing the exact opposite.

Kwasi Kwarteng’s middle-of-the-night dash back from Washington confirmed the situation had reached crisis point. As the sun rose over Westminster, rumours he was about to be sacked were already spreading. One No 10 insider claimed Truss already knew she wanted him to “carry the can” over the mini-budget disaster – while he was telling reporters he wasn’t going anywhere.

Truss will be hoping that sacking Kwarteng as chancellor will take the heat off her, at the very least buying her some valuable time to try to steady the mutinous Tory ship. But as his departure letter – and her reply – showed, their radical plan to rip up the economy to boost growth was very much a joint endeavour.

Kwarteng stressed to the prime minister that it was “your” vision, while she responded that “we share the same vision”.

Despite the finger pointing, the pair have been on the same ideological journey for years, with the ill-fated budget fleshed out over coffee and biscotti in Kwarteng’s Greenwich home way back in August.

The rest of the article is here:

On today’s front page of the Times, Kwasi Kwarteng says Liz Truss has only bought herself “a few weeks” by sacking him as chancellor and reversing the mini-budget.

Actor Miriam Margolyes said she wanted to tell Jeremy Hunt ‘Fuck you, bastard’ after appearing on Radio 4 immediately after the new chancellor.

Speaking on the Today programme at the end of an interview about the death of Robbie Coltrane, she said:

When I saw him [Hunt] there, I just said: ‘What a hell of a job, the best of luck.’

And what I really wanted to say was: ‘Fuck you, bastard,’ but you can’t say that.

How long will Liz Truss be PM, Hunt is asked? “I think what the country wants now is sustainability.”

He adds: “When we are judged at a general election we will be judged by what we deliver over the next 18 months.”

He said he does not want to “pretend it’s not been a very difficult few weeks”, but claims Conservatives are united in parliament around growth and Brexit success.

He admits:

We had a leadership election. Some people, including me, didn’t vote for the prime minister, but we recognise she won it fair and square.

Hunt insists Truss “has listened” after the mini-budget fallout.

On the pledge to cut personal income tax, he says he “very much” hopes it can be cut, but that he needs to look at everything “in the round”.

Insists tax cuts must be sustainable and funded.

UK already has debt at 97% of GDP, he says, the highest level of debt since the 1960s.