Kwasi Kwarteng defends tax policy as markets falter and says he has ‘no choice’ – UK politics live | politics

key events

filter BETA

key events (3)Liz Truss (3)Almost fourth (3)

Britain should prepare for a new era of austerity, warns Simon Clarke

Simon Clarke, the rising minister and a key Liz Truss ally, has told the Times that the market chaos that followed the Government’s tax cut mini-budget would pass and warned that Britain is preparing for a new era of austerity should.

Despite the turmoil in financial markets, Clarke said Truss is showing “amazing resilience” and urged the government to channel Margaret Thatcher’s spirit to advance their vision.

The 38-year-old said:

If I had to describe one word for Liz right now, it’s purposeful. She knew – and we certainly discussed this over the summer – that this would not be an easy process.

He said the Prime Minister “relishes having the chance” to enact policy that “she thinks is right”.

Clarke added that Western countries had lived in an “idiot’s paradise” for too long and that there would be cuts in government spending to ensure “full alignment with a lower tax economy”.

Clark said:

My big concern in politics is that Western Europe just lives in a fool’s paradise where we can always be less productive compared to our fellow humans and still enjoy a very large welfare state and still believe that the two are somehow compatible through the medium are too long term.

You are not. We need to look closely at this, because if we want these strong public services, we ultimately have to pay for them. I think it’s important that we look at a state that is extremely large and see how we can ensure that it is fully geared towards a lower tax economy.

Simon Clarke arrives for a cabinet meeting at 10 Downing Street, London. Photo: Aaron Chown/PA

Updated at 5:00 AM EDT

Welsh Minister Sir Robert Buckland has said the government was “resilient” following the turmoil in financial markets following Chancellor Kwasi Kwarteng’s £45bn mini-budget tax cut.

After a week in which the pound fell to an all-time low against the dollar, Buckland said ministers were determined to increase the tax revenue needed to pay for public services, reports PA.

He told ` Radio 4 Today:

We have seen weakness in the pound, yen and euro against the dollar over the past few months. I don’t think it would be fair to say that Friday was the sole cause of the turmoil.

There has been turbulence, I don’t deny that, but what I see is when we look more closely at this package, there is this obligation to generate the tax revenues that we need for our public services and our public spending, but rather signal our obligations at the same time that this country has to let the economy grow in order to be able to pay for our public services in the future. I don’t apologize for that.

He said the chancellor will provide more details when she releases her medium-term financial plan on November 23.

Buckland added:

You will learn more about the government’s medium-term plan, which I believe will provide the markets with a high level of reassurance that this government, like its predecessors, is absolutely committed to fiscal responsibility.

Updated at 4:40 AM EDT

Jedidajah Otte

Voters, conservatives and pundits reacted with dismay to Kwarteng’s “fiscal event” last Friday, when he announced the abolition of the top tax rate of 45 percent.

But what do high earners who benefit from the tax cut think of it? We spoke to a few to find out.

“I feel sick and ashamed”

“I’m angry! I grew up in a poor household and I’ve never forgotten it. I’ve worked hard to be a good earner, but that doesn’t mean I think I’m any better than those who aren’t going well. This – at a time when people are already suffering so much. Energy prices. NHS. Education. Transport. All the issues that need urgent attention. Not to mention the lack of legal assistance. The low fees being paid to legal aid practitioners Lack of affordable housing, childcare, etc.

“Truss and Kwarteng seem to have neither understanding nor reason. How can the basics be paid for? How do you think the economy will grow? Why don’t they care about poverty? I feel sick and ashamed. I will give it to charity: to the NSPCC because more children are being neglected, and others. I didn’t ask for it. I do not need it. I don’t want people to think I’d vote for a stunt like that. It’s horrible. I am so sorry for our country. It will be ruined.” Claire, 60, Solicitor from Dorset

“High taxes discourage hard work”

“I think it’s great that the Tories dropped the cap, it felt like Christmas. A 45% tax rate alone is already high, but when you factor in Social Security, council tax, and student loan repayments, it’s one of the heaviest tax burdens in the world. Such a system discourages hard work and financial success, and discourages people from taking business risks that would benefit the economy. At the same time, the efficiency and quality of public services is ridiculously poor. I will invest most of it, spending part on the increased cost of living and use the rest on a new house.”
Patrick, 36, a Risk manager from Surrey

Read more here:

Updated 5/4 EDT

The Green Party is halfway through its annual conference today and Co-Chairman Adrian Ramsay is at the ` Breakfast.

He says the party’s call for a tax on the top 1% of society for a green fund would aim to “make our society more equal”.

Carla Denyer and Adrian Ramsay, co-leaders of the Green Party, during the party conference in Harrogate yesterday. Photo: Ian Forsyth/Getty Images

Under the plans, the country’s richest people would put 1% of their money into a “fund for creating a greener society.”

We demand this in times of economic and political crises.

We have seen economic chaos caused by a mini-budget that has made our society more unequal.

It’s about making our society more equal.

Updated at 3:51 AM EDT

Robert Booth

British households are poised to set fire to their electricity bills later in a wave of cost-of-living protests, coinciding with gas and electricity price increases that are set to send bills skyrocketing.

Organizers are predicting the largest nationwide protests against an economic crisis that has worsened this week with money market chaos and the threat of mortgage rate hikes, dozens of rallies will take place from Plymouth to Aberdeen while postal and railway workers are also on strike.

Among the lighters are supporters of Don’t Pay UK, a grassroots movement that has won nearly 200,000 pledges from households willing to cancel their direct debits unless the government does more to protect the poorest families.

The protests are being coordinated between multiple community organizations and unions to maximize impact.

We will be covering the protests live on this blog later in the day.

PM admits “disturbance” after mini-budget

HarryTaylor

Like the chancellor, the prime minister used a column in the Saturday newspaper to defend the government’s actions.

In the face of heavy criticism, including a scathing rebuke from the IMF, Liz Truss has admitted the mini-budget presented by her government last week caused “disruption” after it was followed by a series of economic shocks, including the pound against the Dollar has fallen to an all-time low.

Truss, writing in the Sun, did not elaborate on the changes to the 45p rate or the removal of the cap on bankers’ bonuses, which was also included in Kwarteng’s announcements. She said:

For too long we have debated how to divide the economic pie, rather than increasing the size of the pie so everyone gets a bigger slice.

The status quo doesn’t work. For too long we have been held back by low growth and high taxes. We need to get things done faster in this country.

So I’ll do things differently. It’s about difficult decisions and short-term disruptions.

Not everyone will like what we are doing, but I want to reassure the public that the government has a clear plan that I believe is right for the country.

On Friday she told the broadcasters:

I know there has been disruption, but it was really, really important that we could help the families as soon as possible.

It is important to me that we get the UK economy back on track, that we keep taxes low, that we encourage investment in our country and that we get through these difficult times.

Updated at 3:32 AM EDT

Kwarteng: I had no other choice

Good morning As the effects of the Chancellor’s mini-budget continue, the pound tumbles and markets falter, Kwasi Kwarteng has tried to defend the government’s course of action.

He wrote in the Daily Telegraph:

The UK taxpayer expects their government to work as efficiently, effectively and as possible and we will deliver on that expectation.

Not all of the measures we announced last week will be universally popular. But we had to do something else.

We had no choice.

His announcements just over a week ago included a cut in income tax from 45p to 40p a pound for the highest earners. Other taxpayers got a 1p cut in income tax and are getting money from a reversal in Social Security increases. The Chancellor said they would all help boost growth.

However, there was a strong market reaction to the package, which resulted in the biggest tax cuts in 50 years. The Bank of England then spent billions of pounds buying government bonds to prop up pension schemes. It has also indicated that interest rates are expected to rise significantly, which has led to jumps in mortgage rates and lenders making many deals.

Responding to the markets’ reaction, Kwarteng added:

Even in the face of extreme volatility in global markets, with major currencies grappling with an incredibly strong US dollar, we will demonstrate to financial markets and investors that our plan is sound, credible and will work towards fueling growth.

Stay with us all day for the latest political news and developments.

Updated at 3:33 AM EDT