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The Guardian - UK
The Guardian - UK
Politics
Andrew Sparrow

No 10 warns of ‘difficult decisions’ on public spending despite Truss’s vow to avoid cuts – as it happened

Liz Truss Jacob ReesMogg United Kingdom Bank of England United States

Afternoon summary

  • But Truss is under increasing pressure to delay some of the unfunded tax cuts in the mini-budget. The Tory chair of the Commons Treasury committee, Mel Stride, has said Truss’s pledge on public spending today has made this more essential. (See 4.54pm.) And Damien Green, the former first secretary of state, told the PM programme that Tory MPs are discussing the need for a U-turn of this kind. He said:

If you do need some big numbers to change, one of the obvious ways would be possibly to defer some of the tax cuts or the failure to put taxes up and move some of those further to the right-hand side of the column. That would save billions in the early years because I imagine a lot of the changes will have to be in the later years of this five year plan.

Kitty Donaldson from Bloomberg says that in private some Tory MPs are saying a U-turn of this kind is inevitable.

Liz Truss at PMQs today.
Liz Truss at PMQs today. Photograph: Jessica Taylor/UK PARLIAMENT/AFP/Getty Images

Updated

From the polling company Redfield and Wilton Strategies

Updated

Only UK parliament can approve a Scottish independence poll, supreme court told

Judges sitting in the UK’s highest court have been told Westminster is the ultimate authority on Scotland’s future because the issue of Scottish independence is of “critical importance” to the future of the UK. My colleague Severin Carrell has the story here.

Liz Truss was greeted with the customary banging of desks by Tory MPs when she arrived to address the backbench 1922 Committee at Westminster, PA Media reports.

Alicia Kearns elected chair of Commons foreign affairs committee

The Conservative MP Alicia Kearns has been elected as the new chair of the Commons foreign affairs committee. She will replace Tom Tugendhat, who was made security minister when Liz Truss became PM.

Select committee chairs are elected in a ballot of all MPs. This post was set aside for a Conservative, and Kearns beat Richard Graham, Sir Iain Duncan Smith and Liam Fox to secure the post.

In her statement setting out her pitch for the job Kearns, who worked for the Foreign Office before becoming an MP, said that while over the past 20 years “our government has faced threats to our people from terrorists who behave like states … over the next two decades it will need to protect us from states that behave like terrorists.”

Alicia Kearns speaking in the Commons in January.
Alicia Kearns speaking in the Commons in January. Photograph: UK Parliament/Jessica Taylor/PA

PM's public spending pledge means U-turn on mini-budget tax cuts even more essential, says Tory Treasury committee chair

Mel Stride, the Conservative chair of the Commons Treasury committe, says that in the light of what the government has said today about not cutting public spending (see 12.15pm, 1.20pm and 3.55pm), a U-turn on the tax cuts in the mini-budget is even more essential.

Updated

Liz Truss has appointed an MP who backed Rishi Sunak in the Tory leadership contest as her parliamentary private secretary. He’s Marcus Jones, who posted this on Twitter this morning.

Truss was criticised for prioritising loyalty over talent when she appointed ministers to her government. But after the mini-budget backfired, No 10 adopted a new approach and at the weekend a prominent Sunak supporter, Greg Hands, was appointed to fill the vacant international trade minister post created by the sacking of Conor Burns.

Tory MP Kevin Hollinrake says mini-budget tax cuts should be delayed

The Conservative MP Kevin Hollinrake has urged Kwasi Kwarteng, the chancellor, to abandon some aspects of his mini-budget. The tax cuts in it should be delayed, he said.

Speaking on Radio 4’s the World at One, Hollinrake said:

I think it’s better to have looked at this more carefully in the context of what’s happened over the last few weeks and say ‘I think we’ve got some of this wrong and these tax cuts need to be introduced over time’.

Like Mel Stride, another Tory calling for further U-turns on the mini-budget (see 3.03pm), Hollinrake was a supporter of Rishi Sunak in the Tory leadership contest. The pair are also colleagues on the Commons Treasury committee.

Kevin Hollinrake
Kevin Hollinrake. Photograph: UK Parliament/Jessica Taylor/PA

Updated

Charity commission boss defends right of charities to engage in political activity

Charities are free to campaign, engage in political activity and confront power with “uncomfortable truths” in the name of the causes they serve, according to the chair of the Charity Commission, Orlando Fraser.

Fraser’s comment, made in a speech to the commission’s annual public meeting today, came amid attacks by Tory MPs on major nature and conservation charities for their public opposition to government growth plans.

The Daily Telegraph had previewed Fraser’s speech this morning, implying it would be a “warning” to charities like the National Trust and the RSPB not to stray beyond the rules on political campaigning in opposing ministerial plans to rip up environmental protections.

However, Fraser’s speech turned out, among other things, to be an endorsement of the importance and legitimacy of charity campaigning and a firm restatement of charities’ right, within the law, to participate vigorously in political debates.

Charities had a long proud history of pushing for meaningful change, exposing injustices, and giving a voice to the voiceless, he said.

The law is clear that charities are free to campaign and engage in political activity in this way, shining a light on uncomfortable truths, engaging with those in power in the interests of the people and causes they serve.

He added:

The law does not agree with those who say that charities should simply not dabble with in politics at all.

Fraser, who was appointed in April, despite the opposition of MPs on the culture select committee, said at the time he would not allow the charity regulator to be “dragged into media- and government-led culture wars”.

Updated

Liz Truss has spent an hour meeting Conservative peers, the i’s Paul Waugh reports. She is due to meet MPs at the 1922 Committee later.

Why Treasury minister Chris Philp says departmental spending won't be cut in real terms

The Treasury has got back to me to clarify what Chris Philp, the chief secretary to the Treasury, meant when he told MPs earlier that the government is not planning “real-terms cuts”. (See 2.45pm.) He did not misspeak; he meant that spending would keep pace with inflation, not just that it would not be cut in cash terms.

But the Treasury says Philp would have been thinking of the measure used to track inflation in public spending, known as the GDP deflator, not the CPI measure of inflation, which is the one we are most familiar with because it dominates the headlines.

CPI inflation is running at about 10%. The GDP deflator is a lot lower, possibly around 3.7%.

The reason the two figures are so different is that CPI measures what people spend their money on, and the GDP inflator measures what the government spends its money on. Governments buy different sorts of stuff, and they are better placed to negotiate discounts.

In October 2021, at the last spending review, government day-to-day spending was due to rise by 3.3% a year between 2021-22 and 2024-25 in real terms. The GDP deflator inflation for that period was forecast to be 2.3%.

The GDP deflator inflation figure does not get updated every month, like CPI. As the Institute for Fiscal Studies said in a report in August, it was uprated in March this year, with the result that the plans in the spending review were less generous than they appeared at the time. The IFS said:

By March 2022, the OBR was forecasting an average of 2.8% inflation (as measured by the GDP deflator) over the three years (i.e. up by 0.5% a year). Average real-terms funding growth over the spending review period fell as a result from 3.3% to 2.8% (i.e. down by 0.5% a year).

In its August report the IFS said it thought the GDP deflator inflation figure was running 3.7% at that point. It said this meant the plans in the 2021 spending review only amounted to real-terms growth of 1.9%, instead of the 3.3% envisaged in October 2021.

Updated

Tory Treasury committee chair says he thinks further mini-budget U-turns will be necessary

During the UQ Mel Stride, the Conservative MP who chairs the Commons Treasury committee, told Chris Philp that he thought the government would have to abandon more of the tax cuts in the mini-budget. The abolition of the 45% top rate of tax has already been shelved. But Stride told Philp:

The chancellor was quite right to have brought forward the date for the medium-term plan and OBR forecast.

He has, of course, a huge challenge now landing those plans to reassure the markets. He has to get the fiscal rules right, he has to come forward with spending restraint and revenue raisers that are politically deliverable.

Given the huge challenges, there are many – myself included – who believe it is quite possible that he will simply have to come forward with a further rowing back on the tax announcements that he made on 23 September.

Stride asked Philp to confirm that further U-turns of this kind were “still on the table”.

But Philp replied: “There are not any plans to reverse any of the tax measures announced in the growth plan.”

Mel Stride
Mel Stride. Photograph: Jessica Taylor/UK Parliament/AFP/Getty Images

Updated

Chris Philp, the chief secretary to the Treasury, was responding to Labour’s urgent question on the mini-budget. (See 2.34pm) At one point, responding to a question from Labour’s Angela Eagle, he said that, although the government was planning “spending restraint”, it was not planning “real-terms cuts”. He said:

Spending restraint is not the same as real-terms cuts. We do not plan real-term cuts but we do plan iron discipline when it comes to spending restraint.

Given that Kwasi Kwarteng, the chancellor and Philp’s boss, has repeatedly refused to commit the government to increasing departmental budgets in line with inflation (which has risen by more than was expected when those budgets were agreed), it sounded to me as if Philp misspoke and that what he meant was they were not planning cuts in cash terms.

In economics, real terms means allowing for inflation.

I have asked the Treasury for clarification, and I will post the reply when I get it.

UPDATE: The Treasury got back to me, and Philp did not misspeak. See 3.55pm for their explanation.

Updated

Rachel Reeves, the shadow chancellor, used an urgent question in the Commons to urge the government to abandon its mini-budget. She said:

Conservative economic policy has caused mayhem with financial markets, has pushed up mortgage costs and put pension funds in peril. And it’s wiped £300bn off the UK’s stock and bond markets. All directly caused by the choices of this government.

The mini-budget just 19 days ago was a bonfire made up of unfunded tax cuts, excessive borrowing and repeated undermining of economic institutions.

It was built and then set ablaze by a Conservative party totally out of control. Not disruptors, but pyromaniacs. And that fire has now spread.

Updated

The homelessness charity Crisis has welcomed Liz Truss’s confirmation that the government will go ahead with legislation to ban no fault evictions. (See 12.05pm.) Kiran Ramchandani, its director of policy and external affairs, said:

After an anxious 24 hours, renters will be breathing a sigh of relief to hear the prime minister reconfirm the government’s commitment to ending no-fault evictions. No-one should be needlessly evicted from their home as we head into what will be an extremely challenging winter for thousands.

At PMQs Keir Starmer suggested the mini-budget was responsible for some people having to pay an extra £500 a month for their mortgage. It is a claim that Labour has been using for the past week.

Full Fact, the fact checking organisation, claims this figure is misleading. In an analysis it says:

What we do know is that the £500 increase in monthly payments estimated by Labour isn’t solely a consequence of the mini-budget, because much of that increase is due to rates rising before the mini-budget took place.

Labour’s calculations compared monthly repayments under a deal fixed in August 2020 at 1.6%, and a deal with the same terms, but fixed at 5% or 6% now. But rates have been rising steadily since the beginning of 2022—and for the kind of mortgage used in Labour’s example had already reached 3.64% three weeks prior to the mini-budget.

Graham Stuart, the climate minister, told MPs this morning that Labour’s plan to decarbonise the electricity grid by 2030 would lead to blackouts and poverty.

Giving evidence to the Commons environmental audit committee this morning, Stuart said:

It’s always the danger that people try and suggest you should switch over to renewables tomorrow morning and if you don’t, you don’t care about the environment and you’re not committed to net zero.

It’s a transition, that would be a nonsense and it’s one of the problems ... with the Labour party’s pledge [to] total decarbonisation by 2030. Putting the lights out, putting businesses out and putting people into poverty would be the only result that would come from that.

Stuart also defended the government’s decision to grant new licences for oil and gas exploration in the North Sea and lift the ban on fracking. He said this was “good for the environment” as production and usage would still fall and the emissions associated with extracting North Sea oil and gas were lower than those associated with imported hydrocarbons.

Graham Stuart
Graham Stuart Photograph: Anadolu Agency/Getty Images

Updated

Police officers removing glue from the hand of a protester as Insulate Britain activists blocked the road outside the Houses of Parliament today.
Police officers removing glue from the hand of a protester as Insulate Britain activists blocked the road outside the Houses of Parliament today. Photograph: Henry Nicholls/Reuters

No 10 warns government faces 'difficult decisions' about public spending

And here is more from the post-PMQs No 10 briefing.

  • Downing Street said that there would still have to be “difficult decisions” about public spending despite Liz Truss saying she was committed to avoiding spending cuts. The PM’s spokesperson said:

The prime minister was clear that government spending will continue to rise but beyond that it really is for the chancellor to come forward with anything on spending which he will do on the 31 [October].

Asked if the energy support scheme could be used as cover for departmental cuts, the spokesperson said:

We are clear there will need to be difficult decisions to be taken given some of the global challenges we’re facing. I appreciate the interest but I’m not going to get drawn into what those might look like.

  • The spokesperson refused to commit to departmental spending going up in line with inflation.

  • The spokesperson denied a report in the Independent saying the measures in the mini-budget were being reviewed, with a view to being changed or abandoned. Asked if the report was right, the spokesperson replied: “No. We’re working closely with the Treasury but I don’t recognise that report.”

  • The spokesperson said the government was still committed to the mini-budget measures, in particular cutting the basic rate of income tax to 19p in the pound and not increasing corporation, and implementing them on the timescale proposed in the announcement.

  • The spokesperson said the publicity campaign announced by Truss at PMQs (see 12.25pm) would be an expansion of one already in place.

Updated

Starmer says voters will never forgive Tories if they keep defending 'madness' of 'kamikaze budget'

Here is the PA Media story on PMQs.

Voters will not forgive the Conservative party if it continues to “defend” the madness of Liz Truss’s “kamikaze” mini-budget, according to Keir Starmer.

The Labour leader issued the warning to Tory MPs as he accused the prime minister of being “lost in denial” and “ducking responsibility” for the consequences of her government’s economic policies.

Truss said the UK will see “higher growth and lower inflation” as a result of her plan and insisted she will stick to her pledge not to reduce public spending.

She also said Starmer had undergone a “Damascene conversion” to support legislation to repeal a hike in national insurance, although Labour – under his leadership – opposed the increase in the first place.

Starmer in his concluding remarks at prime minister’s questions, asked: “Who voted for this? Not homeowners paying an extra £500 on their mortgages. Who voted for this? Not working people paying for tax cuts to the largest companies. Who voted for this? Not even most of the MPs behind her who know you can’t pay for tax cuts on the never-never. Does she think the public will ever forgive the Conservative party if they keep on defending this madness and go ahead with her kamikaze budget?

Truss replied: “What our budget has delivered is security for families for the next two winters. It’s made sure that we’re going to see higher economic growth, lower inflation and more opportunities. The way we will get our country growing is through more jobs, more growth, more opportunities – not through higher taxes, higher spending and his friends in the unions stopping hard-working people getting to work.”

Updated

Sky’s Beth Rigby says Liz Truss went to the Commons tearoom after PMQs to meet Tory MPs.

Prime ministers normally head to the tearoom when they feel the need to shore up support.

PMQs – snap verdict

Tory MPs will not have found that performance by Liz Truss reassuring. In politics, as in life, to solve a problem you have to at first face up to what it is, and Truss is still for the most part arguing that the problem with interest rates in the UK is primarily or overwhelmingly a global one (it isn’t – see 11.48am) and that the mini-budget was not culpable because primarily it comprised an energy saving package (it did – but it was not that element of the package that alarmed the markets). All politicians use talking points to defend their position, but they only tend to work if they are at least 50% plausible. Truss did not sound quite as detached from reality as Jacob Rees-Mogg did this morning – she refused to endorse what he said – but mostly she was relying on denial, and it is hard to see that persuading anyone.

This meant Starmer had an easy target, and he clobbered her policy position quite effectively. Truss’s attempts to retaliate were relatively feeble. Starmer ridiculed the suggestion that he had had a Damascene conversion on the health and social care levy (which Labour voted against last year, when the Tories were in favour) and he rightly pointed out that he called for an energy price freeze before she did. Most voters can understand why an opposition party might propose a spending commitment for just six months, not two years, and Sajid Javid’s comments this morning (see 11.24am) suggest there may be a lot of Tories who believe Starmer’s version of this policy is more responsible than Truss’s.

The most intriguing line in the Truss/Starmer exchanges came when he asked her if she was still opposed to public spending cuts. For the record, here is the exchange:

Starmer asked:

During her leadership contest the prime minister said, I quote her exactly, ‘I’m very clear, I’m not planning public spending reductions.’ Is she going to stick to that?

And Truss replied:

Absolutely. Look, Mr Speaker, we’re spending almost £1tn on public spending. We were spending £700bn back in 2010. What we will make sure is that over the medium term the debt is falling. We will do that, not by cutting public spending, but by making sure we spend public money well.

Since the Institute for Fiscal Studies said in a report earlier this week that Truss would only be able to keep her tax cuts and have a credible deficit reduction plans if she announced spending cuts with £60bn, at first glance her “no cuts” message sounded like the first shift towards a U-turn.

But that is almost certainly a misreading. The IFS said cuts worth £60bn would be needed by 2026-27. Promising not to cut public spending (the Truss pledge) is not the same as promising to increase it in line with inflation. During the summer, when she made the original comment, Truss may have been anticipating a real-terms cut, if not an actual cut, and the IFS said not keeping up with inflation would feel like a cut. “Keeping to the existing cash spending plans is essentially imposing a rather hidden form of austerity on departments,” it said in its report. And, in the last few minutes, at a lobby briefing, No 10 suggested there might be cuts in specific areas anyway. This is from Adam Bienkov from Byline Times.

The pressure for a U-turn on the mini-budget is still intense. But on the basis of PMQs today, Truss is still in “plough on regardless” mode. It is hard to see it ending well.

Updated

Matt Western (Lab) says we have had five weeks of crisis. The country has been left wanting divorce, he says. Polls show 60% of people want an election. Will Truss call one?

Truss says: “I think the last thing we need is a general election.”

And that’s the end of PMQs.

Sarah Olney (Lib Dem) asks if Truss still backs a third runway at Heathrow. Olney represents Richmond Park in London, where residents are strongly opposed.

Truss says she is in favour. But she wants the air industry to become more environmentally friendly, she says.

Miriam Cates (Con) asks about allegations about the transgender charity Mermaids. She calls for a police investigation.

Truss says these matters should be properly investigated.

Justin Madders (Lab) asks if Kwasi Kwarteng was right to say fracking would not cut energy prices any time soon.

Truss says she is pulling every lever to improve energy security. That includes solar panels “in the right place”, she says.

Updated

Rebecca Pow (Con) asks if the government can promote growth while also supporting farmers to care for the environment.

Truss says Pow did a good job promoting the environment as a minister. She says the government wants to deliver growth in an environmentally friendly way.

Updated

Truss says the government should not be putting up taxes for businesses. If it did, it would raise less revenue, she claims.

Rosie Cooper (Lab) asks Truss to explain how she will ensure that fracking only goes ahead where communities want it.

Truss says fracking will only go ahead “in areas where there is local community support”.

Gagan Mohindra (Con) asks if Truss agrees that only the Conservative party is on the side of enterprise.

Truss says the Tories understand who pays our wages. It is people who go to work. She will be unashamedly pro-growth, she says.

Natalie Elphicke (Con) asks Truss to confirm that she offered joint patrols with the French on French beaches. And will the government agree not to pay the French more until they agree to this?

Truss says she discussed this with President Macron last week. She hopes to get an agreement on this, she says.

Ian Lavery (Lab) says nurses have gone from being seen as heroes to being depicted as villains by this government. He says they deserve a better pay rise.

Truss says nurses do a fantastic job. The pay review body recommended a £1,400 pay rise on average, and that is what the government will deliver, she says.

Truss suggests government will run publicity campaign encouraging people to save energy

Guy Opperman (Con) says too few businesses know about the energy support package for them. He urges the government to publicise it, and also to have an energy saving campaign.

Truss says Opperman is right. The energy secretary is working on a plan to help firms use energy more efficiently, she claims.

Until now No 10 has resisted calls for a campaign of this sort – reportedly because Truss does not believe government should tell people how much energy they should use.

Updated

John McNally (SNP) asks how the government will cope with the increase in homelessness her policies will cause.

Truss says the government has acted decisively to deal with the energy crisis.

Sir Jeffrey Donaldson, the DUP leader, asks Truss to confirm the negotiations with the EU on the Northern Ireland protocol must reflect the aims of the NI protocol bill.

Truss says she wants a negotiated solution. But if they do not get one, they will proceed with the bill.

Angela Richardson (Con) asks Truss to confirm that Tories did not vote to discharge sewage into waterways. She says the opposition should not be repeating this lie.

Truss says the government is committed to clean water. Maximum fines for water companies are being increased 100-fold.

Updated

Ian Blackford, the SNP leader at Westminster, says Truss should give up her plan to save the chancellor by scapegoating the governor of the Bank of England.

Truss says the SNP should contribute to energy security by building power stations in Scotland.

Blackford says many families are worried now not just about heating their homes, but keeping them. He says 100,000 families renew their mortgages every month. The only things growing are mortgages and bills.

Truss says the government has taken action to help people heat their homes.

Interest rates are rising globally, she says. She says they are a matter for the independent Bank of England.

She says economists say growth will be higher as a result of her intervention.

Starmer says people know that you cannot fund tax cuts on the never-never. The public will never forgive the Tories for this madness, he says.

Truss says she is committed to increasing growth.

Truss says she remains committed to not planning public spending reductions

Starmer says freezing energy bills was a Labour idea in the first place.

During the leadership contest Truss said she was not contemplating public spending reductions. Will she stick to that?

“Absolutely,” says Truss.

She says she wants to spend public money well.

Starmer says Labour voted against the national insurance increase in the first place. Truss voted for it. “So who’s doing the U-turn?”

He says she is going ahead with a tax cut for rich businesses that did not even ask for it. Why should working people pick up the bill?

Truss says Starmer is still not saying if he supports the energy price guarantee. It is the biggest part of the mini-budget. Labour’s plan is for six months. What does Starmer think should happen in March?

Starmer asks when Truss will do the right thing and “reverse the kamikaze budget that is causing so much pain”.

Truss says she is “genuinely unclear” as to what Labour’s stance is on the energy price guarantee. It was the biggest part of the mini-budget. Does Labour want to reverse it?

Starmer asks if the PM understands why people facing higher mortgage payments are furious with her.

Truss says people were facing very high energy bills when she came in. The energy package was the biggest part of the mini-budget, she claimed. Labour has refused to back it, she says.

And interest rates are rising globally, she says. She is helping people with lower taxes and with their energy bills.

She claims, in backing the repeal of the health and social care levy last night, Labour had a Damascene conversion.

Updated

Truss refuses to say if Rees-Mogg was right to say mini-budget not to blame for market turmoil

Keir Starmer says Jacob Rees-Mogg argued this morning that the turmoil in the markets has nothing to do with the budget. Does the PM agree?

Truss says she has taken decisive action on energy bills. Her plan would last for two years; Labour’s just six months. And the government is protecting the economy at this very difficult time.

The “protecting the economy” line provokes loud laughter.

Truss says government will go ahead with plans to ban no fault evictions

Graham Stringer (Lab) says spooking the markets and increasing the cost of borrowing was “an act of gross incompetence” rather than an act of malevolence. But shelving plans to ban no-fault evictions would be extreme. Can she assure MPs that they government will go ahead and ban them?

“I can,” says Truss.

Yesterday No 10 would not give that assurance.

Updated

Liz Truss says this Saturday marks the first anniversary of the killing of Sir David Amess. He represented the best of parliament, she says.

Here is the list of MPs asking a question.

PMQs
PMQs Photograph: HoC

Liz Truss has arrived in the chamber. There was some loud cheering – some of it perhaps ironic.

From Sky’s Joe Pike

Insulate Britain protesters are blocking Parliament Square, ITV’s Carl Dinnen reports.

Truss faces MPs at PMQs for first time since mini-budget debacle

Liz Truss will be taking PMQs in about 10 minutes. It is only her second ever PMQs, and her first since the mini-budget triggered alarm in the financial markets and a rise in government borrowing costs, also driving up mortgage costs. It is hard to think of any government announcement in modern times that has backfired so disastrously, so quickly.

As the Economist points out in its editorial, Truss can now either “slash the state, reverse course on tax cuts or carry on as though nothing is really wrong”. None of these options are palatable, but we may get a hint at PMQs as to which of them she will choose.

Economists tell Commons Treasury committee that mini-budget did trigger market turmoil

Economists giving evidence to the Commons Treasury committee have insisted that the mini-budget was a major cause of the turmoil in the financial markets – even though Jacob Rees-Mogg, the business secretary, refused to accept this on the Today programme this morning. (See 9.21am.)

Torsten Bell, chief executive at the Resolution Foundation, told the committee:

Yes, firing Treasury civil servants isn’t a good idea, that hasn’t helped, sidelining your fiscal watchdog hasn’t helped.

But the big picture is that if you spend the summer telling people you are intending to abandon fiscal orthodoxy, if you then announce a package that dumps fiscal orthodoxy, then if you say on Sunday you are going to keep doing it, then I don’t think any of this should be a surprise to any of us that this is where you end up and this is what happens if you aren’t paying attention.

Maybe you could have got away with that in more benign times, it wouldn’t have been a good idea in any times, but you definitely shouldn’t be doing it in the current climate.

It was always going to be hard, but it was exactly because it was always going to be hard that you don’t do this.

And Sanjay Raja, Deutsche Bank’s chief UK economist, told the committee said that, although there was “absolutely a global component” to the problems, there was also an “idiosyncratic UK-specific component”. He said:

You throw on the September 23 event [the mini-budget], you’ve got a sidelined financial watchdog, you’ve got lack of a medium-term fiscal plan, one of the largest unfunded tax cuts we’ve seen since the early 1970s, it was kind of the straw that broke the camel’s back.

At the hearing Labour’s Angela Eagle asked the five economists giving evidence if they thought the turmoil in the markets was a result of the mini-budget. Everyone on the panel, which also included the Institute for Fiscal Studies’ Paul Johnson, and Gemma Tetlow, the chief economist at Institute for Government, nodded.

Liz Truss has been tweeting about the energy prices bill.

Former Tory chancellor Sajid Javid says mini-budget tax cuts went 'way beyond' what was promised, contributing to market turmoil

Sajid Javid, the former Tory chancellor, has been speaking at an event organised by the Legatum Institute thinktank this morning. As Chris Smyth from the Times reports, Javid said the turmoil in the markets was caused by the fact that the tax cuts in the mini-budget went “way beyond” what Liz Truss promised during the leadership campaign, and by the fact that her energy bills bailout was also much bigger than expected.

The government has drawn up a plan to cap the unit cost of gas and electricity for two years. Labour proposed its own plan to freeze energy bills, but it only proposed a commitment for six months.

Lucy Fisher from Times Radio says other Tories share Javid’s concerns on this.

The Democratic Unionist party is to meet the taoiseach (Irish PM) next week as negotiations over the Brexit protocol intensify.

A party delegation headed by leader, Sir Jeffrey Donaldson, will meet Micheál Martin to discuss solutions for breaking the impasse over the Northern Ireland protocol and a pathway for the DUP’s return to Stormont.

The Irish foreign minister, Simon Coveney, is in Belfast today to meet leaders of four other main parties.

Coveney’s visit to Northern Ireland comes just two days after the Northern Ireland minister Steve Baker and the Northern Ireland secretary, Chris Heaton-Harris, held a series of meetings with party leaders and the US state secretary’s policy adviser Derek Chollet. Baker also visited Larne port to see how the Brexit customs and sanitary checks work.

Updated

The Economist says Liz Truss is already finished as prime minister. In a coruscating leader published online yesterday, it says:

Liz Truss is already a historical figure. However long she now lasts in office, she is set to be remembered as the prime minister whose grip on power was the shortest in British political history. Ms Truss entered Downing Street on September 6th. She blew up her own government with a package of unfunded tax cuts and energy-price guarantees on September 23rd. Take away the ten days of mourning after the death of the queen, and she had seven days in control. That is the shelf-life of a lettuce.

Some Tory MPs have been mulling over options for getting rid of Liz Truss as leader, because her mini-budget has been a catastrophe. But the usual problems make this unlikely: not consensus about the best replacement, the fear that party members will mess it up again by voting in another dud, before you even consider the absurdity of trying to change leaders again so soon.

In an interesting article on the party’s dilemma for ConservativeHome, Paul Goodman, the former Tory MP who edits the website, says a new theory is doing the rounds about how the party could install a replacement leader without having to have another membership ballot. He says:

Some Conservative MPs are mulling an arrangement as follows. A new leader cannot be challenged for a year under the 1922 Committee’s rules. The ’22’s Executive meets. It votes to change them. Truss is challenged and faces a confidence vote. She loses it. The Executive then sets a threshold of 100 nominations for the election to replace her – or whatever figure will allow Candidate A to be the only one nominated. He or she then declared leader and there is no membership ballot.

Goodman says he is not convinced of the “practicality or desirability” of this plan, or any of the others that could see Truss replaced without another ballot of party members. But he also says that it is not clear MPs would vote for the spending cuts being considered by Truss and that in that case “the logic of events points to a tussle between the markets and the government over the withdrawal of the entire mini-budget”. If that were to happen, it would leave Truss “a broken shell of a prime minister”, he says.

Here is some reaction from journalists to Jacob Rees-Mogg’s morning interview round.

Paul Waugh from the i points out that Rees-Mogg has created a problem for Liz Truss at PMQs.

Sam Coates from Sky News says Rees-Mogg seemed to be offloading responsibility for the financial turmoil onto the Bank of England.

Most other journalists just focused on how terrible was the impression created by what Rees-Mogg said.

From the Times’ David Aaronovitch

From the former Guardian editor Alan Rusbridger

From the Times’ Sathnam Sanghera

From the former Guardian deputy editor Paul Johnson

From Kevin Schofield from HuffPost UK

From the former Guardian political editor Michael White

If I could find any positive tweets from journalists about Rees-Mogg’s performance, I would include them. But I can’t.

Updated

The Bank of England has issued a statement this morning clarifying its position on ending the gilt-buying programme launched after the mini-budget to stabilise the pension funds industry.

This is a response to the confusion caused by a story in the Financial Times this morning, apparently contradicting what Andrew Bailey, the Bank’s governor, said yesterday. The FT said the Bank had “signalled privately to bankers that it could extend its emergency bond-buying programme past Friday’s deadline, according to people briefed on the discussions, even as governor Andrew Bailey warned pension funds that they ‘have three days left’ before the support ends”.

Updated

And here is Ed Davey, the Lib Dem leader, on the Jacob Rees-Mogg interview round. Davey is a former energy secretary.

Here are two members of the shadow cabinet responding to Jacob Rees-Mogg’s morning interview round. (See 10.09am.)

Pat McFadden, the shadow chief secretary to the Treasury, says the interviews show the government is refusing to accept responsibility for the chaos it has caused.

And Ed Miliband, the shadow climate change secretary, says the government looks “clueless”.

Rees-Mogg suggests BoE more to blame for market turmoil than mini-budget, because it did not raise interest rates enough

Here is a full summary of the lines from Jacob Rees-Mogg’s morning interview round.

  • Rees-Mogg, the business secretary, refused to accept that the mini-budget was the primary cause of the market turmoil in the UK that has led to the Bank of England having to make emergency interventions to rescue pension funds. And he criticised the BBC presenter Mishal Husain for making the link, accusing her of being unprofessional. (See 9.21am.) Rees-Mogg suggested that it was the Bank itself that was mainly to blame, because it did not raise interest rates by as much as necessary in September. He told ITV’s Good Morning Britain:

I would point to the day before, when the monetary policy committee did not put up interest rates as much as the Federal Reserve had. And that was the more profound effect on markets.

That’s an actual price and that was a widening of the differential between the benchmark which is effectively the US, the low-risk investment and the UK.

  • He said he did not think there was a “systemic” problem with the pension funds market. Some pension funds were experiencing difficulties, he said. But pensions were not at risk, he said.

The previous quarters figure showed a contraction, was then revised to show economic growth. So, be very careful about how you interpret figures immediately after they’re released, It’s a small amount of a very large economy, but these figures are notorious for being revised afterwards.

What this is doing is rationalising the market in a way that energy companies have been in favour.

The government has already intervened to affect the gas price. It started at the retail rather than the wholesale level.

Had it done it at the wholesale level, it would have affected these contracts in a similar way.

Therefore, this is just a rationalisation of the position. It is not a windfall tax, it’s clearly not a tax. It’s nothing to do with the profits these companies are making.

  • He said that he had a mortgage himself, and that it has gone up.

  • He played down, but did not deny, reports saying Liz Truss blocked his proposal to launch a public information campaign urging people to save energy. Asked about the story, he said:

I think that rather overstates it. We’ve done a number of things and there is an online advice for households that the government provides.

A lot of this work has actually been done by newspapers. Lots of advice is available to individuals on how they can save money.

Jacob Rees-Mogg.
Jacob Rees-Mogg. Photograph: Isabel Infantes/AFP/Getty Images

Updated

Rees-Mogg refuses to accept mini-budget caused market turmoil, and criticises BBC for saying it did

Good morning. Liz Truss will later today take PMQs for only her second time as prime minister. On her first appearance, four weeks ago, she was praised for being refreshingly direct, answering questions that her predecessor would have swerved. She was also very forthright about her faith in low taxes, and how she believed this was the only route to growth. Today, after a month which has seen successive statements and comments from the government alarm the markets and jink the pounds, we will probably get a much more circumspect Liz Truss.

What will be particularly interesting is whether she gives any indication that she has a strategy to calm the turmoil generated by the mini-budget. It seems unthinkable that she might just abandon all or most of the mini-budget (even thought some experts think this is the only move that would be guaranteed to restore market calm.) But yesterday a senior Tory backbencher proposed exactly that. “Rowing back on tax cuts as a possibility has to be on the table because, if you can’t make the rest of the equation work, then the alternative is to go out with something that the markets are just not going to buy, and that will be a very difficult place,” said Mel Stride, chair of the Commons Treasury committee in an interview.

At her first PMQs Truss said she was opposed to windfall taxes. That may come up today because a plan announced by the government last night to cap the revenue of renewable energy generators is being described by Labour as a windfall tax. The government does not accept this. When Truss announced her energy price guarantee last month, she said she wanted to change the current pricing arrangements that mean prices paid for energy generated from renewables is linked to the price of gas, which has soared. Jacob Rees-Mogg, the business secretary, has been giving interviews morning, and he claimed that to call the new move a windfall tax “is simply mischaracterising what’s being done, and misunderstands how the market works”.

But Rees-Mogg’s most provocative comment came in an interview on the Today programme with Mishal Husain. When she suggested that the serious investor confidence problem in the financial markets was “sparked by the mini-budget”, Rees-Mogg refused to accept that, and even went on to question her professionalism. He said:

Hold on. You suggest something is causal which is a speculation. What has caused the effect in pension funds, because of some quite high-risk but low probability investment strategies, is not necessarily the mini-budget. It could just as easily be the fact that the day before the Bank of England did not raise interest rates as much as the Federal Reserve did, and I think jumping to conclusions about causality is not meeting the BBC’s requirement for impartiality. It is a commentary rather than a factual question.

The problem with this argument is blaming the mini-budget for the turmoil in the UK financial markets, where the cost of borrowing is rising sharply, is not a whacky conspiracy theory, but an explanation accepted by the majority of analysts who understand how the markets work. It is also what the Bank of England thinks, and in a letter to the Commons Treasury committee last week Sir Jon Cunliffe, deputy governor at the Bank, included this chart, indicating that it was the mini-budget (or fiscal event, as it is called in the chart) that was the trigger for the extraordinarily sharp rise in government borrowing costs.

UK, US and eurozone long-dated bond yields
UK, US and eurozone long-dated bond yields. Photograph: Bank of England

I will post more from Rees-Mogg’s interviews soon.

Here is the agenda for the day.

10am: Graham Stuart, the climate minister, gives evidence to the environmental audit committee on energy security.

10.15am: Thinktanks, including the Resolution Foundation and the Institute for Fiscal Studies, give evidence to the Commons Treasury committee about the mini-budget.

10.30am: The supreme court resumes hearing the case brought by the Scottish government as it seeks to establish that its proposed independence referendum would be lawful.

12pm: Liz Truss faces Keir Starmer at PMQs.

5pm: Truss is expected to address the Conservative backbench 1922 Committee in private.

I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.

If you want to attract my attention quickly, it is probably better to use Twitter. I’m on @AndrewSparrow.

Alternatively, you can email me at andrew.sparrow@theguardian.com

Updated

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