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Evening Standard
Evening Standard
World
Rachael Burford and David Bond

Kwasi Kwarteng bows to pressure and brings forward debt-cutting plan to Oct 31

Kwasi Kwarteng has bowed to pressure and brought forward the publication of a report from the Government’s independent fiscal watchdog.

The Chancellor had previously said the analysis by the Office for Budget Responsibility (OBR) would not be released until November 23, despite it being delivered to the Treasury last week.

It will now be made public on October 31, the Treasury confirmed on Monday morning.

Mr Kwarteng will also set out how he intends to pay for the £43billion of tax cuts announced in his mini-Budget last month.

Mel Stride, Tory Chair of the Treasury Select Committee, welcomed the decision.

He said bringing forward the publication "may result in a smaller rise in interest rates" that is "critical to millions of mortgage holders".

The failure to produce the OBR analysis of his plans, designed to boost the UK’s faltering economic growth, alongside his fiscal statement spooked the markets.

It led to a sharp fall in the value of the pound and a rise in the cost of Government borrowing, which triggered a near meltdown for pension funds.

With restless Tory MPs set to return to Westminster tomorrow, Mr Kwarteng and Prime Minister Liz Truss are launching a charm offensive to shore up her premiership.

Although Ms Truss caved to pressure from Conservative rebels and U-turned over plans to abolish the 45p top tax-rate for the highest earners, she still faces a battle with her own MPs over how her economic plan will be paid for and whether benefits will be uplifted in line with inflation.

Former Chancellor Sajid Javid, whose resignation as Health Secretary helped topple former PM Boris Johnson, told BBC Radio 4’s Today programme that it had been a “very challenging time” for the Government but said he was encouraged that Ms Truss had listened and reversed the tax-cut for those earning £150,000 and over.

A major stumbling block facing the Government is over benefits, Mr Javid also added his voice to growing opposition to proposals to increase payments by less than inflation.

“We’ve obviously taken some blows and it’s been a very challenging time,” he said.

“But what we’ve also seen at the same time is the Government has listened and we saw that with a 45p rate.”

He added: “People are going through incredibly challenging times.

“We can all see that in our community. So I personally believe that benefits must stay in line with inflation.”

Baroness Philippa Stroud, Tory peer and chief executive of the Legatum Institute, said benefit payments must go up in line with inflation rather than earnings as “you don’t build growth on the back of the poor”.

Minister Victoria Prentis stressed that no decision on the uplift had yet been made.

She added that Work and Pensions Secretary Chloe Smith must first consider average wage figures released tomorrow and inflation figures on October 19.

“There isn’t a government position yet and indeed there can’t be,” she told Sky News.

“She can’t do anything until those figures have come and she will then consider how to, if at all, uprate benefits and what figure to choose. She has a very wide discretion to do that. We make a decision and we communicate it usually by the end of November.”

In a move seen as a peace offering to critics who have accused Ms Truss of surrounding herself with allies, the Prime Minister handed a Government job to Chelsea and Fulham MP Greg Hands, who backed her rival Rishi Sunak in the Conservative leadership race.

He replaces Conor Burns, who was sacked from his Trade Minister post on Friday following a serious misconduct complaint made after the Tory Party Conference last weekend.

Mr Burns has vowed to clear his name and said he will “fully co-operate” with a probe into claims of inappropriate behaviour.

Mr Hands’ appointment was notably welcomed by fellow Mr Sunak supporter Grant Shapps, who was said to have been monitoring party unrest behind the scenes.

Ms Prentis told Times Radio: “It was a very public leadership campaign. I now sense that there is a real feeling of the party getting back together.

“We’re back in Westminster tonight and tomorrow. We’ve then got a long term leading up to Christmas, when we will have to do a great deal of detailed policy work, and I think we will put the past behind us and get on with governing.”

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