Former prime minister Liz Truss is to challenge Rishi Sunak and Jeremy Hunt with her own alternative Budget.
Her proposal will be pitched as one that rails against “conventional thinking”, and will be presented to the government as an alternative to the chancellor’s plans.
The report outlining Truss’s suggestions will be released one week before Hunt delivers his autumn statement on 22 November.
Called the “Growth Budget”, her suggestions are expected to propose similar ideas to those she announced while in office, including tax cuts and changes to corporation tax, income tax and national insurance.
It is also expected to include ideas about how the “tourism tax” could be dropped by bringing back VAT-free shopping.
At the Conservative Party conference this month, Truss made a speech calling for tax cuts to “make Britain grow again”.
Truss told the conference that she wanted to see the Conservative Party become the “party of business again”, and for the government to stop “taxing and banning things” and instead “build things and make things.”
Jeremy Hunt was left squirming on live TV as he was savaged over the Tories’ chaotic record in government.
The chancellor was shown a list of the astonishing number of cabinet jobs given to senior Conservative MPs since the last general election in 2019.
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Nadhim Zahawi tops the lost with an incredible nine positions, while Oliver Dowden and Lucy Frazer have seven each, followed by Dominic Raab and Steve Barclay on six.
Appearing on Sunday Morning With Trevor Phillips on Sky News, Hunt was told: “One cabinet minister who’s not even in the cabinet any more [Zahawi] had nine jobs.
“This is a higher turnover of even a Premier League manager. You and I support the same team, Chelsea. A Chelsea manager feels safer than a cabinet minister.
“This is no way to run a whelk stall, is it, let alone a government?”
Hunt was shown a graphic detailing the astonishing number of ministers since 2019.
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Hunt replied: “We have had turbulence caused by things like the pandemic [and] big changes in our economic model.
“What I would say is that since Rishi Sunak has become prime minister that has changed, and he has made only the most limited changes.
“The most recent change, the defence secretary, was caused by a personal decision by Ben Wallace to step down.
“What Rishi Sunak is interested in is not the personalities, but who is going to get the job done and when people get the job done, he backs them.”
Chancellor Jeremy Hunt will hold a meeting with Britain’s major banks on Friday to discuss how they can help homeowners hit by rising mortgage costs, after saying the government would not offer borrowers significant financial help.
The Bank of England has raised interest rates 12 times since December 2021, but the impact for many mortgage holders is only starting to be felt now as low fixed rates agreed during the Covid-19 pandemic start to expire.
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Some politicians have called on the government to consider financial aid for those worst hit, but Hunt rejected this in a parliamentary question-and-answer session.
“We won’t do anything that would mean we prolonged inflation,” Hunt said when asked about possible aid. “Schemes which involve injecting large amounts of cash into the economy right now will be inflationary.”
Conservative MP Jake Berry asked Jeremy Hunt whether it was time to consider mortgage interest relief at source. Jeremy Hunt also told MPs that he will meet mortgage lenders about what relief they can offer to their customers.https://t.co/MN45tfGyF1pic.twitter.com/T0hlw2V3Sy
The Bank of England is expected to raise interest rates again on Thursday by a quarter point to a 15-year high of 4.75% in a bid to fight unexpectedly sticky inflation, which was running at 8.7% in April. Official inflation data for May will also be published on Wednesday.
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Hunt said he would talk with major lenders later this week to discuss the challenges faced by some borrowers.
Three sources – two from the banking industry and one in the government – said that meeting would take place on Friday and focus on how best to support customers facing big increases in their repayments this year, and those who have refinanced at higher rates and are already struggling to cope.
“I’ll be meeting the principal mortgage lenders to ask what help they can give to people struggling to pay more expensive mortgages and what flexibilities might be possible for families in arrears,” Hunt said.
The 2008 financial crisis did not lead to a big wave of home repossessions in Britain, but lending rules were tightened afterwards to ensure homebuyers taking out mortgages would still be able to cope with a significant rise in interest rates.
However, mortgage rates have risen rapidly in recent weeks as markets bet the BoE may have to raise its own interest rate as high as 6% next year to tackle persistent inflation.
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Trade body UK Finance estimates 800,000 Britons will need to refinance loans in the second half of this year, and a further 1.6 million in 2024.
The Resolution Foundation think-tank estimated that the average homeowner who refinances a mortgage in 2024 will have to pay an extra £2,900 pounds a year.
Most British residential mortgages have interest rates fixed for two or five years, after which borrowers pay a floating rate or switch to a new fixed rate.
Jeremy Hunt has been accused of handing a huge tax cut to the rich by shaking up pension rules.
The chancellor used his first Budget to announce that high-earners will be able to plough more money into their retirement pots without having to pay more money to the taxman.
He said he was increasing the so-called annual tax free allowance from £40,000 to £60,000.
And in a major surprise, he also announced that he was going to abolish the lifetime allowance, which is currently £1 million.
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The changes are aimed at encouraging more over-50s to stay in work rather than retiring to avoid higher tax bills.
Hunt said: “These changes will stop over 80% of NHS doctors from receiving a tax charge, incentivise our most experienced and productive workers to stay in work for longer and simplify our tax system, taking thousands of people out of the complexity of pension tax.”
But Labour pointed out that the tax cut would only benefit the very wealthiest in society.
Responding to the Budget in the Commons, Keir Starmer said: “We needed a fix for doctors, but the announcement today is a huge giveaway to some of the very wealthiest.
“The only permanent tax cut in the budget is for the richest 1%. How can that possibly be a priority for this government?”
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A Labour source told HuffPost UK: “It’s a bad look for your only budget surprise to be a very very big tax break for the very very richest.”
Sharon Graham, general secretary of Unite, said: “Today the Chancellor claimed that this was a budget for growth to benefit Britain. In real terms, it’s tax cuts for the rich and powerful and little reward for workers.
“This economic system is not only broken, it’s rigged and once again workers are paying the price.”
Andrew Harrop, general secretary of the Fabian Society, said: “The chancellor did nothing to put extra money into the pockets of low and middle income households.
“Instead of acting to address the country’s unprecedented cost of living crisis, Mr Hunt instead chose a pension tax giveaway for the wealthy. That will be a bitter pill to swallow for people struggling to feed their families.”
Treasury sources insisted the tax cut was about keeping the “most experienced workers” in the labour market for longer.
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They cited figures from the Royal College of Surgeons that found 70% of respondents reduced their hours due to the government’s current pension tax rules.
Sources said the chancellor did not want the current rules to lead to “fewer doctors” in the labour market and that this was the “quickest and most effective way” of keeping them in the NHS.
Deep Tory splits have burst into the open as pressure mounts on Jeremy Hunt to cut taxes in next month’s budget.
Right-wing backbencher John Redwood today urged the government to “get on with it” and said the majority of Conservative backbenchers agree.
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But development minister Andrew Mitchell said immediate tax cuts were “extremely hard to justify” and backed the chancellor and Rishi Sunak, who have said tax cuts are unaffordable at the moment.
The clash came in the wake of official figures which confirmed the UK economy flatlined in the final three months of 2022.
Hunt will deliver his Budget on March 15, but has repeatedly insisted that inflation must come down before taxes can be cut.
Supporters of former prime minister Liz Truss have formed the Conservative Growth Group to put pressure on the chancellor and PM to change course.
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Redwood, who is a member of the group, said the government should start by cancelling the planned rise in corporation tax – which companies pay on their profits – from 19p to 25p in the pound.
He said: “We want to see sensible, targeted tax cuts that will boost self-employment, boost investment and help solve the problem of recruiting and retaining doctors and other skilled staff, and will add to the idea of growth.
“All the evidence is in the past, when Conservative governments have had the courage to cut corporation tax rates, it raises more money.”
The Wokingham MP also called for VAT to be removed from domestic fuel bills.
He added: “The growth group is gathering strength as we speak. There are dozens of Conservative MPs who take the view that the growth strategy the government has headlined needs some more positive measures behind it.
“I think you’ll find a majority of Conservative backbenchers agree with what I’m saying today – that they want targeted tax cuts and there will be a range of views on which are the best targeted tax cuts to choose.
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“The majority believes that you don’t get growth without more realistic tax levels.
“Many are very worried that Britain is in danger of becoming uncompetitive because of the higher taxes the government is wishing to impose.”
But Andrew Mitchell rejected Redwood’s ideas and said taxes could only come down when the government can afford them.
He said: “In the end, if we make tax cuts which are not properly funded, it’s borrowing and it’s taxation deferred for the next generation. Many of us are very concerned about inter-generational fairness in Britain – the position of our children and our grandchildren.
“So I think tax cuts are very important, but they’ve got to be done at the right time and I think that the philosophy and argument that the Chancellor of the Exchequer has set out is absolutely right.
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“We will get them when we can, but I think at the moment it’s extremely difficult to justify them.”
Matt Hancock is set to end his near seven-week break from parliament when the sitting MP appears in the Commons for the first time since his I’m A Celebrity hiatus.
The former health secretary is scheduled to be back in parliament on Friday to debate his dyslexia bill, on the same day his pandemic journals are serialised in the Daily Mail.
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The ex-minister last spoke in the Commons on October 17, when he welcomed the “return of an iron-clad fiscal responsibility” under new chancellor Jeremy Hunt.
His re-appearance comes as speculation mounts over whether he will have the Tory whip restored and seek to stand again at the next election.
He is currently sitting as the independent MP for West Suffolk, having been suspended from the Conservative parliamentary party for choosing to head to the Australian jungle at a time when the house was sitting.
The MP is expected to tell parliament that the current approach to dyslexia “must change”.
“It is not only an issue of morality, but also of both social and economic justice,” he will say.
Friday’s order paper
UK Parlament
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Hancock, who was diagnosed with dyslexia at university, had vowed to use the “incredible platform” offered by I’m A Celebrity to raise awareness of the learning difficulty.
While his jungle jaunt drew criticism from colleagues, including prime minister Rishi Sunak, Hancock has “no intention of standing down or stepping away from politics”, according to his team.
Tory MPs have been given until Monday December 5 to declare their intention to re-run at the next general election, expected to be in 2024.
The second reading of Hancock’s dyslexia screening and teacher training bill is third on Friday’s order paper, meaning it is likely to be heard before the end of business.
Hancock will tell MPs: “So we rightly screen for physical health conditions to provide the support to individuals, so why don’t we screen for neurological conditions, too?
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“My bill today would result in every child being screened for dyslexia in primary schools and giving teachers the adequate level of training to be able to teach dyslexic children properly.”
He will call it an “outrage” that “while every teacher is a teacher of a dyslexic child, teachers do not need to be trained to support dyslexic children”.
“This leaves thousands of dyslexic children left in the classroom without the education they need and deserve.”
“It is a scandal that only one in every five dyslexic children leave school identified with their dyslexia. That means 80% of dyslexics go on to further education or into the world of work not knowing that they have a neurological condition, but just thinking they are bad at reading.”
As is normal procedure, other MPs can join the debate and representatives for both the government and opposition will have their say.
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Some might take the opportunity to have a dig at Hancock’s TV escapades since it will be their first chance to put their views to him directly in the house.
A Labour MP perfectly summed up the chaos caused by the Tories this year as she grilled Jeremy Hunt.
The chancellor was left squirming as Angela Eagle ran through the astonishing political events of the last 12 months.
Hunt was appearing in front of the Treasury select committee to face questions on last week’s autumn statement, which came just weeks after his predecessor Kwasi Kwarteng’s disastrous mini-budget.
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Hunt unveiled £55 billion of tax rises and spending cuts as he tried to undo the damage caused in part by Kwarteng’s unfunded spending spree, which sent the value of the pound plummeting and interest rates soaring.
Kwarteng was only in the job for six weeks, having been appointed by Liz Truss after she succeeded Boris Johnson as prime minister in September.
Eagle told Hunt: “Chancellor, this year alone your party has given us three prime ministers, four chancellors, four different versions of the Conservative government and six fiscal events.
“One hundred and forty-seven members of the government, including 32 cabinet ministers, have resigned or been sacked.
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“What effect do you think this chaos has had on our economic prospects and our international reputation.”
Angela Eagle: “This year your party has given us 3 PMs, 4 Chancellors, 4 different versions of the Tory govt & 6 fiscal events. 142 members of the govt resigned,including 32 Cabinet ministers.. what effect has this chaos had on our economic prospects & international reputation?” pic.twitter.com/b4iQOs1S3c
In response, the chancellor insisted the UK’s economic woes had been “primarily” caused by the war in Ukraine and the global rise in energy prices.
He said: “I wish we hadn’t had that level of instability, but I produced an autumn statement that is designed to restore economic stability and consistency of economic policymaking and I hope we can turn the page on all that instability.”
The chancellor included almost £25 billion in tax increases in his package to fill the UK’s financial blackhole, with the most well-off taking a hammering.
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The Rishi Sunak administration will fear the comments by Rees-Mogg, the former cabinet minister and low-tax enthusiast, reflects wider concerns from the right of the party over raising taxes as the country is entering a recession.
Rees-Mogg, whose time on the ministerial benches was marked by controversial attempts to reduce the headcount of the civil service, said ministers should be seeking to cut spending through efficiency savings in public services.
He told Channel 4 News: “Taxation has got too high and there are issues with the level of expenditure that we have got.
“I think there is a real problem with fiscal drag bringing more and more people into the 40p (tax) band who, particularly if they are living in the south of England, are not necessarily particularly well-off.
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“That is going to be hard for them paying an extra level of tax on top of what they are already paying.
“Also freezing the basic band is going to be a burden for all taxpayers, even those who are still in receipt of benefit.
“I think we need to look at the efficiency of government to make sure money is well spent before reaching for the easy option of putting up taxes.
“What we actually need to be doing is having a strategy for growth and looking to lower taxes.”
Responding to today’s Autumn Statement, Conservative MP Jacob Rees-Mogg says that “we need to look at the efficiency of government to make sure money is well spent before reaching for the easy option of putting up taxes”. pic.twitter.com/0iQi1JuGFY
Rees-Mogg is a long-standing critic of prime minister Rishi Sunak, having previously described him as a “socialist” over his record of raising taxes when he was chancellor. He quit the cabinet when Sunak became PM
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His comments will cause concern among ministers after another former minister, Esther McVey, warned she could not support tax rises if the government continued to press ahead with the HS2 rail link.
Rees-Mogg insisted however that he still supported the government.
“I am a Conservative member of parliament and I support the leader of the party. We’ve had three leaders in the last few months – it would be ridiculous to have another,” he said.
Hunt has increased the windfall tax on oil and gas giants and reduced the salary threshold at which workers begin paying the 45p top rate of income tax.
Among a string of little-noticed measures, the chancellor also plans a 23% increase in fuel duty, which adds £5.7 billion to his coffers and is the first tax rise of its kind since 2011.
Jeremy Hunt has set out his plans for almost £25 billion in tax increases and more than £30 billion in spending cuts to fill the UK’s financial blackhole – but some measures have received more attention than others.
While increasing the windfall tax on oil and gas giants and reducing the salary threshold at which workers begin paying the 45p top rate of income tax were highlighted by the chancellor, many striking moves were buried within the pages of autumn statement green book. Here are just five:
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1. Fuel duty set to go up by 23% next year.
How motorists will be affected by a budget is typically one of the headline-grabbing announcements, and yet Hunt failed to mention fuel duty.
But based on a forecast from the Office for Budget Responsibility, which combines the forecast for RPI inflation next year and the assumption that the 5p cut to fuel duty will end, the chancellor could hike the tax for the first time since 2011.
As the Office for Budget Responsibility said: “The planned 23% increase in the fuel duty rate in late-March 2023, which adds £5.7 billion to receipts next year.
“This would be a record cash increase, and the first time any government has raised fuel duty rates in cash terms since January 1, 2011.
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“It is expected to raise the price of petrol and diesel by around 12 pence a litre.”
Tory MPs are likely to continue their campaign urging the chancellor to keep prices at the pumps down.
2. Big win for banks.
The tax surcharge on banks is to be slashed to 3% from 8%.
The move aligns with the government’s decision to hike up corporation tax from 19% to 25% from April, which banks pay on top of the surcharge.
It means banks will still be paying a higher rate of tax than they were previously, but by just 1% rather than the 6% that they could have faced had the surcharge stayed the same.
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3. Police and school building cuts.
Home Office spending is set to be slashed by £100m in real-terms by 2024-25, which is likely to affect frontline policing.
And while Hunt said the government will invest an extra £2.3 billion per year in schools, there will be a £1 billion (14%) real-terms cut in capital spending on education in 2024-25 – meaning crumbling schools left in disrepair.
4. Stealth taxes.
The now six-year freeze in income tax thresholds is a favourite “stealth tax” of the government – mainly because it avoids announcing a rise, and it tends to affect money people haven’t yet earned, so are less likely to notice the change.
Thursday’s change means a total of 3.2 million new income taxpayers and 2.6 million more people dragged into the higher 40p tax bracket, according to the OBR.
INCOME TAX
The six year freeze in income tax will drag 3.2million into paying basic rate and 2.6million into paying higher rate
It will take the *real* value of the personal allowance back to 2013-14 levels
The chancellor has said he will cap the increase in social housing rents at a maximum of 7% in 2023/24, saving the average tenant £200 next year. Hunt said that without the cap, families living in the social rented sector could face rent hikes of up to 11%
But with the government refusing to cover the shortfall, social housing providers will have to fill the gap somehow, and could lead to a reduction in investment in properties and building new homes by £630 million over five years.
Good scoop but social rents *could* rise to 7% not definitely *will*. Social landlords will still – I hope – measure affordability. That said, cap is higher than ppl were expecting. Problem is…without social rent it’s difficult to fund social housing without…Govt investment https://t.co/fgZwbxwQU6
Sarah Olney, Treasury spokesperson of the Liberal Democrats, which highlighted many of the little-mentioned changes, said: “Underneath the surface of this terrible ‘cost of chaos’ budget are yet more hidden horrors.
“Everything from police to social housing to our crumbling schools is being left in the dust by this Conservative government.
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“Everyone will be forced to pay for this cost of chaos budget with their public services being slashed more each year.
“Banks are being given a huge tax giveaway while millions are dragged into a higher rate of tax.
“The accumulated impact of these cuts will mean a bleak recession for years to come caused by an out of touch Conservative government.”
(@Haggis_UK) 
