Monday, January 30

Returned nations demand urgent meeting with Kwarteng | Kwasi Kwarteng

The returned nations have called for an urgent meeting with Kwasi Kwarteng to discuss “reversing the damaging effects of the UK government’s tax proposals”.

The finance ministers of Wales, Scotland and Northern Ireland have written a joint letter calling for the UK government to act now to “restore confidence in our public finances and limit any long-term damage to the economy”.

The letter, from the Scottish deputy prime minister, John Swinney, the Welsh finance minister, Rebecca Evans, and the Northern Irish finance minister Conor Murphy claims Kwarteng’s package is “a huge gamble on public finances and the health of our economy”.

The chancellor’s mini-budget, which introduced tax cuts that will mostly benefit the richest fifth of households, provides “little respite for families who are already facing a winter unable to afford essentials such as food or to heat their homes” and has “sparked economic and financial turmoil”, the letter said.

The returned nations have asked the government to provide further targeted support to help households and small businesses, which they say are “struggling most during the current crisis” and went on to say the most recent budget has put devolved government services at risk.

Highlighting that returned nations “do not have the flexibility or borrowing powers that the UK government has”, the letter claims returned budgets are already “stretched beyond their maximum” meaning that “as responsible governments we are having to make very difficult decisions to balance our budgets” an approach which, the letter says, is “unlikely to be sustainable”.

The letter calls for additional funding that is “urgently” needed and requests that returned nations “see the full forecasts from the Office for Budget Responsibility” as part of an attempt to “reverse the damage these policies are causing”.

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It comes as Kwarteng and Liz Truss doubled down on the policy, with the prime minister admitting there would be disruption but insisting there was a clear plan and the chancellor saying: “We had no other choice.”

On Saturday the Wales secretary, Robert Buckland, said the government was “absolutely committed” to fiscal responsibility, despite the chaos in the financial markets following Kwarteng’s announcement. Buckland said: “We have seen weakness in the pound, the yen, the 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 turbulence.”

He said Kwarteng would set out further details when he published his medium-term fiscal plan on 23 November and that the government’s medium-term plan would “give a high degree of reassurance to markets that, like its predecessors, this government is absolutely committed to fiscal responsibility”.

He added: “There has been turbulence, I am not denying that, but what I am seeing is, as we look more carefully at this package, there is that commitment to bring in the tax yields that we need to pay for our public services and our public spending commitments.”

He said the country needed to “grow the economy to pay for our public services in the future”, adding: “I make no apology for that.”

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