Re: Truss’ bombshell admission in the Kuenssberg interview

From a Correspondent:

Just reopen the beds in the Community Hospitals for stepdown care. This would make more beds available in acute Hospitals like the RD&E. Although there is a shortage of nurses, many of whom have left due to unbearable work pressure, it is possible that many would like to work in the more intimate environment or our community hospitals. This is what most people want, and would be a useful step towards care needs. For example, Ottery St. Mary hospital used to have a designated “domestic” room where patients recovering from acute procedures could regain their strength and confidence before returning to independence at home.

“I don’t think there is a way out.”

It’s breathtaking to hear that judgement on Liz Truss’ problems from a seasoned former Conservative when the prime minister has not been in charge for a month.

By Laura Kuenssberg www.bbc.co.uk

But instead of a honeymoon Liz Truss’s first weeks in office have resembled a horror film.

A crash in the pound, since recovered, a crash in the polls and the Bank of England having to pump billions into the markets to stop pensions being wiped out.

Tory MPs tell me about phone calls from constituents who are in tears – fearful of losing their homes or businesses as borrowing costs soar.

And those higher costs – and inflation – will hit the government hard, bringing the prospect of dramatic spending cuts.

So instead of anticipating their new leader taking the stage in triumph at the Conservative Party conference this week, the question many MPs and members of the public are asking is how can Liz Truss – who is on our show this week – get out of this mess?

Does she ditch her plans? Stick firmly to the script? Or muddle through?

First, remember what happened to prompt the last wild week.

The government announced a hugely expensive package to freeze energy prices before following that up with a promise of chunky tax cuts that gave back more money to the wealthiest people in the country.

But what they crucially did not do was show how they planned to pay for it – by refusing to publish an assessment from the Office for Budget Responsibility – which examines the government’s tax and spending plans. And on our programme last week, Chancellor Kwasi Kwarteng suggested there would be more tax cuts to come.

Of course, there’s a healthy political debate about the rights and wrongs of those policies on their own. But what financial markets detest is the notion of spending and borrowing at huge levels without spelling out how and when the bills will be paid.

As one weary sounding Tory MP put it: “The problem wasn’t the numbers, it was that there weren’t any.”

It’s perfectly normal for governments to borrow billions of pounds from the markets but the reaction last week suggested the City had precious little faith that the government’s plans added up.

That’s toxic, because without that confidence, it makes it more expensive for the government to borrow the cash it needs. That makes the cost of loans and mortgages go up for everyone and could mean less money for public services too.

One party insider says that the hit to the Tories’ reputation for running the economy could have “all the hallmarks of a generation-defining setback”.

But all the signs are that the prime minister has zero intention of shifting an inch on this. Here’s what her supporters have told me:

• One cabinet minister: “They have to stick to it now – the idea there can be a volte-face, forget it”
• A minister: “She’s trying to change the direction of the country – the issues are the day to day handling of the politics”
• A Truss backer: “‘What’s happening is a political loss of nerve – it’s entirely within our gift to recover it”

Yet No 10 faces a double nightmare of trying to recover economic and political credibility at the same time. Can they really do nothing?

The head of a large foreign investor said the UK was now “uninvestable”. Trying to keep calm (ish) and carry on just may not be possible.

The pound has recovered much of its losses but it seems a tall order for confidence to bounce back in the same way.

The last week suggests there are serious doubts about the chancellor’s strategy. As one senior investor told me: “I don’t know a single person in the City who thinks he knows what he is doing.”

Politicians I’ve spoken to – fans of the new government or not – suggest moving Mr Kwarteng would be “cowardly” or “wouldn’t make a difference”.

Liz Truss is politically close to her chancellor and a major move like that could cause even more instability. But there is no doubt that No 11’s authority is part of the problem.

A source close to Mr Kwarteng says “we make no apology for reversing an unsustainable high tax path”. But a cabinet minister told me while there’s no chance of an exit now “history shows that chancellors who have moments like this don’t necessarily survive in the medium to long-term”.

While it’s clear neither No 10 nor No 11 will consider a change of approach right now their own party may force them to make some changes so they can muddle through.

First off, there is a rising hunger for ministers to bring forward their full plans for the economy, including spelling out the costs and consequences of their spending.

As things stand No 10 is adamant this won’t be until 23 November. But plenty of backbenchers want it brought forward. One minister suggested the government will have to budge before November, saying: “Give the markets what they want with some more detailed forecasts and some attempt to show that this will work.”

There’s a thirst too to bring forward announcements of the other changes the government wants to make to get the economy going. One senior MP said the chancellor has a chance this week to talk about his “big productivity plans” to show “it’s a wider package, not just tax cuts”.

But the government may yet have to ditch some of its ideas. “They’ll have to walk back some of the things that have caused the most offence,” says an MP.

This could be scrapping the 45% top tax rate which I’m told the whole cabinet was not consulted on and which raised the most eyebrows in the mini-budget.

And it’s clear many Conservative MPs would be reluctant to back it, with one telling me: “If there is a vote on 45p or bankers’ bonuses I won’t vote for them, and neither will colleagues.”

There is growing unease too about the costs and implications of the decisions that have already been made for public spending, and specifically about the possibility of going back on Boris Johnson’s promise that benefits would rise in line with inflation.

One former minister told me the idea was “stupidity squared” because cutting tax for the best-off while giving those on benefits a real-terms cut is a total political non-starter.

Another senior figure predicts a classic climbdown where the government will stick to cutting the basic rate of tax with the classic promise to “consult” on the more controversial elements.

But what if Ms Truss can’t or won’t budge’?

Several MPs say one approach to get the government’s attention would be a kind of strike. They could make it plain the government doesn’t have backbench support by not turning up in the Commons.

But others are already contemplating even more. Extraordinary as it is to say this so soon into a new leader’s tenure, there are already conversations in the party about taking the ultimate action. In other words, if the PM won’t change her plans, her party might have to change her job.

One MP told me baldly in the last week: “They have lost the privilege of governing – I’m going to try and get rid of her.”

A former minister said there was a lot of “bluster and chest-beating” going and talk of removing the PM was “hysteria”, but added: ‘Four weeks of polls like this and we might move.”

Crazy? Perhaps. Wild talk in Westminster is often subdued by inertia. Things change quickly. There are many Conservatives who believe Liz Truss’ plans are an important and badly needed reset.

But if the Tories carry on being battered in the polls, and the market turmoil continues for weeks, all bets could be off.

And if it becomes a question of personal survival, arguably Liz Truss may not have helped her case by giving all the plum jobs to MPs who backed her in the leadership contest.

Remember she wasn’t the favourite choice of MPs to start with. As one senior figure reflects: “There is already a cohort of people who are saying ‘this is nothing to do with us’.”

Liz Truss has a huge chance in Birmingham this week to calm her party, the country and the financial markets, as well as explaining more clearly what she is trying to achieve.

And while there is no remote sense she will backtrack on her ambitions, these first steps in power have created serious doubts in her party, and among the public, about whether she has the right ideas and the backing to make radical changes to the country. Downing Street could very, very quickly become a lonely place.

 

“The downscaling of Covid testing laboratories since the unveiling of the government’s Living with Covid plan means the UK is “blind” to the behaviour of new potential variants of concern. Major NHS “Lighthouse” labs closed earlier this year in line with the government’s policy on the infection.”

Thomas Kingsley www.independent.co.uk

The UK is heading into a “devastating” Covid wave this autumn exacerbated by a drop in testing and inadequate surveillance of new immune-evasive subvariants, experts have warned.

Covid-19 infections in the UK have risen 14 per cent, according to the latest figures.

Some 1.1 million people in private households tested positive for coronavirus in the latest survey, which covers the seven days to 17 September in England and the week to 20 September in the other three nations, according to the Office for National Statistics (ONS).

It is the first time the UK-wide total has been above one million since late August, though it is still some way below the 3.8 million weekly infections in early July at the peak of the wave caused by the Omicron BA.4 and BA.5 subvariants of the virus.

Professor Tim Spector, co-founder of the Covid ZOE app, told The Independent the UK was already at the start of the next wave of coronavirus.

“It looks like we’re in the start of the next wave and this time it’s affected older people slightly earlier than the last wave,” Prof Spector said.

He added: “Many people are still using the government guidelines about symptoms which are wrong. At the moment, Covid starts in two-thirds of people with a soar throat. Fever and loss of smell are really rare now – so many old people may not think they’ve got Covid.

“They’d say it’s a cold and not be tested.”

Prof Spector said early data showed new subvariants of Omicron were becoming immune-evasive and could cause the UK “real problems” as winter approaches with the NHS “already on its knees”.

University of Warwick virologist, Professor Lawrence Young, said two Omicron subvariants – BA.2.75.2 derived from BA.2, and BQ1.1 derived from BA.5 – were causing concern in early data and showing signs of being able to escape the immune system.

“What’s interesting about these variants is that although they’re slightly different in how they’ve come about they’ve come up with the same changes to get around the body’s immune system,” Prof Young told The Independent.

“What we’re finding is the virus is evolving around the immunity that’s been built up through vaccines and countless infections people have had.”

He added: “The biggest concern we’re seeing is that in early data these variants are starting to cause a slight increase in infections. In a way, this was to be expected but it does demonstrate that we’re not out of the woods yet at all with this virus, sadly.”

Prof Young also warned that the downscaling of Covid testing laboratories since the unveiling of the government’s Living with Covid plan means the UK is “blind” to the behaviour of new potential variants of concern. Major NHS “Lighthouse” labs closed earlier this year in line with the government’s policy on the infection.

“We’ve really taken our eye off the ball with Covid tests,” he said. “We can only detect variants or know what’s coming by doing sequencing from PCR testing, and that’s not going on anywhere near the extent it was a year ago.

“People are going to get various infections over the winter but won’t know what they are because free tests aren’t available – it’s going to be a problem. Another angle is the economic pressure. If people do feel poorly they’re not likely to take time off work. You have a perfect storm here, really, of inadequate surveillance, people not coming forward for vaccination and the economic situation.”

Both professors called for stronger and more proactive messaging from the government ahead of the colder winter weather, while Prof Young called for the return of mask wearing in poorly ventilated and crowded indoor spaces.

Additionally, public health experts have called for booster jab uptake to increase, with Prof Young noting that new bivalent Covid vaccine boosters, which tackle more than one variant, were key to preventing a devastating wave. But he conceded that there were still question marks around how effective the immunisation would be in keeping vulnerable people from becoming very sick.

Immunologist Professor Denis Kinane, who founded Covid testing firm Cignpost Diagnostic, also raised concerns about the lack of free testing and surveillance of new variants.

“While cases are currently on their way up, we do not yet know the full extent of what is coming in autumn and winter. However, with mass-participation events like the football World Cup taking place in November, international travel growing rapidly, differing vaccination levels across the world, and with most countries having relaxed entry requirements, a rise in cases and emergence of newer variants cannot be ruled out,” Prof Kinane told The Independent.

Sarah Crofts, ONS deputy director for the Covid-19 infection survey, said it was “too early to identify whether this is the start of a new wave”.

Dr Mary Ramsay, director of public health programmes at the UK Health Security Agency (UKHSA), said it was “clear now that we are seeing an increase” in levels of Covid-19.

“Cases have started to climb and hospitalisations are increasing in the oldest age groups. In the coming weeks, we expect a double threat of low immunity and widely circulating flu and Covid-19, creating an unpredictable winter and additional pressure on health services,” she added.

The number of people in hospital with coronavirus throughout 2022 has remained well below levels seen in 2020 and early 2021, before the rollout of vaccines.

Kwasi Kwarteng reportedly attended a private champagne reception with hedge fund managers at the home of a Conservative donor on the same day he delivered his mini-budget.

Nadeem Badshah www.theguardian.com 

The chancellor is alleged to have given guests information about forthcoming government spending cuts during the event at the west London home of Andrew Law, a financier, on the evening of Friday 23 September.

Kwarteng’s mini-budget earlier in the day, which introduced a £45bn package of tax cuts that will mostly benefit the richest fifth of households, triggered economic turmoil – with sterling collapsing to its lowest level since 1985 and the Bank of England acting to save pension funds.

The Labour leader, Keir Starmer, has called for the recall of parliament to address the financial crisis.

The chancellor is said to have told attenders at the reception of austerity-style budget cuts to come while guests drank wine, champagne and cocktails as they congratulated him on the measures announced in the House of Commons, according to the Sunday Times.

A source told the newspaper: “He wanted to give an unadulterated message of ‘growth, growth, growth’ and that’s why he didn’t talk about savings, because otherwise the [news] agenda would have been all about savings – ‘where will you cut? What will you cut? Blah blah blah’ – they’re fully aware they have to make savings.”

Two sources said Kwarteng described that day as a “great day for freedom”.

Another said guests told Kwarteng to “double down” – an approach from which some stood to make profits.

Tory officials told the Sunday Times that Kwarteng attended the gathering at Law’s home, which was arranged by the Conservative party’s campaign headquarters, for an hour to talk through his mini-budget plans and gave a five-minute speech.

The Liberal Democrat Treasury spokeswoman, Sarah Olney, said: “While struggling homeowners saw their mortgage bills spiral, it seems the chancellor was sipping champagne with hedge fund managers profiting from the falling pound.

“How out of touch can you get? We need an official inquiry into this now.”

A source close to the chancellor said: “Any suggestion attendees had access to privileged information is total nonsense.

“The growth plan [published earlier that day] included a commitment to review our tax code to make it simpler, better for families and more pro-growth. The government’s ambitions on lowering the tax burden are hardly a state secret.”

Kwarteng has said he will set out further details of his economic strategy when he publishes his medium-term fiscal plan on 23 November.

But the Treasury select committee, made up of MPs from all parties, has demanded that the chancellor release a full economic forecast from the Office for Budget Responsibility by the end of October.

The Treasury has been approached for comment.

Downhill from now on? -Owl

Richard Foord, Liberal Democrat MP for Tiverton & Honiton, has blamed the Government’s mini-budget for the predicted rise in interest rates. 

Adam Manning www.midweekherald.co.uk 

Following the chancellor’s budget, 26,288 mortgage borrowers across East Devon & Mid Devon are expected to be hit by a “monster” mortgage rate over the coming months, new analysis by the Liberal Democrats has revealed. Almost 1-in-4 homes across East & Mid Devon are owned with a mortgage.

The fallout from last week’s budget is predicted to force the Bank of England to raise interest rates to as much as 5% next year, costing the average mortgage borrower on a Standard Variable Rate a staggering £2,100 per year. 

Those on an average tracker mortgage would face an even higher annual increase of £3,000 per year if interest rates rise to the predicted 5% next year. This would more than wipe out the government’s assistance on energy bills for average households. 

The Liberal Democrats are calling on Liz Truss to recall Parliament and amend the budget which has crashed the pound and seen the national debt skyrocket, as well as leading to predicted rises in mortgage interest rates. 

Commenting on the situation Richard Foord MP said: “Local homeowners have been betrayed by this out of touch Conservative Government. 

“In her first budget as Prime Minister, Liz Truss has chosen to prioritise unfunded tax cuts for big banks and the wealthy, which have sent the financial markets into turmoil.

“It is now mortgage payers across our part of Devon who are left to pick up the tab.

“People across our communities are telling me that they are really frightened by this upcoming interest rate rise. Many simply don’t know how they’ll afford to pay thousands of pounds more a year, especially in the midst of a cost of living crisis. 

“Liz Truss owes local people an apology for this shambolic budget and must recall Parliament to fix this budget before things spiral even more. This government’s experiment has clearly failed, and people across Devon are paying the price.”

The Lizz Truss Dizzee Rascal mashup – Once heard, you wont get it out of your head!

Today (Saturday) is a historic day for beavers in England as they are now recognised as a native and protected species.

Remember that in 2014 it was only public outcry that stopped the culling of the colony of Beavers that had become established in the Otter. – Owl

Lisa Young www.southwestfarmer.co.uk

The new law, that came into force at midnight on October 1, is good news for this mammal which can do so much to restore wetlands across Britain.

Protected status will make it an offence to harm beavers or their habitat without a license.

Classification as a native species means that measures previously available to ‘control’ beavers as a non-native species will no longer apply.

The Wildlife Trusts pioneered the reintroduction of beavers. They are now calling for greater clarity and urgency from the government in relation to the plans for the widespread return of the animals.

The government published guidance in early September which outlines how beavers might be managed in the future.

However, both Beaver Trust and The Wildlife Trusts are concerned that it does not give sufficient support to landowners – and that the proposals lack ambition and detail.

The charities warn that, in their current form, the plans will not deliver the widespread reintroduction of a species which scientific studies have shown can improve water quality in rivers, stabilise water flows during times of drought and flood, store carbon and boost other wildlife.

Harry Barton, Devon Wildlife Trust’s chief executive, said: “A summer of record-breaking heat and drought has highlighted the urgency of making our landscapes more resilient to the unfolding climate emergency.

“Beavers have created green oases in our parched river valleys, because of their ability to store water through dam building and wetland creation. And we know they can reduce peak flows in times of flood and help improve water quality.

“The government’s recent announcements on protection for beavers and their management are good news, but they lack clarity and a sense of urgency. We need a clear plan and timetable so these amazing animals can become part of the wildlife of rivers throughout England.”

In 2015 Devon Wildlife Trust led a successful trial on the River Otter in Devon where England’s first wild population of beavers were reintroduced – 400 years after their extinction due to hunting and habitat loss.

This trial was a great success and the government subsequently agreed that the beavers on the River Otter could remain in the wild and spread naturally to other rivers.

Sandra King, chief executive of Beaver Trust, said: “It remains urgent and vital that the government delivers a clear, ambitious policy and licensing guidance to support beaver restoration in the wild.

“At the end of the day, if we are to welcome beavers back as a native animal our primary objective must be to target positive coexistence with beavers. A properly resourced, forward looking strategy will enable land managers and communities to do this.”

The charities have written to Ranil Jayawardena, Secretary of State for Environment, Food and Rural Affairs.