As  the markets give the thumbs down with the pound plunging and the costs of government borrowing increasing……the Tories really look to be on course to crash the economy – Owl

Mini-Budget response –  Institute for Fiscal Studies

Paul Johnson, IFS Director, said

“Today, the Chancellor announced the biggest package of tax cuts in 50 years without even a semblance of an effort to make the public finance numbers add up. Instead, the plan seems to be to borrow large sums at increasingly expensive rates, put government debt on an unsustainable rising path, and hope that we get better growth. This marks such a dramatic change in the direction of economic policy-making that some of the longer-serving cabinet ministers might be worried about getting whiplash.

Mr Kwarteng has shown himself willing to gamble with fiscal sustainability in order to push through these huge tax cuts. He is willing to shrug off the risks of inflation, and to invite significantly higher interest rates. And he has avoided scrutiny by presenting a Budget in all but name without accompanying forecasts from the Office for Budget Responsibility.

Injecting demand into this high-inflation economy leaves the government pulling in the exact opposite direction to the Bank of England, who are likely to raise rates in response. Early signs are that the markets – who will have to lend the money required to plug the gap in the government’s fiscal plans – aren’t impressed. This is worrying. Government borrowing is set on an upward path. It will reach its third-highest peak since the war, and remain at well over £100 billion, even once the energy support package is withdrawn.

And we heard nothing on public spending. It seems almost inconceivable that plans made last year, when inflation was expected to peak around 3%, will not need topping up at some point, unless the government is willing to allow a (further) deterioration in the range and quality of public services. Presumably this government would borrow for that also. 

Mr Kwarteng is not just gambling on a new strategy, he is betting the house.”

Go to ifs.org.uk to read the full article which includes penetrating analyses of each policy announced. Here are a couple of examples:

Income tax and National Insurance contributions

…. Only those with incomes over at least £155,000 will be net beneficiaries. They gain from the abolition of the additional rate, and are unaffected by freezing the personal allowance because their incomes are too high to be eligible for one anyway. This is quite a different picture from that before the mini-Budget, which implied larger tax rises across the board, but especially so for higher earners.

Taken together, today’s measures undo much of the tax rises introduced by Johnson and Sunak, and undo all of them for the highest-income households. The losses for middle- and higher-income households from previously introduced policies will be roughly halved by today’s measures. The richest tenth of households, who were set to lose around £3,500 a year (3%) on average in 2025-26 under Johnson and Sunak’s plans, will now gain around £700 a year (1%) on average.

Investment Zones

The government intends to create new Investment Zones getting special treatment for tax, regulation and local governance. The full details, and therefore the cost, have not yet been confirmed.

Tax sites within the new Investment Zones will offer a raft of temporary business tax reliefs similar to those available in Freeports, but even more generous and for ten years rather than five. These tax breaks are likely to increase economic activity in these areas, but some of that would otherwise have happened elsewhere in the UK.

This raises the question of why it is better to have lower taxes in some parts of the country than others – encouraging people and businesses to move to the favoured areas – rather than spending the same money on (smaller) tax cuts spread evenly across the country: for example, whether it is intended to help ‘level up’ deprived areas and, if so, whether the areas and policies chosen are appropriate for that objective.

Since the tax breaks are temporary, another question is how much businesses will find it worth making long-term investments that will tie them into the area for longer than that – and, correspondingly, how much the economic benefits to favoured areas will persist after the tax breaks expire.

The most optimistic person in the room is Liz Truss, who is sure that Trussonomics is the path forward. “Lower taxes lead to economic growth, there’s no doubt in my mind about that,” she told reporters this week.

But there was no doubt in her mind when she joined the Lib Dems either, or when she called for the monarchy to be abolished, or when she campaigned for Remain.

Is having politicians who go balls-deep on their ideologies, then U-turn and go balls-deep on something else such a great idea? 

(From London Playbook Politico)

Get beyond the inevitable photo of Ms Hernandez with the new Chief Constable to read the questions raised by councillors, other than Conservatives, including from Paul Arnott. – Owl

Devon and Cornwall Police’s new chief constable was quizzed on how he plans to tackle hate crime, community policing and violence against women and girls before being formally approved for the role. 

Philip Churm, local democracy reporter www.radioexe.co.uk

Chief Constable Will Kerr with Alison Hernandez (courtesy: Office of Police and Crime Commissioner)

At a confirmation hearing of the Devon and Cornwall police and crime panel in Plymouth on Wednesday (21 September) Will Kerr OBE, a deputy chief constable in Scotland was endorsed as the region’s new chief constable.  

His appointment follows the retirement of Shaun Sawyer last month who had been in the role for more than a decade. 

Police and crime commissioner Alison Hernandez announced at the beginning of the month that DCC Kerr was her preferred candidate for the job, describing him as “an exceptional strategic leader” – but the police and crime panel is required to approve her decision. 

Panel member and Conservative councillor for Woolwell, Nicky Hopwood, urged the new chief constable not to ignore smaller communities 

“Although you’ve invited people from the cities, we are covered in towns and parishes through Devon and Cornwall,” she said.

“So, can I have assurance that the towns and parishes will be equally as well looked after as the cities?”

DCC Kerr pointed to his experience of working with rural communities in Scotland. 

He said: “I am responsible for local policing across the whole of Scotland at the moment and as I’m sure most of you are aware, outside the central belt between Glasgow and Edinburgh, most of Scotland is rural and isolated. 

“It’s a third of the landmass of the United Kingdom and 60 per cent of the coastline. It’s got 90 inhabited islands and quite a few of those have very specific needs, which means that they need a very specific and a very sensitive policing response, which is locally-based, locally respected and recognised and locally present.”

Panel member and Labour councillor for St. Peter & the Waterfront in Plymouth, Chris Penberthy, asked about the rise in hate crime in Devon and Cornwall, in the forms of racism, homophobia and misogyny.  

“Hate crime continues to rise, especially hate crime that is sex or gender-related and that is worrying,” said Cllr Penberthy.

“I just wondered whether you had any thoughts specifically about policing within those protected characteristic communities and your approaches there.”

DCC Kerr insisted he would address the concerns of all communities and explained: “The job of policing is to continue to build trust and confidence in those communities and lifestyle communities who perhaps haven’t had as much trust in the police service in the past to make sure that we continue to get a more realistic reflection of where [hate crime] is happening, both physically within communities and on the streets and increasingly online, which is where the biggest growth of hate crime tends to be.”

Labour councillor for St Thomas in Exeter, Laura Wright, spoke about initiatives with the University of Exeter to help young women feel secure and suggested many women do not feel confident approaching police.

She hinted at the Met’s handling of the case of Sarah Everard’s – who was killed by serving officer Wayne Couzens – and later the conviction of two of his colleagues over racist, misogynist, sexist, homophobic and Islamophobic messages shared in a WhatsApp group with Couzens. 

“What’s your take on making sure that the public have every confidence in our police force here?” asked Cllr Wright. 

DCC Kerr said it was crucially important to restore trust. 

He said: “If women and girls didn’t feel confident in the presence of, or in engaging with, police officers on the street, then our responsibility was to do something about that, not to tell people to wave a bus down, not to tell people to do something that was impractical or give a sense that the victim or somebody who’s scared and on the street might be in some way responsible for what has happened.”

A question was also asked about political impartiality.  East Devon council leader Paul Arnott (Democratic Alliance Group, Coly Valley) highlighted the chief constable’s appointment by Tory commissioner Alison Hernandez and said: “What will you do if you find you have to conduct an investigation in which actions of that political party in Devon and Cornwall come into question?”

DCC Kerr offered reassurance and said he would remain completely independent of political groups: “Please don’t labour under any worry or misapprehension that after 33 years in policing and having worked for 26, 27 years in Belfast, I absolutely understand what the boundary lines are. 

“I will not hesitate to take whatever action the policing needs to take to protect the integrity of the rule of law.”

After his appointment to the role DCC Kerr said: “I am delighted to have been appointed by the police and crime commissioner as chief constable of Devon and Cornwall Police.  

“This is a force with an impressive and proud heritage, and a policing style rightly grounded in neighbourhood policing and on local community needs.  

“I have already been impressed by the excellent work that goes on every day and I look forward to meeting the diverse communities living in this fantastic part of the country. It will be a privilege to serve as your chief constable, and I’m very much looking forward to starting in this role.”

DCC Kerr spent over 27 years in the Police Service of Northern Ireland and joined the National Crime Agency (NCA) on secondment in 2017. He was awarded an OBE in 2015 and joined Police Scotland in 2018.

He is a member of the Justice Board for Scotland, a member of the Sentencing Council for Scotland (a Ministerial appointment) and was elected as the UK’s delegate to Interpol’s executive committee.

A new map shows how key landmarks on the Devon coast face being swamped by tidal surges due to rising sea levels caused by global warming. Scientists say the rate of rise is increasing, with levels forecast to be around 35cm higher by 2050 and 1m by the end of the century.

Edward Oldfield www.devonlive.com

An interactive online map produced by Climate Central shows the land at risk from storm surges without sea defences. In south Devon, the modelling for a 1m rise shows parts of Paignton seafront under water, along with land alongside the River Exe Estuary including most of the sand bar at Dawlish Warren. In North Devon, the waters would cover low-lying land on the estuaries of the Taw and Torridge rivers, including parts of Braunton Burrows and Westward Ho! Beach.

Sea levels have risen by around 16.5cm (6.5ins) since 1900, but the Met Office says the rate of rise is increasing and now stands at between 3mm and 5.2mm a year – more than double the rate in the early part of last century. This is exposing more parts of the coast to powerful storm surges and winds, damaging the environment and homes.

Scientists say average global temperatures are rising due to the effect of man-made greenhouse gases including carbon dioxide emitted by burning fossil fuels. That is causing the water in the seas to expand and polar ice to melt, increasing the volume of the seas. The temperature rise is said to be contributing to more extreme weather, with heavier rain and fiercer storms, causing an increased risk of river flooding and land being inundated.

In March 2018, low-lying land on the seafront at Paignton was flooded by a storm surge and the main A379 was partly washed away at Slapton in the South Hams. In 2014, there was a major breach of the railway line at Dawlish in 2014 when part of the Victorian sea wall was washed away.

Map showing the effect of a 1m rise in the sea level in North Devon (Image: Climate Central)

Around 500,000 homes around the UK will be at risk from flooding, scientists say. An estimate of nearly 200,000 homes and businesses at risk of abandonment around the coast has been made by researchers at the Tyndall Centre, in the University of East Anglia, in data published in June.

The government is funding a series of schemes across Devon as part of a new £5.2billion six-year programme of investment in flood and coastal defences announced in July to protect the most at-risk properties, doubling the amount spent in the previous six years.

Map showing the effect of a 1m rise in the sea level at Paignton (Image: Climate Central)

Plans are being prepared for a new 1m high flood wall to run the length of the seafront at Paignton. Without the scheme, more than 350 homes would be at risk from flooding, with sea water forecast to sweep in through the town centre and across the railway line as far as Hyde Road.

At Exmouth, a £12m scheme has improved defences on the Exe estuary and seafront against tidal flooding, to protect more than 1,400 homes and 400 businesses. In Exeter, a £32m scheme to improve defences alongside the Exe protects more than 3,000 homes and businesses.

In East Devon, a £15m scheme is being carried out to restore the flood plain of the River Otter, allowing reclaimed land to be flooded rather than try to hold back rising sea levels.

Map showing the effect of a 1m rise in the sea level at Dawlish Warren (Image: Climate Central)

The government has set out a strategy to reach Net Zero by 2050 – the point when the output of greenhouse gases responsible for global warming like carbon dioxide is reduced and equals the measures to take them out of the atmosphere.

Low-lying areas of the Devon coast are particularly at risk from tidal flooding, and an increase in storms from climate change could also speed up erosion. Changing weather patterns are seeing more rainfall, which increases the flood risk from rivers.

This summer the UK has recorded its highest ever temperature after the Met Office issued a red warning for heat and thermometers topped 40C in Lincolnshire.

No this Conservative MP is not Simon Jupp (he’s focussed on the hospitality sector). – Owl

Lewis Clarke www.devonlive.com 

Calls have been made for the reintroduction of the Coastal Communities Fund. During a debate on Coastal Communities on September 8, Selaine Saxby MP called for the reinstatement of the dedicated Coastal Communities Fund and in the Minister’s response, referring to the ‘alphabet soup’ of funding streams and the fact the Coastal Communities Fund has now closed she stated:

Minister, Lia Nici, said: “With regard to other funding streams and the success of the Coastal Communities Fund, it is right that we now focus our regeneration efforts around coastal communities through our larger and more expansive programmes as part of a more joined-up approach to levelling up. As we have heard from many Members today, the Department for Levelling Up, Housing and Communities is not the only Department touched by coastal communities.

“There are also the Department for Business, Energy and Industrial Strategy, the Department for Environment, Food and Rural Affairs, the Department for Digital, Culture, Media and Sport—the list goes on—but I will go back into the Department and make sure that we are talking across all Departments to ensure that we get those benefits that Members are looking for.”

The Coastal Community Fund has helped support both the Ilfracombe Water Sports Centre and the North Devon Leisure Centre.

The debate gave MPs opportunities to emphsise the importance of coastal communities and how they need bespoke support.

Sally Ann Hart MP for Hastings and Rye and chair of the All Party Parliamentary Group for Coastal Communities said: “Coastal communities are integral to the UK’s environmental, social and economic wellbeing. The covid-19 pandemic profoundly impacted on our coastal communities, exposing and exacerbating long-standing social and economic structural challenges, which need an urgent and co-ordinated response for there to be a sustainable recovery.

“Coastal communities are also the most vulnerable to the impacts of climate change, with erosion and flooding posing an ever greater threat to both the built and natural environments.”

Selaine Saxby MP said: “Full-time workers in North Devon currently earn £13.29 per hour, while the south-west average is £14.67 and the Great Britain average is £15.65. Our property prices have shot up by over 22%. We are the second fastest growing property price area in the country, but our house building rate has not grown that much and the vast majority of what is being sold is going in the form of second homes or holiday lets.

“If this continues, we will no longer have coastal communities; we will have winter ghost towns. We need urgent intervention through the Levelling-Up White Paper to tackle the issue.

“Our beautiful area has seen a surge in short-term holiday lets and the second homes market. I very much hope that recommendations of the Department for Digital, Culture, Media and Sport consultation on holiday lets registration goes ahead. I also hope that there are opportunities in the Minister’s Department to impose planning restrictions to reduce the number of holiday lets that come to market. When new properties are built, a change of use should be required if they are to become a short-term holiday let. Communities such as mine need homes for people to live and work in. We love our tourists and we would never want to stop them coming, but our housing market has got completely out of balance.”

The Liberal Democrats are calling on Conservative MPs in Devon to back their legislation to offer immediate help to local families and businesses with the cost of living crisis.

Lewis Clarke www.devonlive.com

Liberal Democrat MP for Tiverton & Honiton, Richard Foord, has called on the newly elected Conservative Leader Liz Truss to immediately freeze energy bills, to protect local families and businesses from soaring prices.

It comes as the Liberal Democrats have tabled legislation in Parliament this month, signed by Foord, to cancel October’s energy bill rise – saving the average household around £1,500 this year.

The draft Bill would also offer grants to small businesses of up to £50,000 to cover 80 per cent of their energy bills, saving pubs, restaurants and high street shops from closing their doors this winter.

The Liberal Democrats are calling on Conservative MPs in Devon to back their legislation to offer immediate help to local families and businesses with the cost of living crisis.

Liberal Democrat MP for Tiverton & Honiton Richard Foord said: “Liz Truss and the Conservatives have spent months failing to act on soaring energy bills, leaving local residents in despair and small businesses going to the wall.

“They have shown they are completely out of touch with people in the West Country who are struggling to get by.

“It is time that Conservative MPs across Devon finally listened to Liberal Democrat calls to freeze energy bills to save families and pensioners from an economic catastrophe this winter. We have tabled legislation to freeze energy bills, which could be brought in on day one to offer the help that local families and businesses need.

“Liz Truss’ premiership represents more of the same failed Conservative party policies as Boris Johnson, which have led to a cost of living crisis, leaving families and pensioners at breaking point. It’s clear that the country is in dire need of a change.”

Letters www.theguardian.com

First it was the food banks that stepped in to fill a gap left by the retreating state, as successive Tory governments denied responsibility for the increase in their use.

Now it seems pollution monitoring of English rivers is also to be taken over by volunteers, because after years of severe cuts in the funding and staffing of the Environment Agency, it is no longer able to fulfil its statutory obligations by regularly monitoring all our rivers (Citizen scientists to monitor English rivers in £7m scheme, 14 September).

The Rivers Trust hopes that its £7m “citizen scientist” programme to standardise regular testing in 10 river catchment areas will lead to thousands of volunteers undertaking monitoring that the EA is unable to carry out itself.

Although all this new, regular monitoring sounds good, the volunteers will not be able to take action in response to incidents of pollution. They will need to report them to the EA, and I can find nothing to suggest that it is capable of properly processing and acting on all the pollution reports that will be coming its way. As the Guardian reported in January, the EA has already told staff to ignore reports of “low-impact” pollution events because it does not have enough money to investigate them.

The cynical among us might conclude that cutting back EA funding and letting volunteers step in is just another underhand way of our government implementing David Cameron’s “big society” through the back door.

Gary Bennett

Exeter

Citizen science is no substitute for a properly funded Environment Agency with teeth, and stronger laws. The classic case in point must be the formerly glorious River Wye, which I visited as a boy. Then it was still the sight that had inspired poets and artists; now, thanks to lax or unenforced planning laws, it is virtually dead, poisoned by the droppings of millions of intensively reared chickens.

No number of citizen scientists will improve this situation; we must either stop eating chicken or ban such factories in environmentally sensitive locations – or at the very least make the polluters pay for cleaning up their mess and ensuring waste no longer gets into the water table.

Anthony Davies

Bude, Cornwall

The provision of affordable housing as part of wider construction projects could be ditched under plans being considered by ministers to deregulate the planning system in about a dozen “investment zones”.

Developers will be delighted. – Owl

Aubrey Allegretti www.theguardian.com 

Sources said the controversial move was being contemplated ahead of a mini-budget by the chancellor, Kwasi Kwarteng, on Friday outlining the government’s growth strategy and promised tax cuts.

Swathes of environmental and planning regulations are expected to be ditched to “drive growth and speed up development” in the first batch of roughly 12 investment zones.

The zones are modelled on freeports, and are meant to encourage more business investment by granting firms tax relief and cutting red tape.

The prime minister, Liz Truss, mooted the idea during her leadership campaign, saying it would help with her plans to “unleash investment and boost economic growth right across the country”.

Councils began expressing interest in applying to become investment zones this week and Kwarteng hopes to be able to point to the uptake as proof of the policy’s popularity in his speech to the House of Commons later this week, insiders said.

A letter from the levelling up department sent to local authorities and seen by the Guardian said that one of the main benefits of becoming an investment zone would be “designated planning sites to build for growth and housing”.

It added: “Where planning applications remain necessary, they will be radically streamlined. Planning sites may be co-located with, or separate to, tax sites, depending on what makes most sense for the local economy.”

While each deal will be bespoke, local authorities granted investment zone status may be able to let developers circumvent requirements for affordable housing to be built alongside any proposed new property, according to government sources.

And planning obligations like section 106 agreements, which require developers to mitigate pressure on the local area by building or paying for additional infrastructure projects in exchange for planning permission, could also be scaled back in the first batch of investment zones.

It is also believed that plans were drawn up for a ban on development in the green belt to include an exemption for investment zones. However, the idea was not taken forward.

Simon Clarke, the levelling up secretary, is said to be wary of the last Tory rebellion over planning reforms, which Boris Johnson’s government was eventually forced to abandon.

The levelling up department declined to comment on speculation about the upcoming fiscal event.

The government said those on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the supported price and the average expected wholesale price over the period of the scheme. The amount of this discount is likely to be about £405 a MWh for electricity and £115 a MWh for gas. Repeated by Rees-Mogg in interviews.

What’s all this nonsense about Megawatt hours?

Surely, with his convictions, he should have insisted on British thermal units!

To refresh his memory, a British thermal unit is the quantity of heat required to raise the temperature of one pound of liquid water by 1 degree Fahrenheit at the temperature that water has its greatest density (approximately 39 degrees Fahrenheit). 

[1 megawatt hour = 3,412,956.34070 British thermal units so had the discounts been announced as £ per Btu they would have looked rather small, vanishingly small.]

He must really try harder to be consistent. – Owl

Liz Truss’s government has been criticised for lining up tax cuts that will help big banks and insurers save more than £6bn over the next two years.

Kalyeena Makortoff www.theguardian.com 

The figures, compiled by the House of Commons Library, come as the chancellor, Kwasi Kwarteng, prepares to freeze corporation tax as part of the government’s mini-budget on Friday.

That move alone, which will hold corporation tax at 19% rather than hiking it to 25% next year as originally planned, is expected to save City firms up to £4.5bn between 2023 and 2025.

It will deliver further savings for big banks, which are already expected to benefit from a cut in the banking surcharge from 8% to 3%, as announced last year by the then chancellor Rishi Sunak.

Together, the policies are expected to deliver tax cuts of £6.3bn over the next two years, the House of Commons analysis suggested.

It comes as Kwarteng plans to ditch EU rules that cap bankers’ bonuses at two times their salaries, in another attempt to woo City firms.

The figures will fuel further criticism of the government’s alleged promotion of trickle-down economics, in which tax cuts for the rich and businesses are believed to spur jobs creation and investment that benefits the wider population.

The Liberal Democrats, who commissioned the research, are now calling on the government to cancel the cuts and corporation tax freeze, and instead hand the money raised to households struggling to pay their energy bills.

“It is shameful that the Conservatives are choosing to cut taxes for the big banks, while leaving families and pensioners still struggling to pay their bills this winter,” said Ed Davey, the Lib Dem leader.

While Truss’s government has also revealed plans to freeze energy prices for consumers, capping the cost for a typical household at £2,500, Davey noted that the figure is still more than double the level last year.

“Meanwhile, big banks will be celebrating a bumper payday under the Conservatives as families have to choose between going cold or hungry,” he said.

“It is time Liz Truss put the British people first by scrapping this bankers’ tax cut and helping hard-pressed families instead.”

A spokesperson for City lobby group UK Finance said: “The banking and finance sector is a major source of revenue for the government, delivering investment across the country and employing hundreds of thousands of people, the majority of which are outside of London.”

The Treasury was contacted for comment.

Another damning verdict from the Institute for Fiscal Studies  ifs.org.uk

Whatever happened to the party of “sound money”? – Owl

In the ‘mini-Budget’ on Friday 23 September, the government is expected to confirm substantial tax-cutting measures reflecting the new Prime Minister Liz Truss’s commitments during the leadership campaign. Despite this – and despite the fact that the outlook for the economy is now much weaker than forecast by the Office for Budget Responsibility (OBR) in March – this statement will not be accompanied by new official forecasts for the economy and the public finances. This is disappointing.

Key findings

(Full report can be found here)

1. The OBR last made a forecast of the public finances back in March. Since then, energy prices and inflation have risen well beyond what was expected, and growth forecasts have slumped. We are forecasting the public finances here based on Citi’s latest forecast for growth, inflation and interest rates. This implies a shorter and shallower recession than the Bank of England forecast in August, owing to the substantial support provided to household and business finances by the Energy Price Guarantee. In addition, the rise in the outlook for inflation since March cushions some of the hit to the cash size of the economy – which matters more than its real size for government receipts. Nevertheless, Citi forecasts that the cash economy will be 2% smaller in 2026–27 than the OBR forecast in March.

2. The fiscal cost of the Energy Price Guarantee is highly uncertain not least because the eventual cost will depend on the path of energy prices and, relatedly, whether the scheme is extended in some form. We assume the Energy Price Guarantee will cost well over £100 billion over the next two years, but that it will then be removed as per the government’s stated plan. It could be much more expensive and end up running for more than two years – or much cheaper than we assume.

3. The cost of reversing the recent rise in rates of National Insurance contributions, and cancelling next April’s planned large rise in the rate of corporation tax, is far more certain. Together Ms Truss’s tax commitments, if carried out in full, would lead to revenues being about £30 billion a year lower than they would otherwise have been. Since these are large and permanent measures, they also matter more for the long-run health of the public finances than the eventual cost of the Energy Price Guarantee.

4. Higher inflation will also push up spending on debt interest, state pensions and most working-age benefits. In contrast, spending on public services is set in cash terms, and therefore does not automatically adjust in the light of increased inflation. Previous IFS research has suggested that an additional £18 billion would need to be found in each of the next two years to restore public service spending plans to the real-terms generosity that was intended when the plans were set. In addition, Ms Truss has committed to increasing defence spending to 3% of national income by the end of the decade. Our forecasts do not include any top-up to public service spending plans that were set a year ago; hence there is considerable risk that borrowing will end up higher than our headline estimates suggest.

5. The combination of higher spending and substantial tax cuts leaves borrowing running at a much higher level than forecast in March. Importantly, even once the Energy Price Guarantee is assumed to have expired in October 2024, our forecast has borrowing running at about £100 billion a year, over £60 billion a year higher than forecast in March. Almost half of this increase in borrowing would be due to the new tax cuts. At around 3.5% of national income, borrowing would be not far off double the 1.9% of national income that it averaged over the 60 years prior to the global financial crisis, when growth prospects were considerably higher. With investment spending running at about 2½% of national income, this would leave a persistent forecast current budget deficit of around 1% of national income. Without new tax cuts, the current budget would have been forecast to remain in balance.

6. On our forecasts, debt would increase, not just while the Energy Price Guarantee was in place, but also thereafter. Persistent current budget deficits and rising debt as a share of national income means that two main fiscal targets legislated only in January would be missed and that debt would be left on an ever-increasing path. Allowing debt to rise temporarily to finance one-off packages of support, such as the Energy Price Guarantee or the furlough scheme, in exceptional circumstances is justifiable and can be sustainable, but the same case cannot be made for allowing debt to rise indefinitely in order to enjoy lower taxes now.

7. Finding a way to somehow boost the UK’s rate of economic growth would undoubtedly help. But we should not underestimate the scale of the challenge: an increase in annual growth of more than 0.7% of national income – the increase required just to stabilise debt as a share of GDP at the very end of our forecasts – would be equivalent to the difference between the growth the UK experienced between 1983 and 2008 and that experienced in the 2010s. There is no miracle cure, and setting plans underpinned by the idea that headline tax cuts will deliver a sustained boost to growth is a gamble, at best.

Verdict on this element of Trussonomics is delivered before the policy is formally announced! – Owl

The rumoured move comes as average UK house price leapt by 15.5% annually in July. 

Suruchi Sharma Diwan www.inyourarea.co.uk 

In an attempt to drive growth, Liz Truss is reportedly poised to slash stamp duty in her first mini-Budget this week. In an effort to kickstart economic growth, the government could axe plans to raise corporation tax, reverse the hike in national insurance and end a cap on bankers’ bonuses.

The economic blueprint, set to be unveiled by chancellor Kwasi Kwarteng on Friday this week, aims to stimulate further growth in the property market and help more people buy their first home. The Bank of England is expected to announce a rise in interest rates on Thursday as it battles to curb spiralling inflation.

Under the current rules, no stamp duty is paid on the first £125,000 of any property purchase, before rising to 2% between £125,001 and £250,000, 5% between £250,001 and £925,000, 10% between £925,001 and £1.5 million and 12% above £1.5 million. For first-time buyers, the threshold is higher at £300,000 – but only if the property costs less than £500,000. The stamp duty threshold was temporarily raised to £500,000 during the Covid pandemic to fire up the property market.

Whilst Downing Street declined to comment ahead of the fiscal event on Friday, industry reactions have started pouring in with critics warning that the rumoured move would make the housing crisis “even worse”.

“Doing more harm than good”

Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, feels potential cuts to stamp duty may risk “doing more harm than good”. She said: “No buyer will ever complain about a tax cut, but if the Government was to cut stamp duty it would mean ignoring the fact that the real brake on the property market is a severe shortage of supply.

“Stimulating demand without addressing supply problems would risk more buyers chasing a tiny number of properties, which would push prices up. It’s what we saw during the coronavirus-inspired stamp duty holiday.”

“We need green homes, not another buying frenzy”

Gregory Dewerpe, founder and chief investment officer at A/O PropTech, Europe’s largest proptech VC fund, said: “It’s clear the government has learned little from the housing market feeding frenzy during the pandemic, where a cut in stamp duty did little other than put extreme upward pressure on prices.

“As winter approaches, the world is facing a climate crisis, energy prices are at eye-watering levels, and the UK has the oldest housing stock in Europe. We shouldn’t be making it easier to buy a house, instead, we should be making our houses greener. Government should prioritise energy efficiency rather than needlessly stimulate demand for an already tight housing supply.”

“No single magic bullet will improve the situation”

Richard Dana, founder and CEO of Tembo, the family mortgage broker, said: “I do not believe that there is one single magic bullet that will improve the situation for first-time buyers.

“We badly need innovation right across the board, from government initiatives to new offerings from specialist mortgage lenders. I fear that without this holistic approach, cutting stamp duty carries a risk that it will further drive-up house prices and put home ownership beyond the means of more people.”

“Affordability crisis of runaway house prices”

Andy Sommerville, director at property data and insight firm Search Acumen said: “We saw what the stamp duty holiday did to the market during the pandemic, and I have no doubt such a move will stimulate demand again. But, without supply-side reforms to boost housing stock, stimulating demand will mean more buyers bidding for the same number of properties, which can only mean one thing for house prices – affordability crisis of runaway house prices.

“Interest rates historically have averaged more than 4% and we’re expecting another rate rise from the Bank of England tomorrow, so buyers do need to be aware that savings they make today through SDLT may be cancelled out through elevated mortgage repayments in years to come due to elevated house prices and borrowing rate rises.”

“Two-thirds of stamp duty comes from London and the South East”

Richard Donnell, executive director at Zoopla said: “While we welcome any changes to reform stamp duty, a major move is needed from the Government to offset the impact of mortgage rates which will more than double this year and will impact market activity in London and the South East.

“Two-thirds of stamp duty comes from London and the South East where house prices are higher and the £500k+ stamp duty rates significantly add to the cost of moving. Changing stamp duty to boost market activity means stamp duty cuts will need to be targeted at homes priced at £500,000 and above – which currently account for 76% of stamp duty receipts.”

There are some, however, who are in support of the rumoured announcement saying, SDLT was an unnecessary tax anyway. The experts who support feel that stamp duty is a pretty bad tax – especially at high levels – that impedes mobility.

“Liz Truss must ensure they are targeted in the right way”

Jonathan Rolande, Spokesman National Association of Property Buyers said: “First-time buyers are always in need of a helping hand. Currently, they pay nothing up to a purchase price of £300,000. With huge inflation in the property market, this threshold is now looking on the low side.

“Increasing it to £350,000 would allow buyers to purchase at today’s prices without the burden of tax. A small adjustment such as this will not lead to a stampede and the consequent price rises seen thanks to previous cuts.”

From https://theriverstrust.org/sewage-map this looks to be the site of both the Exmouth treated sewage outlet into Lyme Bay and a sewer storm overflow.

In 2021, this sewer storm overflow spilled 49 times for a total of 628 hours, discharging into the Lyme Bay(c). – Owl

Anita Merritt www.devonlive.com

An unusual large structure has recently appeared in the sea by Devon Cliffs Holiday Park and will remain there for the next three weeks. The platform protruding out of the sea at Sandy Bay, believed to known as a Jack Up Barge, has been erected to enable South West Water to carry out ‘investigative work’ to upgrade the wastewater network in the area.

It is said to be part of a wider project to protect bathing water and the environment while reducing pollution. While the works are carried out people are still able to use the beach as normal.

This summer, some of Devon’s beaches have been closed for swimming following pollution concerns. In August and September, East Devon District Council issued a number of warning against visiting Exmouth beach due to pollution caused by heavy rain.

Such warnings have been issued multiple times since mid-August when the heat wave first gave way to heavy rain. Warnings have also been issued at Teignmouth Holcombe, Teignmouth Town, Sidmouth, Beer, and Wembury.

A spokesperson for South West Water said: “We are currently in the process of carrying out planned investigative work at Sandy Bay as part of a scheme to upgrade the wastewater network in the area. This initial work is expected to take around three weeks to complete and is part of a wider project to protect bathing water and the environment while reducing pollution.

“There should be no impact to customers as a result of this project and we will keep them fully updated on any further work.”

According to Exeter Port Authority, the Jack Up Barge ‘Mariner’ from Teignmouth moved to Sandy Bay last Saturday, September 17, during high water. It states the works will last approximately 20 days, ‘weather permitting’.

• Conversion of roof space to habitable use to include a rear dormer, 2 front rooflights and conversion of roof from hip to gable end.6 Ash Grove Exmouth Devon EX8 3BNRef. No: 22/2016/CPL | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Provision of donkey tracks from Bat Barn Yard to Tip Field and improvements to Bat Barn Yard. Woods Farm Bowd Sidmouth EX10 0JSRef. No: 22/2011/FUL | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Variation of condition 2 (approved plans) and condition 5 (preliminary ecological appraisal and bat emergence survey report) of application 20/2890/FUL (Conversion and extension of 2 no. barns to form 3 no. dwellings; demolition and reconstruction of barn 3 to provide outbuilding for use incidental/ancillary to main farmhouse, and associated works) to facilitate rebuilding of courtyard wall and part of roof structure to barn 3. Ley Farm Yarcombe Devon EX14 9LWRef. No: 22/2014/VAR | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Construction of replacement agricultural storage shed Broadhayes Farm Stockland EX14 9ELRef. No: 22/2004/FUL | Validated: Thu 08 Sep 2022 | Status: Awaiting decision
• T13 Sycamore – Reduce by approximately 2m to match Holm Oaks. Maximum diameter of cuts 50mm T23 Monterey Pine – Fell and replant T24 Sycamore – Reduce height and northerly spread by approximately 3m and reshape. Maximum diameter of cuts 50mm Reason for Works: T13 Sycamore – Fast growing species, tree is starting to outcompete adjacent Holm Oaks. Consider light reduction. T23 Monterey Pine – Tree has recently lost one circa 250mm diameter limb from centre of Crown. Tree not worthy of retention T24 Sycamore – Tree suppressed by T25. Northern crown aspect lifted 2020. Consider light reduction to encourage lateral growth in anticipation of removal of Elvestone Fore Street Hill Budleigh Salterton Devon EX9 6HDRef. No: 22/2003/TRE | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Single storey rear extension to include addition of 2 x rooflights. 18 Woodmans Orchard Talaton Exeter EX5 2SERef. No: 22/2001/FUL | Validated: Thu 08 Sep 2022 | Status: Awaiting decision
• Erection of detached dwelling with double garage together with associated external works including amendments to access driveway Little Foxholes 15 Foxholes Hill Exmouth Devon EX8 2DFRef. No: 22/1996/FUL | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• T1, Birch : removal of medium sized twin stemmed birch tree with large bark inclusion at base; likelihood of basal failure is increasing as enlarging stem diameters are putting increasing pressure on bark inclusion; secondary stem has a large rot pocket due to the removal of a branch in the past; root ball is now causing significant damage to the adjacent concrete pathway; both stems are within striking distance of properties should failure ocur. 3 Colybank Rosemary Lane Colyton EX24 6LRRef. No: 22/1991/TCA | Validated: Wed 07 Sep 2022 | Status: Awaiting decision
• Reduce eastern lateral limb, exhibiting significant devay, to most suitable growth point (MDC 100mm) OR back to main stem (MDC 150mm) depending on climbing arborists opinion; Install new flexible brace; remove dead stem from the western aspect (MDC 175mm); reduce dead western limb back to suitable live growth (MDC 65mm) Beatlands House Beatlands Road Sidmouth EX10 8JHRef. No: 22/1995/TRE | Validated: Thu 08 Sep 2022 | Status: Awaiting decision
• T3 – Pine Reduce two limbs on western aspect overhanging parking area of The Coach House. 1st limb arising at 10 metre above ground level (AGL) to be reduced by 2 metres, maximum diameter cut (MDC) of 100mm. 2nd limb arising at 12m AGL to be reduce by 3 metres, MDC 125mm. T4 – Pine Reduce first westerly growing limb back by 3 metres, MDC 75mm. T5 – Pine Reduce western aspect of canopy by 3.5 metres, tip pruning tertiary branches. MDC 100mm. These works are recommended to alleviate weight stresses on heavy limbs, therefore reducing the risk of limb failure over an area with a near permanent target. 7 Coach House West Hill Lane Budleigh Salterton EX9 6AARef. No: 22/1994/TRE | Validated: Thu 08 Sep 2022 | Status: Awaiting decision
• Variation of condition 2 (approved plans) and condition 5 (Varied to provide a wall in lieu of a boundary hedge) of application 20/2600/FUL (2 bedroom dwelling with garden and parking). Myrtle Cottage Clyst St Mary Exeter EX5 1BBRef. No: 22/1982/VAR | Validated: Tue 06 Sep 2022 | Status: Awaiting decision
• Conversion of roof space to habitable use to include a side dormer with alteration to fenestration. Crosshills Lodge Lancercombe Sidmouth EX10 0JXRef. No: 22/1989/FUL | Validated: Tue 06 Sep 2022 | Status: Awaiting decision
• Single storey rear extension Beechdene Hillside Road Sidmouth EX10 8JFRef. No: 22/1988/FUL | Validated: Tue 06 Sep 2022 | Status: Awaiting decision
• Variation of condition no.2 (approved plans) on application 21/1847/FUL (Erection of replacement dwellinghouse (inc. demolition of existing) and alterations to vehicular access) to substitute the amended plans in the schedule of approved drawings. The Bungalow Berry Hill Beer Seaton EX12 3JPRef. No: 22/1981/VAR | Validated: Thu 08 Sep 2022 | Status: Awaiting decision
• Single storey front/side extension. 7C Cyprus Road Exmouth Devon EX8 2DZRef. No: 22/1963/FUL | Validated: Mon 05 Sep 2022 | Status: Awaiting decision
• Construction of a car port to include installation of electric garage door and conversion of pan tiled roof to slate roof. Honey Cottage Honey Lane Woodbury Salterton Devon EX5 1EJRef. No: 22/1978/FUL | Validated: Wed 07 Sep 2022 | Status: Awaiting decision
• Single storey side extension and part single and part double storey extension to rear with first floor terrace and removal of existing side and rear extensions as well as conversion of carport to double garage with storage in pitched roof void above. Copplestone Cottage Copplestone Lane Colaton Raleigh EX10 0HWRef. No: 22/1976/LBC | Validated: Wed 07 Sep 2022 | Status: Awaiting decision
• Single storey side extension and part single and part double storey extension to rear with first floor terrace and removal of existing side and rear extensions as well as conversion of carport to double garage with storage in pitched roof void above. Copplestone Cottage Copplestone Lane Colaton Raleigh Devon EX10 0HWRef. No: 22/1975/FUL | Validated: Wed 07 Sep 2022 | Status: Awaiting decision
• Conversion of roof space to habitable use to include 1no. front dormer, 2no rear dormers with associated juliette balcony and 3 x front rooflights, roof extension, flat-roof projection and associated works. 4 Bennetts Hill Sidmouth Devon EX10 9XHRef. No: 22/1961/FUL | Validated: Wed 07 Sep 2022 | Status: Awaiting decision
• Variation of Condition No.2 (Approved Plans) on application 21/2913/FUL. Woodland Lodge Bystock Exmouth EX8 5EDRef. No: 22/1971/VAR | Validated: Mon 05 Sep 2022 | Status: Awaiting decision
• Single storey side extension and single storey side garage extension. Little Barn Marsh Honiton EX14 9AJRef. No: 22/1970/FUL | Validated: Mon 05 Sep 2022 | Status: Awaiting decision
• T1, Hornbeam : reduce Northern aspect of crown to provide up to approximately 2.5 metres clearance to adjacent property; reduce aspect of crown to NW by approximately 1.5 metres – any cuts made will have a maximum diameter up to approximately 25mm. Reduce encroachment on to property. Boundary House 6 Cricket Field Lane Budleigh Salterton Devon EX9 6SYRef. No: 22/1964/TRE | Validated: Mon 05 Sep 2022 | Status: Awaiting decision
• T1, Ash : Tree has signs of Ash dieback and the clients concerned for the tree’s safety ; reduce crown of Ash by approximately 3-4 metres in height. 17 Glebelands Uplyme Devon DT7 3TBRef. No: 22/1965/TRE | Validated: Mon 05 Sep 2022 | Status: Awaiting decision
• Construction of single storey rear extension to existing garage measuring 5.00m beyond original rear wall, 2.40m to the eaves and 2.40m in total height. 4 Old Barn Close Stoke Canon Exeter EX5 4ADRef. No: 22/1952/GPD | Validated: Tue 06 Sep 2022 | Status: Awaiting decision
• Ash Tree on NE boundary of property – tree suffering from Ash Dieback – Fell Oak tree on NW boundary of property – fell dead stem Bickwell House Stadway Meadow Sidmouth EX10 8TBRef. No: 22/1956/TCA | Validated: Mon 05 Sep 2022 | Status: Awaiting decision
• Certificate of lawfulness for the siting of a caravan within the domestic curtilage for ancillary living accommodation.Furzy Green Holly Ball Lane Whimple Devon EX5 2QXRef. No: 22/1946/CPL | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Single storey rear extension, outdoor pool with summer house, redevelopment and remodelling and landscaping works. Sandpipers (formerly Clear Waters) River Front Exton Exeter EX3 0PRRef. No: 22/1951/FUL | Validated: Mon 05 Sep 2022 | Status: Awaiting decision
• Conversion of a barn to a single storey 1-bed dwelling. Moor Farm Talaton Exeter EX5 2RFRef. No: 22/1909/FUL | Validated: Tue 06 Sep 2022 | Status: Awaiting decision
• Installation of a multi fuel stove within existing chimney to include installation of twin skinned flue liner. Drakes Cottage Broadclyst EX5 3JHRef. No: 22/1907/LBC | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Installation of a multi fuel stove within existing chimney to include installation of twin skinned flue liner. Drakes Cottage Broadclyst EX5 3JHRef. No: 22/1906/FUL | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Conversion of barn into 2 bed dwelling with associated parking and a garden. St Andrews Harp Lane Aylesbeare EX5 2JLRef. No: 22/1889/FUL | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Installation of air souce heat pump. 36 Slewton Crescent Whimple Exeter EX5 2QARef. No: 22/1821/FUL | Validated: Tue 06 Sep 2022 | Status: Awaiting decision
• Erection of a two storey 4-bed detached dwelling and associated infrastructure. South Lodge Courtlands Lane Exmouth Devon EX8 3NZRef. No: 22/1798/LBC | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Erection of a two storey 4-bed detached dwelling and associated infrastructure. South Lodge Courtlands Lane Exmouth Devon EX8 3NZRef. No: 22/1797/FUL | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Erection of a proprietary mobile stable and tack room.22 Underhill Crescent Lympstone Devon EX8 5JFRef. No: 22/1748/CPL | Validated: Fri 09 Sep 2022 | Status: Awaiting decision
• Replace existing wood doors and windows 3 Langsford Barton Exeter Road Newton Poppleford Devon EX10 0FBRef. No: 22/1589/FUL | Validated: Thu 08 Sep 2022 | Status: Awaiting decision

In another disarmingly frank answer to a question this week, Truss admitted that the U.K. was nowhere near securing a trade deal with Washington. Labour has been digging through the former trade secretary’s words over the past few years and found that she claimed a U.S. trade deal was her No. 1 priority in 2019… set a mid-2021 deadline during the pandemic … and insisted last summer that there was “significant progress” being made.

From Politico newsletter

Liz Truss will announce radical plans to cut stamp duty in the government’s mini-budget this week in an attempt to drive economic growth, The Times has been told.

Fuel on the fire of house prices – Owl

www.thetimes.co.uk  (Extract)

The prime minister and Kwasi Kwarteng, the chancellor, have been working on the plans for more than a month and will announce them on Friday.

Truss believes that cutting stamp duty will encourage economic growth by allowing more people to move and enabling first-time buyers to get on the property ladder.

Two Whitehall sources said that cuts to stamp duty were the “rabbit” in the mini-budget, which the government is billing as a “growth plan”. The fiscal statement will also include plans to reverse the national insurance rise and freeze corporation tax, two measures that will cost £30 billion a year between them.

Truss is also considering bringing forward plans to cut income tax by 1p in the pound from 2024 to next year, although this is likely to be reserved for a full budget before the end of the year…..

…..Under the present system no stamp duty is paid on the first £125,000 of any property purchase. Between £125,001 and £250,000 stamp duty is levied at 2 per cent, £250,001 and £925,000 5 per cent, £925,001 and £1.5 million 10 per cent and anything above £1.5 million 12 per cent. For first-time buyers the threshold at which stamp duty is paid is £300,000.

During the pandemic the stamp duty threshold was increased temporarily to £500,000 to help to stimulate the property market. Truss has previously said that cutting stamp duty is “critical” to economic growth. As chief secretary to the Treasury she said that the highest rate of stamp duty, which was introduced by George Osborne, was “clogging up” the housing market and leading to fewer transactions….

Homes acquired with “dirty money” in the richest parts of London could be seized and turned into affordable housing under plans to crack down on oligarchs using Belgravia, Knightsbridge and Mayfair “to rinse their money”.

Robert Booth www.theguardian.com 

Labour-controlled Westminster city council is examining the use of compulsory purchase orders in extreme cases where it finds properties are not being used for their stated purpose, as part of a push to “combat the capital’s reputation as the European centre for money laundering”.

The plan faces obstacles including a lack of transparency over property ownership and a shortage of checks on the registration of companies, but the council is threatening to use seized homes to help reduce the waiting list for affordable housing of 4,000 households.

The number of properties in Westminster registered to owners in Jersey and Russia has risen by 300% and 1,200% respectively since 2010.

The council is exploring the use of a compulsory purchase order against a property registered in Seychelles, the owner of which has run up significant council tax arrears.

Russians accused of corruption or of links to the Kremlin have bought property worth nearly £430m in Westminster since 2016 – more than in any other UK area – according to researchers at Transparency International UK (TIUK).

It is believed that property worth about £283m has been purchased in neighbouring Kensington and Chelsea.

Adam Hug has been leader of Westminster council since May, when Labour took control for the first time after 58 years of Conservative rule.

He said: “Westminster’s dirty secret has been known for many years, but those in power looked the other way for too long as money of questionable origin flooded into London and investors took advantage of our relatively lax laws.

“It took the war in Ukraine to refocus attention on oligarch investments and what London has become in terms of a European laundromat for dirty money.”

He said the problem went further than “[Vladimir] Putin and his henchmen”, and that it damages London’s reputation by supporting authoritarianism abroad. Hug added that it “drains the vitality of areas with empty or underused homes”.

The council is mapping properties owned overseas against council tax data to determine whether they are being used for their stated purpose.

Westminster plans to target homes it finds have been acquired with “dirty money” or “money of dubious origin”. The council defines dirty money as that obtained from criminal activity including bribery, theft of state funds and misuse of public office.

Money of dubious origin is money where there is no or limited transparency of how the funds were acquired, often associated with the use of tax havens or elaborate corporate constructions to avoid tax.

Rose Zussman, policy manager at TIUK, said: “It is no secret that kleptocrats and those with money to hide have invested vast sums into the Westminster property market over the years. It is promising to see the council seeking to help expose and recover these illicit assets.”

But she said any funds reclaimed that are linked to corruption should go back to victims in the origin state “to ensure justice is served”.

Hug is also convening a meeting of property owners, experts and officials in the capital to join the “Westminster against dirty money” campaign and is calling on the government to restrict the artificial use of tax havens, and increase funding for the National Crime Agency and HMRC to fight money laundering.

The council wants stronger identity checks when people register companies and the new beneficial property ownership register to be fully implemented.

The register went live last month and overseas entities that already own or lease land or property in the UK must submit their registrable beneficial owners or managing officers by 31 January 2023.

Kwasi Kwarteng has refused to let a government watchdog assess the economic impact of planned tax cuts expected in a mini-budget on Friday.

The party of “sound money” doesn’t want any inconvenient truths to get in the way. Are the Tories on course to crash the economy? – Owl

Rowena Mason www.theguardian.com 

Mel Stride, the Tory chair of the Treasury select committee, urged Kwarteng to allow independent forecasts for the public finances to be published alongside his mini-budget on Friday. Stride released a strongly worded statement urging more clarity around the effects of the new chancellor’s fiscal interventions.

The chancellor is expected to unveil tax cuts of £30bn to £50bn, according to some estimates, while the government’s intervention to freeze energy prices for consumers and businesses could cost more than £100bn. He is also expected to review his fiscal rules to allow the government to borrow more.

Stride, an ally of the former chancellor and defeated leadership contender Rishi Sunak, said independent forecasts from the Office for Budget Responsibility were necessary to “provide reassurance and confidence to international markets and investors”.

He said: “As a committee, we have in the past reported to the house that we consider it very important that significant changes to taxation are announced in a fiscal event alongside an OBR forecast. These forecasts are a vital indicator of the health of the nation’s finances, and provide reassurance and confidence to international markets and investors.

“There has been a deterioration in our economic outlook since the last OBR forecast in March. There have been significant fiscal interventions since then and we are told there will be further significant interventions including major permanent tax cuts to be announced on Friday. Under these circumstances, it is vital that an independent OBR forecast is provided.”

Richard Hughes, the chair of the OBR, said in a letter to Stride that he had notified Kwarteng when he became chancellor that the OBR was ready to provide a forecast. He said a quick turnaround would mean the forecasts provided “less complete analysis supporting the key judgments, less detailed breakdowns of the key economic, and less contextual and supplementary information than [forecasts] produced in normal times”, but it would give “the most complete and up-to-date picture of the economic and fiscal outlook as possible”.

But a government spokesperson said: “Given the exceptional circumstances our country faces, we have moved at immense speed to provide significant energy bill support for households and businesses, and are acting swiftly to set out further plans to kickstart economic growth later this week. We remain committed to maintaining the usual two forecasts in this fiscal year, as is required.”

It is understood the chancellor plans to hold a full budget later in the year, though the bulk of the measures ministers plan to implement in their first year of the administration are likely to be included in Friday’s event.

As well as the mini-budget on Friday, there is expected to be a statement from Jacob Rees-Mogg, the business secretary, on Wednesday, outlining an energy support package for businesses.

Michelle Donelan, the culture secretary, told broadcasters on Tuesday morning that the government understood why businesses wanted “clarity and assurance”.

She said: “Many companies and public sector organisations will need additional support and that is why we want to work up a tailored package to target that support and make sure that support is really the correct support.”

“We’re building an economy from the bottom up and middle out”

Still there are always the delusional zealots who back belief over experience. – Owl

Liz Truss favours trickle down economics but results can be trickle up

Trickle down economics was highly fashionable on the political right in the 1980s, when both Ronald Reagan in the US and Margaret Thatcher championed the idea. It resurfaced in America under both George W Bush and Donald Trump, and it is now undergoing a revival in Britain under the new prime minister, Liz Truss.

Larry Elliott www.theguardian.com 

The theory of trickle down economics is simple. Governments should cut taxes for the better off and for corporations because that is the key to securing faster growth. Entrepreneurs are more likely to start and expand businesses, companies are more inclined to invest and banks will tend to increase lending if they are paying less in tax.

Initially, the beneficiaries are the rich, but gradually everyone gains because as the economy gets bigger well-paid jobs are created for working people. Governments should stop focusing on how the economic pie is distributed and focus on growing the pie instead.

Supporters of trickle down often cite the work of the US economist Arthur Laffer as proof that the theory works. Laffer said tax cuts for the wealthy had a powerful multiplier effect and any revenues lost by governments from reducing tax rates would be more than compensated for by the fruits of higher growth.

Truss is using this argument to justify the £30bn of tax cuts to be announced in Kwasi Kwarteng’s mini budget on Friday, even though Laffer was clear his theory worked best when personal tax rates were prohibitively high, by which he meant between 50% and 100%. At rates below 50%, Laffer found cutting taxes led to bigger rather than smaller budget deficits.

In practice, trickle down did not go according to plan. Reagan and Bush slashed tax on higher earners but inequality soared: between 1979 and 2005 the incomes of the Top 1% of earners tripled while those of the bottom 20% rose by just 6%. It was more a case of trickle up than trickle down.

Moreover, Reagan’s combination of tax cuts for the rich and a big increase in defence spending resulted in a threefold increase in US federal government debt between 1981 and 1989. The US economy grew strongly in the latter years of Reagan’s presidency, but this was a period not just of higher spending on the military but also of cheaper borrowing after the cripplingly high interest rates of the early 1980s.

In a 2015 assessment, the International Monetary Fund rubbished trickle down and said governments should instead focus on policies that would directly help those on low and middle incomes.

“We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the Top 20% results in lower growth – that is, when the rich get richer, benefits do not trickle down,” the IMF said. “This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class.” Joe Biden agrees.

Are the Tories on course to crash the economy?

An application has been submitted for a new operating centre to move into a village trading estate where residents have long complained about noise and dangerous traffic congestion from HGVs. Swindon-based OPX Logistics Ltd is seeking to keep five vehicles and five trailers at Lodge Trading Estate in Station Rd.

Anita Merritt www.devonlive.com 

The trading estate is already home to haulage company Heaver Brothers Ltd and also international courier delivery company TNT. Vast complaints have been made by locals who say large-vehicle/ heavy traffic volume companies should never have been permitted to operate in the rural residential area.

Narrow roads make it difficult for large vehicles to negotiate its way through. Photographs have often been shared on social media capturing stationary traffic and lorries attempting to pass each other in narrow lanes, which residents say highlights the road is not suitable for HGVs.

OPX Logistics, which has more than 30 years’ experience in the delivery of logistics, is required to advertise public notices to inform people of its plans. Anyone with concerns is is invited to write to the traffic commissioner who is responsible for licensing and regulating operators of heavy goods vehicles (HGVs), public service vehicles (PSVs) and local bus services.

The notice states: “OPX Logistics Ltd of Ignition Park, Faraday Road, Swindon, SN3 5FB is applying to add an operating centre to keep five vehicles and five trailers at Lodge Trading Estate, Station Rd, Broadclyst, Broadclyst Station, Exeter EX5 3BS.

Residents have spoken about their frustration over traffic problems in Broadclyst (Image: Broadclyst Station Community)

“Owners or occupiers of land (including buildings) near the operating centre(s) who believe that their use or enjoyment of that land would be affected, should make written representations to the Traffic Commissioner at Hillcrest House, 386 Harehills Lane, Leeds, LS9 6NF, stating their reasons, within 21 days of this notice.

“Representors must at the same time send a copy of their representations to the applicant at the address given at the top of this notice. A Guide to Making Representations is available from the Traffic Commissioner’s office.