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Cost-of-living crisis mini-budget set for next Friday

15 Sep 2022 4 minute read
Kwasi Kwarteng. Photo Jeff Overs/BBC

The so-called “fiscal event”, promised by Prime Minister Liz Truss as part of her plans to grow the economy and tackle soaring inflation, will be announced by Kwasi Kwarteng on September 23, the PA news agency understands.

MPs are expected to sit in the Commons on Thursday, according to a parliamentary business paper.

Parliamentarians will then be asked to sit a day longer before going into their conference break, to allow Mr Kwarteng to set out his mini-budget.

It also appears that, according to the business paper, MPs will consider a motion proposing that the Commons returns from conference recess early, on October 11.

Fiscal event

It follows days of speculation about when the fiscal event could take place and whether, given the scale of the cost-of-living crisis predicted for this winter, MPs should return early.

The timing for the fiscal event is highly constrained, with Parliament currently suspended while the country is in mourning following the death of the Queen, and the Prime Minister expected to fly to New York for the United Nations General Assembly following the monarch’s funeral on Monday.

MPs had been due to break for conference season on September 22.

The proposed change to recess dates would see MPs return following the Scottish National Party annual conference in October.

It is expected that Wednesday will see those MPs who wish to do so take a new oath or affirmation to the King.

A separate announcement on an energy package is also expected next week, possibly on Wednesday or Thursday.

Ms Truss promised the fiscal event during the Tory leadership campaign, as concerns grew over rising energy bills and the expectation of a difficult winter for households.

Tax cuts

Her bid to become Prime Minister won over grassroots members with promises of tax cuts and a pledge to put a stop to the planned rise in corporation tax.

The mini-budget follows in the wake of an unprecedented multibillion-pound package to tackle sky-high energy bills and ease the cost of-living crisis, with a focus on capping prices and boosting domestic energy supplies.

Under the “energy price guarantee”, bills for the average household will go no higher than £2,500 at any point over the next two years.

It will save a typical home around £1,000 from October 1, when the current consumer price cap had been set to soar, according to official estimates.

The news of the multibillion-pound package was immediately overshadowed by the death of the Queen, leaving many outstanding questions about how it will be funded and what other measures might accompany it.

Boost growth

Some charities have also called on the Government to go further and offer more support to vulnerable households, many of whom are already struggling with the price of bills.

It is expected that alongside fresh measures to tackle the cost-of-living crisis and boost growth, Mr Kwarteng will set out how the mammoth energy package will be paid for.

Business leaders have expressed concern in recent days about the lack of clarity over the equivalent support for companies, which are also struggling with rising bills.

Downing Street has promised that more details about the support will come next week alongside a pledge to backdate energy costs for businesses if there is a delay in getting the complex new scheme off the ground.

Sir Lindsay Hoyle, the Speaker of the House of Commons, earlier told Times Radio that it was his “expectation” and “hope” that the conference break will be slimmed down.

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