Morrisons staff asked to invest thousands in their own company

Exclusive: Some employees report feeling pressed by private equity owners to contribute to an ailing business

Staff who agreed to invest in shares in Morrisons are said to have been paid a special bonus. 

Photograph: Chris Radburn/PA

Sarah Butler

THE GUARDIAN
@whatbutlersaw

Fri 23 Sep 2022 

Morrisons’ private equity owners have asked hundreds of staff – from store managers upwards – to invest thousands of pounds of their own money in the business.

More than 800 people have been asked to invest in the ailing supermarket in the past few months, with one well-placed source saying middle management level departmental heads had been asked for £10,000 while the directors of departments had been asked for £25,000 each. It is understood the minimum investmentrequired to participate was £2,000.

The source said that, while contributions were voluntary, some staff were annoyed about feeling pressed to make a cash contribution to an ailing business at a time when the cost of living was soaring.

“People are used to being paid bonuses rather than asked to invest,” the source said.

However, it is understood that those who agreed to invest in shares in Morrisons were paid a special bonus, equivalent to 60% of the amount they were asked to invest before tax, with quite a number understood to have invested more.

A spokesperson said: “The opportunity to invest in the future of Morrisons was incredibly popular throughout the business with over 800 colleagues, or more than 90% of those eligible, choosing to invest.”

One expert said it was common to ask staff to invest as part of private equity deals, with the stakes seen as an incentive to help the business grow.

While it is less usual to ask rank-and-file workers to participate, he said the wider-than-usual scope of the Morrisons scheme could be seen as a good thing, allowing more people to benefit from a potential return on their investment.

The grocer, which was bought out by the US private equity firm Clayton Dubilier & Rice (CD&R) in a deal worth about £7bn last year, last week lost its position as the UK’s fourth largest supermarket chain to German discounter Aldi.

Morrisons’ market share has been drifting as it is opening very little new space and surveys suggest its prices have become more expensive in comparison to key competitors.

Sales fell by 4.1% in the three months to 4 September, a time when all other major supermarkets except Waitrose increased sales.

One industry insider said: “The numbers look grim. [The product] doesn’t look exciting and they have missed quite a lot of opportunities.” The source said suppliers were becoming disillusioned as volume of goods sold by the retailer fell back.

Trevor Strain, the righthand man of the chief executive, David Potts, is understood to have told the business he plans to leave as he wants to seek a top job elsewhere. One source said Strain had been unwilling to commit to a further five years at the business, to see out CD&R’s investment plan, having joined Morrisons in 2009.

In April, Morrisons warned its profits were likely to take a significant hit this year as the cost of living crisis and disruption due to the war in Ukraine weigh on the grocery market.

The supermarket chain said “developments in the geopolitical environment” and “ongoing and increasing inflationary pressure” since the beginning of February were hitting consumer sentiment and spending.

The retailer also recently bought the McColl’s network of more than 1,000 convenience store outlets out of administration as it moved to protect a wholesale supply agreement to the chain. McColl’s had been suffering from financial pressures for some time before its collapse.

UK

Is fracking coming to a town near you? Here’s how you can fight them – and win

Tina Rothery

In my group, Nanas Against Fracking, we know community organising is not easy. But we are a force to be reckoned with

‘We lobbied our local MPs, held public meetings and 

spread our message in the media.’ Tina Rothery, centre front,

 of Nanas Against Fracking. 

Photograph: Jasper Clarke/Observer

Fri 23 Sep 2022

Hysterical “luddites” funded by Russia was how Jacob Rees-Mogg, in parliament yesterday, described concerned residents opposed to fracking in England. What a slap in the face for those of us who have spent more than a decade trying to protect our communities from the dangerous, polluting shale gas industry. We have never received so much as a rouble or a vodka shot for our efforts.

Here in Lancashire, we actually believed we had won this fight – twice. Our first victory was in 2015, when Lancashire county council rejected planning applications from the fracking firm Cuadrilla for two large sites between Preston and Blackpool. This decision was overruled by Westminster in 2016, and work began in 2017 to transform the Preston New Road site from a field where cows graze into a shale gas site. Nanas Against Fracking, a group I co-founded, started protesting at the site that day too, and continued for more than 1,000 days.

Our second short-lived victory came in November 2019, when the government had to halt fracking and put a moratorium in place, because the work had set off an earthquake measuring 2.9 on the Richter scale. Even if it is possible to ““monitor” earthquakes, which are one of the most immediately dangerous risks of fracking, the government had to face the fact that you can’t control them. The moratorium brought some relief to local residents and campaigners; although, of course, we wanted an outright ban put in place in order to finally draw a line under this and feel at ease again.

The government’s decision to lift the moratorium yesterday sent shockwaves through our community. As an anti-fracking Nana, I know how much time and energy it takes to confront a heavily financed industry, while the government acts as its cheerleaders and police are used as security on fracking sites. My fellow Nanas Against Fracking feel angry and confused, as though we have been here before. In addition to earthquakes, we are racked with other worries, such as whether home insurance premiums will increase, as they have done for people living in areas near shale gas fracking sites in the US. Will we, like some of them, see higher incidences of childhood leukaemia? What about the issues with maternal health – for example, an increased rate of stillbirths, for which there is some evidence in Utah? What will be the impacts of the waste and methane released by fracking? Has the value of our properties already dropped?

Witnessing this gross failure of democracy can feel hopeless. I remember an older man in Balcombe in 2013 looking out of the window of a teashop in the village as it became populated with protesters. He said he had believed that working, paying his taxes, never breaking the law, raising his family, and owning his home meant that he was part of a democratic society, that he could call on the government if he felt at risk. But his MP – Francis Maude, who appointed Lord Browne, the chairman of Cuadrilla, as the government’s senior business adviser – did little to help. Seeing our protest, the man said he was relieved. He had been worried about what fracking would do to the health and wellbeing of people living in Balcombe, and that we were the only ones who heeded his call.

So, if you want to resist fracking in your town, community organising is the place to start. At its height, the anti-fracking movement in the UK was made up of 300 autonomous groups across the country. As well as physically protesting, we lobbied our local MPs, informed councillors, held public meetings, objected to planning, researched and networked, and spread our message in the media. We made sure there was a role for everyone in this movement, regardless of their age, ability, background or location.

There is a place for nonviolent direct action too. It helps to infuse activism with joy. If you want to undertake a 1,000-day protest like ours, you have to come up with ways to motivate each other – such as acknowledging wins to be had before the primary goal is reached. We watched the share prices of the Australian firm AJ Lucas (Cuadrilla’s parent company), and celebrated when they fell after delays and bad press brought about by our activities at its site. We rejoiced in every new face who joined the movement (and those people who returned again and became familiar faces). We danced, sang and shared food.

The hardest thing about activism is stepping into it. Who would sanely choose to live in opposition to a more powerful force? To knowingly arrive each day accepting that arrest, violence and abuse are a certainty? We used to give public talks to communities at risk of fracking, and I called the talk The Unwelcome Gift of Truth. I hated informing residents of what was to come, because I knew the vast majority would find it impossible to ignore the risks their families would face; that they too would fall through the door marked “activism”, and maybe, like me, be unable to find the exit. How do you “unknow” the facts? How can anyone simply stand aside and trust that the government or its toothless regulatory bodies will keep us safe from this industry?

Yesterday, my fellow anti-fracking Nana, Anjie Mosher, told me: “Although the government has almost removed all right to protest, I will still peacefully stand up to do whatever I can to slow down and stop this industry before irreparable damage is done.” I’ll be doing the same, and I hope you will too.

Tina Rothery is a Blackpool resident, campaigner and co-founder of Nanas Against Fracking

UK’s nuclear waste cleanup operation could cost £260bn


Cost of safely clearing waste from ageing power stations is soaring, say experts

 

Sellafield, which is storing much of the UK’s nuclear waste, 

is one of the most hazardous sites in the world.

 Photograph: Simon Grosset/Alamy

Sandra Laville 

Environment correspondent

THE GUARDIAN

Fri 23 Sep 2022 

The cost of decommissioning the UK’s 20th-century nuclear waste could rise to £260bn as the aged and degrading sites present growing challenges, according to analysis presented to an international group of experts.

As the government pursues nuclear energy with the promise of a new generation of reactors, the cost of safely cleaning up waste from previous generations of power stations is soaring.

Degrading nuclear facilities are presenting increasingly hazardous and challenging problems. Ageing equipment and electrical systems at Sellafield, which is storing much of the country’s nuclear waste and is one of the most hazardous sites in the world, are increasing the risk of fire, according to the Nuclear Decommissioning Authority. They require increasing maintenance and present growing risk. Last October a faulty light fitting started a blaze at a Sellafield facility which led to its closure for several weeks.

Analysis by Stephen Thomas, a professor of energy policy at the University of Greenwich, estimates the total bill for decommissioning the UK’s nuclear waste mountain will grow to £260bn.

Thomas told a conference of international experts the cost of decommissioning Sellafield had risen from to £110bn, according to freedom of information requests.

Other sites that need decommissioning are the 11 Magnox power stations, built between the 1950s and 1970s, including Dungeness A in Kent, Hinkley Point A in Somerset and Trawsfynydd in north Wales, and seven advanced gas-cooled reactors built in the 1990s, including Dungeness B, which closed last year, Hinkley Point B and Heysham 1 and 2 in Lancashire.

Deterioration of one of the Magnox stations, Trawsfynydd, which shut down in 1991, is such that substantial work is needed to make it safe, according to the NDA. “Work that would then need to be undone to complete reactor dismantling,” the agency said.

Thomas told the International Nuclear Risk Assessment Group similar problems are expected at other Magnox sites. The timetable for decommissioning the old nuclear power stations has been abandoned, with no new timescale yet published.

The Nuclear Waste Service has said deferring decommissioning for 85 years from shutdown, which was previous policy, is not suitable for all the reactors because of their different ages and physical conditions. Decommissioning of some Magnox stations will have to be brought forward, the NWS has said.

Attempts to speed up the decommissioning would only add to the growing bill, Thomas said, which he estimated had increased to £34bn.

In 2005, the cost for decommissioning and disposing of the radioactive waste from nuclear power stations built in the 1950s, 70s and 90s was put at £51bn.

Last year the NDA estimates rose to £131bn, and its latest annual report said £149bn was needed to pay for the clear up. But Thomas said rising costs meant the total bill was on track to reach £260bn.

Part of the soaring increase is the cost of building a large underground nuclear waste dump or geological deposit facility (GDF) to safely store the 700,000 cubic metres of radioactive waste – roughly the volume of 6,000 double decker buses – from the country’s past nuclear programme.

The mammoth engineering project was initially predicted to cost £11bn but the bill is now estimated to be up to £53bn because of uncertainty about where the site will be located, and the need to provide space for an unspecified amount of waste from the new generation of nuclear reactors which the government wants to build.

Four areas of the country are being considered for the GDF but no decision on where it will be located has yet been made.

“While we are clear about the current legacy of waste which already exists, a GDF would have to handle additional waste from new facilities being developed,” the NWService said. “The actual cost will … depend on the number of new nuclear projects that the UK develops in future and any additional waste from those stations.”

The cleanup of past nuclear waste will take more than 100 years, the NDA has said. Highlighting the challenges of the degrading and hazardous facilities, the authority said in its annual report that robots and drones were increasingly being used to carry out site inspections.

Scottish and Welsh leaders say tax cuts for rich are ‘moral bankruptcy’

Nicola Sturgeon and Mark Drakeford criticise UK government over mini-budget that ‘embeds unfairness’

Nicola Sturgeon’s government is likely to retain a higher 

top tax rate in next year’s budget.

 Photograph: Jane Barlow/PA Media

Severin Carrell 

Scotland editor

THE GUARDIAN
@severincarrell

Fri 23 Sep 2022 

The Scottish and Welsh governments have heavily criticised Kwasi Kwarteng’s tax cuts for the wealthy, opening up a deep gulf over taxation policies in different parts of the UK.

Nicola Sturgeon, Scotland’s first minister, described the UK chancellor’s decision on Friday to abolish the 45p top rate of income tax as “moral bankruptcy”, by helping the wealthiest, hammering the pound’s value and increasing public borrowing.

Mark Drakeford, her Welsh counterpart, said the changes “embed unfairness across the UK” by failing to give meaningful help to the very poorest. “Instead, they’re giving tax cuts to the rich, bonuses to bankers and protecting the eye-watering profits of energy companies,” he said.

Kwarteng’s corporation tax changes, dropping the planned rise to national insurance rates, the alcohol duty freeze and VAT-free shopping for international travellers will apply across the UK.

But under a series of reforms to the UK’s tax systems, the Welsh and Scottish governments set their own income tax rates, and also have independent property sales tax policies not affected by Kwarteng’s stamp duty changes.

Scotland, which is able to set income tax rates and bands, already has a higher top rate of tax for those earning more than £150,000, at 46p and, until Kwarteng’s changes come into force next year, a slightly lower tax burden on the lowest paid than in England and a slightly higher one for middle earners.

Sturgeon’s government is very likely to retain a higher top rate next year, underlining its centre-left credentials.

John Swinney, Scotland’s acting finance secretary, said: “The chancellor’s statement today will provide cold comfort to the millions of people across Scotland who have been looking for the UK government to use their reserved powers to provide support for those that need it most. Instead, we get tax cuts for the rich and nothing for those who need it most.”

Wales has to use the Treasury’s income tax rates and bands, but can change each band by up to 10p. That means the 45p top rate will also be scrapped in Wales, benefiting around 6,000 taxpayers and increasing the prospect that the Labour-led government may soon campaign for the same tax powers as Scotland.

Rebecca Evans, the Welsh finance minister, said: “Today’s announcements show the UK government is heading in a deeply worrying direction.”
Under the financial fairness rules agreed by the Treasury when tax powers were devolved, Scotland will receive about £600m and Wales about £70m in additional funding from the Treasury next year, because of Kwarteng’s announcement.

Both governments are likely to match the UK chancellor’s new income tax starter rate of £14,732 – which already matches one of Scotland’s intermediate bands. And they will face pressure to increase the threshold for property sales tax to £250,000, as well as discuss Kwarteng’s regional investment zones, where tax breaks will be offered.

Philip Whyte, the director of the centre-left thinktank IPPR Scotland, said the extra £600m in Treasury funding gave Scotland “a clear opportunity to strike a different course. It can do this by funding collective services and social security to protect those families most exposed to the cost crisis.”

The Chartered Institute of Taxation said that if Scotland’s income tax rates are not changed in the Scottish budget next year, someone earning £27,850 a year would pay £152.80 more in Scotland, while those earning £200,000 would pay £6,045.80 more.

The accountancy firm PwC said that since Scotland’s top-rate taxpayers produced 16% of overall income tax receipts, Kwarteng’s abolition of it would give Swinney “food for thought as [he] considers ways to remain competitive in terms of attracting those individuals to Scotland”.

UK

This ‘mini-budget’ is a naked exercise in redistributing wealth upwards


Instead of investing to actually grow the economy, Truss and Kwarteng are borrowing big to fund tax cuts for the rich

Kwasi Kwarteng leaves 11 Downing Street to deliver his mini-budget. 

Photograph: Aaron Chown/PA

Michael Jacobs

THE GUARDIAN
Fri 23 Sep 2022 

When is a budget not a budget? When the government does not want there to be any informed analysis of its economic impacts. The only reason the Treasury has insisted Kwasi Kwarteng’s statement was a “fiscal event” and not a budget – despite a range of measures far exceeding the contents of most budgets – is that, since George Osborne’s tenure, chancellors of the exchequer have been required by law to ask the Office for Budget Responsibility (OBR) to conduct an independent analysis of the measures taken.

And why has the government been so keen to avoid such scrutiny? Because the economic impacts are likely to look very ugly. It is more or less impossible to find an economist who supports the government’s approach, or an economic model able to justify it. Indeed, the financial markets have already given their negative verdict.

The problem is not the prime minister’s ambition to “grow the economy”. Many economists would actually agree with Liz Truss’s attack on “Treasury orthodoxy”, which has focused far too much on reducing public borrowing and debt, and not nearly enough on raising investment and productivity. The UK’s poor economic performance over the past decade has much to do with the tight fiscal policies pursued by Conservative chancellors.

But there are three big problems with the way Truss and Kwarteng are seeking to reverse these policies. First, the government’s attempt to stimulate the economy through income tax cuts is deeply inefficient. As the UK slides into recession, with businesses failing and unemployment rising, it is not unreasonable for the government to inject some demand into the economy to counteract those effects. But income tax cuts are a really poor way of doing this.

This is not simply about their distributional effect. As the Resolution Foundation has shown, by reversing the national insurance hike and abolishing the 45p tax rate on incomes above £150,000, Kwarteng has performed a remarkable act of redistribution to the rich. But the wider economic problem is that much of the tax cut will not lead to higher spending. Give households more money and they will spend some of it, but also save some. And the higher their income bracket, the more they will save.


A much better way of getting money into the economy is through investment. Wise investment – in infrastructure and business – will raise productivity, and therefore increase long-term economic growth. Investment creates jobs, and therefore raises wages and spending. Economists call the rate at which an injection of cash into the economy raises national income the “multiplier”. As the OBR has noted, the investment multiplier is around three times larger than the tax multiplier. Today the best form of stimulus is green investment, in areas such as home insulation and renewable energy, which would also help to reduce fossil fuel demand and meet the UK’s climate goals. (This is Labour’s plan, it might be noted.)

Second, cutting corporation tax (or not raising it as planned) and cutting stamp duty are really not good ways of stimulating economic growth either. There is almost no evidence that lower corporation tax stimulates investment. At 19%, the UK’s corporation tax is already the lowest in the G7, yet UK business investment is also the lowest. (Germany’s corporation tax rate is 30%.) Meanwhile, cutting stamp duty without building any more houses simply raises house prices – which are already growing at their fastest rate for 20 years. This will price more people out of the housing market, and benefit only existing homeowners.

Third, the fact that the government is using borrowing to pay for all these tax cuts makes them an even worse idea. At a time when the chancellor is tearing up his own government’s fiscal rules, it is worth noting that the one fiscal rule almost everyone accepts is the so-called “golden rule”: that, in normal times, governments should borrow only to invest. This is because investment generates growth, which helps repay the borrowing. Almost no economist would agree with borrowing to fund tax cuts. (This is not what Margaret Thatcher did: she only cut tax when there had been sufficient growth to fund it.)

In fact, the government’s fiscal strategy is even more extraordinary than this. The tax cuts announced will cost about £27bn next year, net of the oil and gas windfall tax already announced. The energy bills subsidy schemes for households and business will cost £60bn. Not yet announced, but very likely in the coming full budget, are spending increases: perhaps £18bn to maintain the real value of public service spending given inflation, and perhaps £25bn to raise defence spending from 2% to 3% of GDP. In total, it seems likely that the government will be borrowing up to £130bn more in 2023-24. Last year, the government borrowed £169bn (a historically high figure; before the pandemic it was about £50bn). So that is a remarkable 75% increase in borrowing.

Can the government borrow this much? Certainly. But only at a price. That price can already be seen in the yields purchasers of government bonds (“gilts”) are now demanding. Already today, UK bond yields are up sharply, having already been rising for the past couple of weeks since the new government took office. Coupled with the interest rate rise announced by the Bank of England on Thursday (with more almost certainly still to come), that makes the government’s borrowing more expensive, creating an even bigger deficit.

And that’s not the only reaction of the financial markets. Over the past two weeks the pound has fallen to its lowest level against the dollar for 20 years, and it is also down against the euro. It fell again after the chancellor’s speech. The markets are signalling their anxieties about the government’s strategy and its impact on the economy. Why does this matter? Because a lower pound raises import prices, thereby pushing inflation up. And it also makes gas (which is priced in dollars) more expensive, thereby raising the cost of the government’s energy bills scheme even higher.

This is a potent brew of economic reaction. There is open talk now of a possible run on the pound, and gilt yields rising even further. A former member of the Bank of England monetary policy committee said this week that if he were an investor he would short (bet against) the pound. If their radical fiscal plan goes wrong, Truss and Kwarteng might find themselves shorted in the political markets.

Michael Jacobs is professor of political economy at the University of Sheffield

Analysis

History suggests Kwarteng’s gargantuan economic gamble won’t end well

The belief that low taxes and light-touch regulation are good for everyone is about to be tested to the limits

Kwasi Kwarteng leaves 11 Downing Street in London before 

delivering his mini-budget statement in the House of Commons. 

Photograph: Kirsty Wigglesworth/AP


Larry Elliott

THE GUARDIAN
Fri 23 Sep 2022 

A struggling economy. An unpopular Conservative government. A dramatic change of course. Britain has been here before. Just like Reginald Maudling in the early 1960s and Tony Barber in the early 1970s, Kwasi Kwarteng has gone for broke, with a massive package of tax cuts designed to put Britain on a higher growth path.

The chancellor will be crossing his fingers that his experiment has a happier ending than those of his predecessors, neither of which ended well. It is one huge gamble on supply-side reforms boosting enterprise, tax cuts paying for themselves, and the financial markets remaining onside. The initial reaction from the City was far from reassuring.

As was only too predictable, sterling took a thumping on the currency markets. City currency traders might well be among the big beneficiaries of Kwarteng’s tax cuts but that didn’t stop them selling the pound down through the $1.10 level against the US dollar. Parity against the US currency is not that far away.

No question, this was a big package, a full-scale budget in all but name. Kwarteng delivered on all the tax pledges made by Liz Truss during her leadership bid – and more. The 45% rate of income tax for the highest earners has been scrapped; a reduction in the basic rate from 20% to 19% pencilled in by the former chancellor Rishi Sunak for 2024 has been brought forward by a year.

Put together with the removal of the increase in national insurance contributions and the decision not to go ahead with next April’s increase in corporation tax and you get a £45bn giveaway, not quite as big as Barber’s in 1972 but hefty by historical standards.

As the Institute for Fiscal Studies pointed out, this was a deeply regressive mini-budget, with the biggest percentage gains going to the top 1% of earners. The much more modest help for those on the lowest incomes will be wiped out by the higher cost of imported fuel and food caused by a weaker pound.

Kwarteng’s insistence that the government was committed to fiscal responsibility was greeted with derision from Labour MPs, particularly given the lack of independent scrutiny of the chancellor’s arithmetic from the Office for Budget Responsibility. Such an exercise might have questioned the newfound belief in the Treasury that new investment zones, slashing red tape, tougher welfare rules and an end to the bankers’ bonus cap will raise the trend rate of growth to 2.5%.

In effect, the mini-budget was a triumph for free-market thinktanks, such as the Institute for Economic Affairs and the Adam Smith Institute, which are true believers in the idea that low-tax, light-touch regulation, small-state economies are not just good for the rich but good for everyone.

That conviction is going to be tested to the limits in the months ahead. Britain has inflation at close to 10% and to the extent it boosts demand, the mini-budget will add to inflationary pressure. It will do nothing to discourage the Bank of England from continuing to raise interest rates and if borrowing costs go as high as the markets are predicting the sugar rush will be short-lived.

What’s more, the main beneficiaries of the package will be the better off; the politics of the package depend heavily on less well-off voters being convinced of the theory of trickle-down economics. They might take some persuading.

But the biggest immediate threat to the chancellor comes from a crashing pound and soaring bond yields. No chancellor can avoid the scrutiny of the financial markets, which is why Kwarteng’s gamble has only two feasible outcomes: complete success or abject failure. History suggests it won’t be the former.

UK

Has Liz Truss handed power over to the extreme neoliberal thinktanks?

The prime minister is in hock to a group of rightwing lobbyists who are themselves indebted to oligarchs and corporations

‘To a greater extent than any previous leader, Liz Truss’s politics have been shaped by organisations that call themselves thinktanks, but would be better described as lobbyists who refuse to reveal who funds them.’ 

Photograph: Anadolu Agency/Getty Images

George Monbiot
Fri 23 Sep 2022 

Who chose Liz Truss? Conservative party members, of course. Who are they? Disproportionately rich, white, older men living in the south of England. But there are some members whose profile we have no means of knowing. They don’t live in the UK, have never been residents or citizens here and have no right to vote in our elections. Astonishingly, since 2018 these foreign members have been permitted to determine who the UK prime minister should be.

The Conservative party’s rules of association are an open invitation to anyone who wants to mess with our politics. There seems to be nothing to stop agents of another government from registering as members with Conservatives Abroad. Nor, it seems, is there anything to stop one person (or one botswarm) applying for multiple memberships. So much for the party of patriotism, sovereignty and national security.

This open invitation, to judge from the little information we can glean, has yet to be fully exploited. Perhaps foreign governments haven’t yet realised what a golden opportunity they’ve been given. Perhaps they simply can’t believe how irresponsible the Tories are.

But we don’t need to suggest a campaign by another state to see Truss as a kind of Manchurian Candidate, subverting what remains of our democracy on behalf of undemocratic interests. As a rule, the more loudly a politician proclaims their patriotism, the more likely they are to act on behalf of foreign money. Every recent Conservative prime minister has placed the interests of transnational capital above the interests of the nation. But, to a greater extent than any previous leader, Truss’s politics have been shaped by organisations that call themselves thinktanks, but would be better described as lobbyists who refuse to reveal who funds them. Now she has brought them into the heart of government.

Her senior special adviser, Ruth Porter, was communications director at the Institute of Economic Affairs (IEA), an extreme neoliberal lobby group. An investigation by the democracy campaign Transparify listed the IEA as “highly opaque” about its funding sources. We know from a combination of leaks and US filings that it has a history of taking money from tobacco companies and since 1967 from the oil company BP, and has also received large disbursements from foundations funded by US billionaires, some of which have been among the major sponsors of climate science denial. When she worked at the IEA, Porter calledfor reducing housing benefit and child benefit, charging patients to use the NHS, cutting overseas aid and scrapping green funds.


How the right’s radical thinktanks reshaped the Conservative party

She then became head of economic and social policy at Policy Exchange, which was also listed by Transparify as “highly opaque”. Policy Exchange is the group that (after Porter left) called for a new law against Extinction Rebellion, which became, in former home secretary Priti Patel’s hands, the Police, Crime, Sentencing and Courts Act. We later discovered it had received $30,000 from the US oil company Exxon.

Liz Truss, according to the head of the IEA, has spoken at more of its events than “any other politician over the past 12 years”. Two of Truss’s meetings with the organisation were deleted from the official record, then reinstated after the deletions caused a scandal.

More importantly, Truss was the ostensible founder, in 2011, of the free enterprise group of Conservative MPs. The group’s webpage was registered by Ruth Porter, who at the time worked for the IEA. The IEA organised events for the group and supplied it with media briefings. Twelve members of the current cabinet, including several of its most senior figures, belonged to the group. Today, if you try to open its webpage, you are redirected to the Free Market Forum, which calls itself “a project of the Institute of Economic Affairs”.

Truss’s chief economic adviser is Matthew Sinclair, formerly chief executive of a similar lobbying group, the Taxpayers’ Alliance. It is also funded obscurely by foreign donors. Sinclair wrote a book called Let Them Eat Carbon, arguing against action to prevent climate breakdown. It claimed that: “Equatorial regions might suffer, but it is entirely possible that this will be balanced out by areas like Greenland.” In other words, we can trade the lives of billions of people against the prospects of some of the least inhabited places on Earth. It’s among the most callous and ignorant statements I’ve ever seen.

Truss’s interim press secretary, Alex Wild, was research director at the same organisation. Her health adviser, Caroline Elsom, was senior researcher at the Centre for Policy Studies, which was listed by Transparify as – you guessed it – “highly opaque”. Her political secretary, Sophie Jarvis, was head of government affairs at the Adam Smith Institute (also “highly opaque”), and funded, among others, by tobacco companies and US foundations.

These groups represent the extreme fringe of neoliberalism. This maintains that human relationships are entirely transactional: we’re motivated above all by the pursuit of money, which shapes our behaviour. Yet, hilariously, when you challenge them about their funding, they deny that the money they receive influences the positions they take.

For decades, policy development on the right was shaped as follows. Oligarchs and corporations funded the thinktanks. The thinktanks proposed policies that, by sheer coincidence, suited the interests of oligarchs and corporations. The billionaire press – also owned by oligarchs – reported these policy proposals as brilliant insights by independent organisations. Conservative frontbenchers then cited the press coverage as evidence of public demand: the voice of the oligarchs was treated as the voice of the people.

In his autobiography Think Tank, Madsen Pirie, founder of the Adam Smith Institute, explained how it worked. Every Saturday, in a wine bar in Leicester Square, staff from the Adam Smith Institute and the Institute of Economic Affairs would sit down with Conservative researchers and leader writers and columnists from the Times and Telegraph to plan “strategy for the week ahead” and “co-ordinate our activities to make us more effective collectively”. The Daily Mail weighed in to help the lobbyists refine their arguments and ensure there was a supportive article on its leader page every time they published a report.

But now the thinktanks don’t need a roundabout route. They are no longer lobbying government. They are the government. Liz Truss is their candidate. To defend the interests of global capital, she will wage war against any common endeavour to improve our lives or protect the living planet. If Labour is looking for a three-word slogan with which to fight the next election, it could do worse than “Mend This Country”.

George Monbiot is a Guardian columnist

UK

Who wants Liz Truss’s bonfire of net-zero red tape? Not big business, for a start

The Tories were once the party of business. Now all they know how to do is drag Britain back to the 1980s
 

‘Cheap, secure, renewable energy looks increasingly key to big business’s 

ability to keep turning a profit.’ 

Photograph: Owen Humphreys/PA

Gaby Hinsliff

THE GUARDIAN
Fri 23 Sep 2022

If Liz Truss believes wholeheartedly in one thing, it’s that nobody likes being told what to do. People don’t want to be nagged about their weight, or nudged to eat less and move more. They don’t want to be told what they can say on social media. And above all, businesses want to be free to make piles and piles of money, unhindered by regulation and red tape and what David Cameron famously called “green crap”. But when she said she didn’t mind making herself unpopular in the process of unleashing all that growth, she didn’t mean with the people doing the growing.

What to make, then, of the fact that this week more than 100 big corporate names from Ikea to Amazon, Coco-Cola and Sky signed an open letter urging the government not to backtrack on net zero, following hints that Truss might be considering doing exactly that? This wasn’t in the script, either for the deregulatory right or arguably that part of the left convinced that capitalism loves nothing more than warming its rapacious hands over a bonfire of crackling red tape, while watching the planet burn. What, exactly, is going on?


CEOs aren’t monsters, obviously. They see the same fires and floods and droughts on the news as everyone else, and presumably have the same teenage children berating them at breakfast. They know that being seen to go green matters both to younger customers and employees, with generation Z increasingly squeamish about working for brands their friends consider toxic.

For some, like a water industry enduring its driest summer in 30 years, the climate crisis already represents a direct threat to their operations; others, like renewable energy providers, have built their businesses around decarbonisation. But what has really changed, following the conflict in Ukraine, is that big business is now significantly more worried about rocketing fossil fuel prices. Cheap, secure, renewable energy looks increasingly key to their ability to keep turning a profit.

That said, it would be naive to imagine that big polluters aren’t already lobbying this new government to water down some net zero policies, or that plenty of companies didn’t have tweaks they’d like to make. But there is a surprisingly big swathe of business that would be rattled by a sudden change of direction now.

The letter was organised by the Cambridge Institute for Sustainability Leadership (CISL), whose recent poll of 700 senior business leaders found nearly 70% already had their own company net zero plans (some doubtless more convincing than others, but that’s another column) and 80% had earmarked funding. Telling them at this late stage that actually they needn’t have bothered spending the money seems more exasperating than liberating.

The same is true of scrapping the sugar tax now, after companies have already been through the pain barrier of reformulating snacks and fizzy drinks to avoid the tax. Sometimes red tape isn’t just about protecting the public but creating stable and predictable conditions in which to make money, plus a level playing field of obligations where well-run companies aren’t undercut by bad ones or made to feel like suckers. Almost three-quarters of respondents to the CISL poll, tellingly, said that far from being a drag, regulation mattered to their company’s business model.

True, it often shifts costs from the state on to business, which business naturally resents. But the logical, if unpopular, corollary is that scrapping it just shunts those costs back on to taxpayers, something the government seems rather less keen to discuss. As Polly Mackenzie, the former chief executive of the thinktank Demos, tweeted recently, you can scrap the rules that stop businesses fuelling things such as obesity or workplace stress or air pollution but “your health costs are going to be massive”, quite apart from the human suffering caused. Someone still has to pay: it’s just a question of who.

Mackenzie knows this territory well, having been a Liberal Democrat special adviser in the 2010 coalition government, whose own much-hyped bonfire of red tape fizzled out when it emerged that most rules actually exist for a reason, and the reason is often that people like them. One early candidate for scrapping was apparently rules governing the flammability of children’s nightwear, on the grounds that most families now have radiators not riskier open fires. But still, is anyone crying out for kids’ pyjamas that go up in flames more readily? Is that really what progress means?

Even rules that were fiercely resented at first tend to settle in over time, becoming part of the wallpaper. The working time directive, which protects employees from being forced to work more than 48 hours a week, was controversial back in 1998 when it was first introduced. But binning it – as Jacob Rees-Mogg is reportedly considering – feels curiously last century now, in a world where companies anxious to boost productivity are instead experimenting with four-day weeks.

The idea of freedom, or getting the government the hell out of your life, remains a heady one and for many leavers was part of the itch to Brexit. But if it still thrills a certain kind of Tory voter, it feels increasingly retro. We’ve come a long way from the days when greed was good, lunch for wimps and caring about the planet strictly for hippies. If you want to drag Britain back to the 1980s, don’t expect us to come quietly.

Gaby Hinsliff is a Guardian columnist

UK

‘Helping the rich’: mini-budget brings fear and anger to PM’s home patch

Residents in the Leeds suburb of Roundhay, where Liz Truss went to school, express their views

Liz Truss leaves Downing Street as the chancellor prepares to deliver the government’s mini-budget. Photograph: Aaron Chown/PA

Robyn Vinter

THE GUARDIAN
@robynvinter

Fri 23 Sep 2022 

On the high street in the leafy suburb of Roundhay, where Liz Truss went to school and her parents still live, there is a sense of frustration, and even anger, at the measures announced in Friday’s mini-budget.

Catherine Brittain, a childminder, was forced to negotiate with her energy provider, which upped her bills from £109 a month to £350. She was able to agree to pay £200 until after Christmas.

She said: “I can’t afford to pay more. I’m worried about the cost of living and at the moment I haven’t passed that on to parents but I’m not sure how much longer I can keep it up.”

Worried about the cost of living: Catherine Brittain, 

a childminder in Roundhay, Leeds. 

Photograph: Richard Saker/The Guardian

She needs to provide a warm home for the children she cares for, as well as meals, and it comes at a cost.

“I’m not a charity. I could charge more but I charge what I think is fair.”

Brittain is worried about the ability of Truss – “a vile human being” – and her cabinet to prevent a huge economic crisis and is sceptical of the chancellor Kwasi Kwarteng’s tax reforms.

Kwarteng revealed a surprise cut to income tax, scrapping the additional rate, which saw high earners paying 45% on any income over £150,000. He also brought forward a planned 1% cut in the basic rate of income tax from 2024 to next year.

“They’re just helping the rich and maybe a few crumbs eventually dribble down to us.

“We need a windfall tax, otherwise we’re just going to pass on these debts to our children.”

Last month, Sade Scales’s monthly direct debit for her gas and electricity rose from £65 to £89 overnight. It might not seem like much compared to what some people are paying but working as a part-time carer in Leeds while looking after a disabled child, any further rises will hit her hard.

“I’ve got some credit on my energy account but I’ve had to cut back,” she said. “I think I’m going to need extra money this winter since it’s just going to get worse.”

She was frustrated that other countries, such as France, had been largely insulated from energy price rises by government policies. In January, the French government capped price rises from the state-owned energy company EDF at 4%. It also made a one-off payment of €100 (£84) last year to the poorest 5.8m households.

Scales added: “It’s not our fault. It’s like, why are you taking it out on us? There has to be a cut-off point.”

Her friend Sandra Smith, a parent and carer, agreed.

‘It’s not our fault,’ says Sade Scales, left. She and her 

friend Santra Smith, right, are carers in Leeds.

 Photograph: Richard Saker/The Guardian

“A lot of my single friends are not doing well. It’s a struggle, they’re living month to month. I haven’t got much faith that anything is going to get better,” she said.

Smith was also frustrated to hear about plans to force universal credit claimants into working more hours, as a former recipient who knows how difficult it is to survive on what is offered.

Kwarteng announced claimants working less than 15 hours a week would be penalised if they were not seen to be trying to get more work, in an effort to “get Britain working again”.

Smith said: “Universal credit is the worst thing ever. All your money is conjoined together instead of being allocated for different things. When I was on it, I’d only have £300 left over after paying rent and that didn’t include bills. It puts people at risk.”

It is a particularly strange announcement, she said, given that unemployment rates are at historic lows and most universal credit recipients are in work. In addition, she said, pushing claimants to take on more work is already happening.

“I did 15 hours and they were pushing me to do 25. I actually wanted to work more but it was so hard to get childcare. They don’t help you. The whole system is discouraging,” she said.

“You might need an advance to pay for something up front and they can just refuse you if they don’t feel like the reason is satisfactory.”

Scales added: “You can see why people turn to crime. It’s quick money.”

Nearby at the well-loved Leeds attraction Tropical World, an indoor wildlife park and aquarium, Kwarteng’s measures were equally unpopular.

Katie Fenton-Green, a PE teacher on maternity leave, echoed the sentiments on the high street. “It hasn’t hit us yet but we are more worried than normal. I’ve been looking into merino wool blankets for the baby.”

Katie Fenton-Green, a PE teacher, with her daughter, Nell, at Tropical World in Roundhay. 

Photograph: Richard Saker/The Guardian

Her wife works full time for ITV, which recently gave staff a cost of living bonus. But she is annoyed at the lack of measures in the budget to address energy company profits while people struggle.

“I just don’t feel that the cost is justified while companies are declaring a profit. It would be understandable if the companies were struggling but they’re not, and the government just seems to be helping those who are well off.”

Even those who expect to benefit from the mini-budget cannot make sense of it.

Sam Smith with his daughter Mabel.

 Photograph: Richard Saker/The Guardian

Sam Smith, an accountant, and his partner Tia McKeon, who works in digital marketing, would be better off under the chancellor’s plans to scrap a rise in national insurance payments.

“It sort of feels unnecessary,” Smith said. “Most people wouldn’t mind helping out more where they can and we’re not people who are struggling. It’s always the worst-off who are most affected, though I don’t know what the other option is.”

This article was amended on 23 September 2022. An earlier version said that the energy price cap announced by Liz Truss earlier this month “only benefits those spending over £2,500 a year”. The price cap is a limit on the unit cost of electricity and gas, not on overall bills; and the £2,500 a year figure relates to the average amount that a typical household in Great Britain will pay under the new cap.

UK MINI BUDGET

‘What do they expect me to do?’ Part-time workers dismayed by benefits rule changes

Childcare, health problems or other constraints mean taking action to boost earnings will be a struggle

A woman looks at vacancies at a job centre. The changes to benefit rules require claimants working up to 15 hours a week action to boost their earnings. 

Photograph: Rui Vieira

Julia Kollewe

THE GUARDIAN

Fri 23 Sep 2022

Part-time workers have reacted with dismay at the tightening of rules that could result in a cut to their benefits unless they work longer hours or take steps to increase their earnings.

The changes, which that come into force in January, will require claimants who work up to 15 hours a week (24 hours a week for couples) to take action to boost their earnings. The current threshold is nine hours, but this goes up to 12 hours a week on Monday, and 19 hours a week for couples.

In his growth plan aimed at kickstarting the economy that he unveiled on Friday, the chancellor, Kwasi Kwarteng, said the change would affect 120,000 people on universal credit who were in work on low earnings. “They will be expected to actively search for work and attend weekly or fortnightly appointments at a job centre in order to secure more or better paid work, or they could have their benefits reduced,” he said.
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Jess Philips, Labour MP for Birmingham Yardley, tweeted that the changes would hurt women most. “Women! That’s who this hurts. Women are more likely to work part-time. If chancellor had to pay the billions of pounds of free labour women do he would be borrowing even more dangerous amounts,” she wrote.

A number of part-time workers, some over the age of 50, contacted the Guardian to say they would struggle to increase their hours because of health problems, childcare or other constraints.

Sarah Card, 49, a single parent who works as a behaviour support assistant at a secondary school in Bradford, said: “As I work in a school, I can’t just increase my hours. I have asked about extra hours, but a full-time position would mean starting before 8am and I simply can’t do that due to travel and childcare options not being available so what does the government expect me to do? I will always check things out [jobs], but generally it’s not feasible.”

She added: “I have three young children, the youngest still being at primary school, so the part-time hours fit in perfectly with the school run. Now I’m being told I need to earn another 50% on top from this month and even more from January.”

Card has been working 10 hours a week as a lunchtime assistant after being made redundant from her job as a teaching assistant at her daughter’s primary school. After she lost that job, she had to attend weekly appointments at a job centre out of town, which involves two bus rides and takes about an hour.

“That’s a whole morning for a five-minute appointment. I do not drive so I’m reliant on public transport which not only has increased in price but the services I use have been cut back so I’m restricted with where I can travel to.”

During the school holidays, she sometimes takes her children, aged nine, 11 and 12, to the job centre with her. She also has three grownup children. Card hopes that in future, some of those meetings with a job coach can be done by phone.

Card starts work at 11.45am and finishes at 2pm, giving her an hour and a half before she has to pick up her daughter from primary school. “With my children being the ages they are – we do homework, baths, dinner, then bed – how am I supposed to fit in the 20 hours of job searching each week?”

She added: “I’ve got a job that fits in with my life, and I’m not asking for things to be handed to me.” Card plans to apply for a full-time job once her youngest child starts secondary school in two years’ time.

On top of her £350 gross monthly salary, Card receives £1,410 a month in universal credit. Her rent is £575 and her energy bills are about £300 a month. Her former partner was paying her a similar sum in maintenance every month, but that has stopped because he had an accident and is on statutory sick pay. Adding to her worries, her landlord is selling so she has to find a new home, which is not proving easy.

A 62-year-old chef, who is looking for part-time work and has some health problems, said: “You cannot force people to work longer hours when they cannot physically do so. Plus it does not promote more productivity, in fact quite the opposite – ask any business owner.”

Kwarteng throws UK on sacrificial altar of Trussonomics where only bankers win

John Crace

THE GUARDIAN

23/9/22

Chancellor maxes out with morally bankrupt budget that is anything but mini

Kwasi Kwarteng. What a guy! On Monday he put the fun into funeral with a few gags at Westminster Abbey. On Friday he puts the fizz into fiscal with an event – we would call it a budget were it not for the chancellor having gone out of his way to make sure the Office for Budget Responsibility couldn’t supply any figures to fact-check his economics – that was so high and wild we may never see another. To infinity and beyond! A mini-budget that was anything but mini.

Casino faith-based economics on which he’d bet the bank. The biggest tax giveaway – primarily to the rich – in 50 years while increasing government borrowing to record levels. Time was when Labour used to get it in the neck for uncosted public borrowing. That’s now so last month.


All you have to do now is believe and everything will be OK. It’s the new economics for Brexit Britain. You want growth, you get growth. And if you don’t, then it will be everyone else’s fault for talking Britain down. The country has just been turned into a laboratory experiment for a plan dreamed up by the rightwing Institute of Economic Affairs. Kwarteng does believe. Primarily in himself. His self-confidence is remarkable for a man of relatively ordinary talents. Someone who had always got by with a few glib words. Who could talk the talk but had never been asked to walk the walk. Now was his time to put up. To throw the country on the sacrificial altar and keep his fingers crossed he hadn’t blown it. To boldly go where no man had gone before. Primarily because it was so obviously disastrous.

Some Tories had the grace to look embarrassed, but not Librium Liz.

 Photograph: Jessica Taylor/AP

But this is the brave new world of Trussonomics.It’s like turning on all the taps at once and being surprised when you flood the house.

The Commons was still packed but this was no normal budget statement. There were no flourishes, no long buildup of how brilliant the government had been. And no loud cheering from the Tory benches. Most MPs looked sick. Apprehensive even. Unsure of how they were going to sell this latest Tory iteration to their constituents. Half of the personal tax cuts going to the richest 5% might not be quite the policy to win the hearts and minds of “red wall” voters.

Kwarteng got straight to business. So much to announce, so little time to do it. Tax was too high! Growth was too low! The government had let the economy stagnate. He wasn’t sure what the government had been in the past 12 years, but he and Librium Liz had definitely played no part in it. Which was odd, as most of us could remember them both having been cabinet ministers who had voted for measures they were now trashing. And who had several times made a point of highlighting the dangers of government debt.

Like Truss, Kwasi is a tabula rasa. Free to reinvent himself, unmoored to the past. “We are at the beginning of a new era,” he said. Weirdly, he even sounded as if he believed it. That people really are ready to forgive and forget. To consider this government as Year Zero rather than the continuation of the several failed ones that preceded it. No one else in the chamber seemed to share this view. Some Tories had the grace to look embarrassed. Librium Liz just looked blank. Then she often does. Maybe she too couldn’t quite accept she was getting away with it.

The chancellor moved on to the remedies. First up was loads more borrowing. He couldn’t say how much. And it would be rude to ask. Then on to deregulation. It must be easier to treat workers worse. After all, if people weren’t earning enough it was entirely their own fault for not having a better-paid job. And what about the poor bankers? They hadn’t been able to afford their second homes while their bonuses had been capped. Time to free the Goldman Sachs elite.

Then Kwarteng got on to tax. There was far too much of it. If he had his way no one would be paying a penny. It would be up to everyone to either sink or swim. There were far too many people idling around, relying on schools and the NHS. But he couldn’t bring himself to cut taxes completely. So he was just going to do so for the most well off. Because that was obviously the fair thing to do.

This was a budget devoid of moral purpose. Even Boris Johnson hadn’t sunk this low. It’s come to something when Kwarteng now finds himself lower on the ethical balance sheet to The Convict. Though it’s all of a piece. Every time you think the government couldn’t possibly sink any lower it finds new, creative ways of doing so.

Labour’s Rachel Reeves put in a decent reply – her highlight was chucking the six previous failed Tory growth plans across the dispatch box and asking why the new one should be any better – but she lacked a bit of edge. Almost as if her whole speech had been pre-written and she wasn’t able to grasp just how reckless the Tories were being. A little more ad-libbing wouldn’t have gone amiss.

For the Tories, only John Redwood and Richard Drax were wholly enthusiastic. This was all their wet dreams come at once. Others, such as Mel Stride and John Glen, were openly sceptical. Of Johnson, Rishi Sunak and Michael Gove, there was no sign. They are now non-people. Long before the end, every Tory MP had melted away and Kwarteng was left to take questions from opposition backbenchers.

The chancellor looked increasingly lost and lonely. His self-confidence had definitely taken a hit over the past two and a half hours. Not least because the markets had responded to his mini-budget with a resounding thumbs down. Not even Kwasi could wholly convince himself now that he knew something no other financial analyst did. Though give him a day or so …

Explainer

Banks among biggest beneficiaries of Kwarteng’s mini-budget


From scrapping the cap on bonuses to slashing red tape, the chancellor unveils a raft of policies he says will boost economic growth

Kalyeena Makortoff

Banking correspondent
@kalyeenaFri 23 Sep 2022 

Banks will be among the biggest beneficiaries of Kwasi Kwarteng’s mini-budget after he announced a raft of policies to help costs, boost profits, lure staff, fuel house prices and slash red tape.

Scrapping the banker bonus cap

One of the more controversial announcements on Friday was the decision to scrap the EU banker bonus cap, which has limited payouts to two-times workers’ salaries since 2014.

The rules were meant to end a bonus culture that prioritised short-term profits over longer-term stability in the run-up to the financial crisis. But Conservative politicians, including then chancellor George Osborne, railed against the cap from the start, warning it would harm competitiveness and increase banks’ fixed costs.

The new government is taking advantage of Brexit to scrap the cap, in a move likely to be be welcomed by employers who use variable pay to slash costs in slower years.

However, headhunters warn the effect will be marginal and unlikely to create more jobs or lure many high-earning bankers to the UK, given European staff tend to enjoy the reliability of salary-focused income, while US bankers are unlikely to leave New York for the same pay in London.

The decision to lift the cap perplexed some bank bosses who said they had not lobbied for the change, nor were they consulted on the proposals.

In the meantime, high-earning City bankers will still have an income tax reduction to look forward to.

Cutting stamp duty to prop up the housing market

   

Lenders have been accused of being slow to pass on rate rises 

to savers while increasing mortgage rates for borrowers. 

Photograph: Clynt Garnham Business/Alamy

Rising interest rates will boost banks’ net interest margins – which are a key measure of profitability and account for the difference between what is charged for loans and paid out for deposits. Lenders have been accused of being slow to pass on rate rises to savers while increasing mortgage rates for borrowers.

Liz Truss’s team’s decision to incentivise prospective homebuyers by doubling the threshold at which they start paying stamp duty to £250,000 will also prop up the housing market, which has showed signs of slowing. They have also increased that figure from £300,000 to £425,000 for first-time buyers.

Lloyds Banking Group, which owns Halifax and is the UK’s largest mortgage lender, said in July that it expected its rate of lending to grow by single digits over the next 12-18 months in light of forecasts of a soaring interest rate.

However, a cut to stamp duty is likely to push lenders’ forecasts higher when they release third-quarter results in October and increase profit expectations.
Slashing red tape

The chancellor also trailed “an ambitious package of regulatory reforms” that he said would be revealed this autumn. It is unclear whether this will be in addition to the financial services bill, which will essentially repeal EU financial regulations.

Some of the biggest changes already in train involve forcing regulators to consider the “competitiveness” of firms when applying UK regulations, rather than just whether they are treating consumers fairly or holding enough capital to cushion against potential risks. That is despite economists warning it is an inappropriate throwback to pre-crisis conditions.

And despite Kwarteng stressing that he considers the independence of the Bank of England to be “sacrosanct”, the government is still planning to give itself powers “to direct a regulator to make, amend or revoke rules where there are matters of significant public interest” – a move that could also benefit the City firms lobbying for changes to UK rules.

Cancelling corporation tax hikes

Kwarteng also confirmed the government would hold corporation tax at 19%, rather than raising it to 25% as originally planned by the former chancellor Rishi Sunak.

That move alone is expected to save City firms a combined bill of £4.5bn between 2023 and 2025, according to analysis compiled by the House of Commons Library.

However, Kwarteng is cancelling a planned reduction in the additional bank surcharge that was meant to offset the corporation tax rise, meaning it will stay at 8%, rather than dropping to 3% next year. Smaller lenders including the Co-operative Bank will still benefit from a higher threshold, with the chancellor promising the surcharge will only apply to lenders earning at least £100m, rather than £25m.

The combined rate of tax for most banks and building societies, however, will stay at 27%.

Bills freeze to keep companies afloat

Fears of widespread corporate failures among business borrowers were growing, with companies more exposed to price fluctuations than households since they do not benefit from the UK’s energy cap.

But Truss’s decision to cut the unit price of energy for businesses for at least six months means banks will be less worried about businesses going under, shielding them from a potential sharp increase in defaults.