BETA filters Key Events (2) Paul Johnson, director of the Institute for Fiscal Studies, told the Today program that Liz Truss’ economic policies would increase inflation. Referring to her argument that a new economic approach is needed because growth has been so weak over the past decade or more, she said: He is clearly absolutely right that we have had tremendous growth over the last 15 years. The but is that simply cutting taxes, cutting national insurance contributions, for example, is not a growth strategy. And it’s clear that it’s pumping a lot of money into the economy on top of the £30 billion we’ve already had to support energy bills, on top of probably many, many tens of billions more to come [on top of] that, and on top of that will need to be more money for public services. Now combine all this and it will lead not only to extremely high borrowing in the short term, but also to additional inflationary pressure.
The leadership contest lasted “a long time,” says the treasurer of the 1922 Commission
Many of us felt that the Tory leadership contest had gone on for too long and Sir Geoffrey Clifton-Brown, a senior figure in the party apparatus, told the Today program this morning that he agreed. Clifton-Brown, treasurer of the 1922 backbench committee, said there should be a “review” of the timetable before the next competition. He explained: I would shorten the membership process in the country. There was no reason it couldn’t be shortened. We could have had more than one tour per day. I think it’s been a long time. Clifton-Brown also said that, despite being a member of the 1922 executive committee, he did not yet know the result, which is announced publicly at 12.30pm. He said: I suspect that Sir Graham[Bradychairmanofthe1922Committee)knowsbutasalwaysiscompletelyinscrutableonthesematters[BradyπρόεδροςτηςΕπιτροπήςτου1922)τοξέρειαλλάόπωςπάνταείναιεντελώςανεξερεύνητοςσεαυτάταθέματα[Bradychairmanofthe1922Committee)knowsbutasalwaysheiscompletelyinscrutableonthesematters
Liz Truss reportedly plans to freeze energy bill after expected election as new Tory leader and next prime minister
Good morning. Parties organize leadership contests so that candidates can define their policies and members can choose what they like best. However, the Conservative party’s vote, which will conclude today with Liz Truss chosen as the new leader to replace Boris Johnson as prime minister after an audience with the Queen tomorrow, has seen that process reversed. The cost of energy will be the biggest crisis for the next prime minister, but Truss and her rival Rishi Sunak spoke only broadly about how they would handle it and Truss yesterday, in her BBC Sunday interview with Laura Kuensberg even suggested to her that it wouldn’t be right to say what she was going to do. Sounding like the chancellor before Budget day, Truss said: What I want to reassure people is that I will act, if elected prime minister, within a week. Now, what I can’t do, Laura, on this show, is tell you exactly what that announcement would be… It would be completely wrong. Truss argued her reticence was justified because she had not yet been confirmed as captain and suggested she needed an update from the No 10 before she could make any final decisions. Well, maybe. But perhaps Truss is also nervous about confirming that her first act as Prime Minister will be to announce a freeze on energy bills – a policy proposed by Labor last month, and also backed by Gordon Brown (who was regularly quoted by Truss during the campaign as a representation of the kind of economic policy he rejected). The Trust has not confirmed that it will introduce any sort of freeze on energy prices. But she didn’t deny that she was thinking this in her interview with the BBC yesterday and there are many reports in the papers this morning saying she is planning to. In their dive for the Daily Telegraph, Ben Riley-Smith and Tony Diver report that “campaign sources familiar with the discussions and energy house insiders consulted said some form of freeze is now expected”. They continue: Scottish Power has proposed a £100bn plan for a two-year freeze on energy bills, funded by loans underwritten by the Treasury. The proposal is supported by other energy companies. An energy company source said the idea had been “extremely actively looked at” by Truss’s campaign figures and that Kwasi Kwarteng, the Business Minister tipped to become chancellor if Mrs Truss wins, seemed “very open” to options for freeze. A second industry source confirmed the proposal was being scrutinized by the Truss campaign. Members of the Truss team told The Telegraph as much. One said: “I’m sure a mechanism will be introduced to freeze accounts.” Another said the idea had been discussed “quite a bit in the last fortnight”. The specifics of such a freeze on energy bills – exactly who would benefit, for how long, at what price level and the extent to which the taxpayer would cover the cost – remains a point of debate, according to sources. And in the Times Geraldine Scott, Oliver Wright and Henry Zeffman report the same. They say: Senior Tories lined up for appointments to the Truss cabinet have been told “in no uncertain terms” not to scorn the idea that energy bills could be frozen. Industry sources said the consumer price freeze was “the only conversation anyone has had with the government”, including discussions involving Kwasi Kwarteng, who is expected to be the Truss chancellor. “The plan is to introduce some kind of artificial price cap for consumers combined with a mechanism to compensate suppliers,” said one source. “Plans have progressed quite well and include not only civil servants but also ministers lined up for Truss jobs.” The Conservative party will announce the results of the leadership contest at 12.30pm. at the QEII Center in London. The winner will then make a short speech but will not officially become prime minister until after Johnson tenders his resignation to the Queen at Balmoral tomorrow. My colleague Archie Bland used the First Edition update to explain how the first week, first 100 days and first year might play out for Truss if, as expected, he is the winner. I’m trying to follow the comments below the line (BTL) but it’s impossible to read them all. If you have a direct question, include “Andrew” somewhere and I’m more likely to find it. I try to answer questions and if they’re of general interest I’ll post the question and answer above the line (ATL), though I can’t promise I’ll do it for everyone. If you want to get my attention quickly, it’s probably best to use Twitter. I’m on @AndrewSparrow. Alternatively you can email me at [email protected] Updated at 08.50 BST
