MPs are likely to be recalled to parliament after the Queen’s funeral next week to hold an emergency Budget, in which Liz Truss has promised to announce immediate tax cuts, the Prime Minister’s spokesperson has indicated.
The death of Elizabeth II last week instigated a ten-day period of mourning, during which time parliament is suspended and all non-urgent announcements are paused. Downing Street’s spokesperson said today, however, that the Prime Minister still intends to deliver a “fiscal event” before the end of the month.
Speaking during the lobby briefing this afternoon, the spokesperson told journalists: “We are still planning to deliver a fiscal event this month. We would not do that in recess. Beyond that, we have not set out a date.”
Parliament returned from recess on September 5th after the summer break. The government has a window between now and September 22nd before MPs are again scheduled to be on recess for the annual conferences of the political parties. Both Labour and the Tories have said they are going ahead with their conferences.
Fiscal measures are normally announced as part of a Budget but, following criticism that she would hold an emergency Budget without consulting the Office for Budget Responsibility (OBR), Truss promised to deliver a ‘fiscal event’. In practice, the event would work like a normal Budget.
The Prime Minister had announced, last Thursday, the long-awaited plan from the government to tackle sky-high energy bills and ease the cost-of-living crisis, with a focus on capping prices and boosting domestic energy supplies.
In a statement to parliament, prior to the death of the Queen, Truss announced an “energy price guarantee” of around £2,500 per year. She told MPs that her Chancellor, Kwasi Kwarteng, would make a “fiscal statement” later this month to outline the specifics of the plan and how the energy price freeze would be funded.
Paul Johnson, Institute for Fiscal Studies director, told Times Radio that the government will have to come up with a better version of the energy price guarantee next year because Truss’ proposal is “incredibly expensive” and “totally untargeted”.
Keir Starmer accused the Prime Minister of “loading the burden” of the cost-of-living crisis on to working people and urged Truss to back Labour’s proposal of funding an energy price cap freeze through an expansion of the windfall tax.
“The real question the government faces, the political question is, who is going to pay,” Starmer told MPs. He said it is “ridiculous” to claim that a windfall tax would deter investment, as Truss has suggested, and argued that the Prime Minister is “driven by dogma, and it’s working people that will pay for that dogma”.