London Daily

Focus on the big picture.
Tuesday, Oct 21, 2025

Focus on growth not fiscal discipline, Kwasi Kwarteng tells Treasury

Focus on growth not fiscal discipline, Kwasi Kwarteng tells Treasury

Chancellor suggests change of emphasis is needed after he sacked top civil servant whom he credited for tight control of spending

UK Treasury officials have been told to refocus on annual growth of 2.5% rather than prioritising fiscal discipline, in a call with the chancellor, Kwasi Kwarteng.

The prime minister, Liz Truss, promised a return to the economic growth target for the UK of 2.5% a year during her campaign for the Conservative party leadership, a level that has not been consistently met since before the 2008 banking crisis.

An emergency fiscal package to bring in winter tax cuts for millions of people is expected late next week after national mourning for the Queen’s death.

Treasury sources confirmed that no requests had been made to the Office for Budget Responsibility to produce economic forecasts that would normally accompany the chancellor’s speech at a budget.

No 10 said legislation would not be needed to bring in the energy support package for households as it would involve guarantees between the government and private energy suppliers. However, some legislation may be needed to enact support for businesses.

Last week, Kwarteng sacked the Treasury’s permanent secretary, Tom Scholar, in his first day in the job, a move that sent shock waves through Whitehall. Numerous former Whitehall chiefs have questioned the decision, given Scholar’s extensive experience of handling financial crises.

Kwarteng told civil servants in a call that Scholar had led “an excellent finance ministry” – a reference to the department’s commitment to keeping a tight leash on spending. But in comments first reported by the FT, he said the focus must now be “entirely on growth”.

Kwarteng argued that by returning to the 2.5% growth rate, Britain would be better placed to bear down on its budget deficit. During her leadership campaign, Truss told ConservativeHome: “We should be growing on average at 2.5. And happiness is a faster-growing private sector than public sector. That’s what we need to achieve.”

The “fiscal event” planned by Kwarteng is expected to take place on Thursday or Friday next week, before the Commons breaks up for party conferences.

Measures will include reversing April’s rise in national insurance contributions and pledging not to increase corporation tax from 19% to 25% next year. These two measures alone, however, would entail permanent tax cuts of £30bn a year – more than 1% of national income. Kwarteng may also bring forward a one percentage-point cut in the basic rate of income tax.

Truss’s team has also spoken to business groups about changes to business rates and cuts to VAT to help with the energy crisis, as well as a longer-term review of these taxes.

The prime minister is planning to travel to the UN general assembly in New York in the days after the Queen’s funeral, returning in time to sit alongside Kwarteng in the Commons as he delivers his fiscal event.

The most obvious day for it would be Thursday 22 September, as parliamentary business has been postponed until after Wednesday 21st and Truss is likely to be in New York until then.

At the mini-budget, the government is expected to confirm plans to reverse the recent rise in national insurance, even though it benefits higher earners the most, handing back about £1,800 a year to top earners while the lowest earners get about £7 a year.

Newsletter

Related Articles

0:00
0:00
Close
Apple Challenges EU Digital Markets Act Crackdown in Landmark Court Battle
Nicolas Sarkozy begins five-year prison term at La Santé in Paris
Japan stocks surge to record as Sanae Takaichi becomes Prime Minister
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
Bessent Accuses China of Dragging Down Global Economy Amid New Trade Curbs
U.S. Revokes Visas of Foreign Nationals Who ‘Celebrated’ Charlie Kirk’s Assassination
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
×