London Daily

Focus on the big picture.
Wednesday, Sep 17, 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
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
×