Focus on growth not fiscal discipline, Kwasi Kwarteng tells Treasury
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
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