Portrait of the week

Home The Bank of England warned of a ‘material risk’ to financial stability as it stepped in to buy a wider range of gilts. But markets got the jitters again when Andrew Bailey, its governor, announced to pension funds: ‘You’ve got three days left.’ Kwasi Kwarteng, the Chancellor of the Exchequer, would present his ‘fiscal statement’ to parliament on 31 October, Halloween, not 23 November as originally planned. The Institute for Fiscal Studies thinktank said that under current plans, public spending would need to be cut by £60 billion a year by 2026-27 to put the economy on a safe footing. GDP shrank by 0.3 per cent in August. British Cycling announced an eight-year sponsorship deal with the oil company Shell.

Home Kwasi Kwarteng, the Chancellor of the Exchequer, presented a far-reaching ‘fiscal event’ (ineligible to be called a Budget), said to have cut more tax than any measure since 1972. The markets’ immediate response was to sell pounds, and sterling fell to $1.07 (though the euro also continued in its own decline against the dollar and the Chinese yuan fell sharply). The Treasury defensively said it would publish proposals for dealing with its debt and the Bank of England said it would buy government bonds to help ‘restore orderly market conditions’. The IMF spoke out, inviting the government to ‘re-evaluate’ its tax changes.

Home Queen Elizabeth was buried in St George’s Chapel, Windsor Castle, beside her husband and father, after a funeral at Westminster Abbey. In the ten days of mourning, six days were devoted to a lying-in-state at Westminster Hall, for which the public queued around the clock, often for more than five miles and ten hours. A livestream broadcast on television accustomed viewers to Gentlemen at Arms with swan-feather plumes and Yeomen of the Guard with ribboned hats guarding the catafalque. The public were courteous, silent and moved. King Charles completed a tour to Edinburgh, Belfast and Cardiff during the days of mourning, making speeches, meeting crowds and speaking in Welsh.

Home The body of Queen Elizabeth lay in state at Westminster Hall, in a coffin draped in the royal standard on which were placed the orb and sceptre, before her funeral in Westminster Abbey on 19 September, declared a bank holiday. She had died at Balmoral on the afternoon of 8 September, two days after appointing Liz Truss Prime Minister there. The new King took the name Charles III. In a televised address the next day, he said: ‘As the Queen herself did with such unswerving devotion, I too now solemnly pledge myself, throughout the remaining time God grants me, to uphold the constitutional principles at the heart of our nation.

Home Liz Truss, the new Prime Minister, said in a speech outside 10 Downing Street: ‘Boris Johnson delivered Brexit, the Covid vaccine and stood up to Russian aggression. History will see him as a hugely consequential prime minister.’ For her part: ‘I am confident that together we can ride out the storm.’ Earlier, on being elected leader of the Conservative party, she had said: ‘I know that we will deliver, we will deliver, we will deliver.’ She had been elected by party members ahead of Rishi Sunak by 81,326 votes to 60,399 (57.4 per cent to 42.6). Turnout was 82.6 per cent.

Home Liz Truss, the contender for the Conservative party leadership who is expected to become prime minister next Tuesday, resisted temptations to say what she would do about the national energy price crisis. But she was said to have in her pocket licences for new drilling in the North Sea. Nadhim Zahawi, the Chancellor of the Exchequer for the time being, said that even people earning £45,000 a year would need help with their energy bills this winter. The price cap for energy set by the regulator Ofgem will rise by 80 per cent in October, with electricity going up from 28p per kilowatt hour to 52p and gas from 7p to 15p, making a typical annual energy bill currently £1,971 rise to £3,549.

Home Inflation would reach 18.6 per cent by January and the energy price cap £5,816 in April, according to a forecast by Citi, the investment bank. An annual National Grid exercise simulating a gas supply emergency has been extended from two days to four in September. Workers at Felixstowe, Suffolk, Britain’s biggest container port, handling 48 per cent of traffic, went on strike for eight days. Strikes by Scottish dustmen spread from Edinburgh. Barristers belonging to the Criminal Bar Association voted to go on an indefinite strike in England and Wales after their demand for a 25 per cent increase in pay for legal aid work was denied. A man was charged with the murder of Rico Burton (a cousin of the boxer Tyson Fury), who was stabbed to death in Altrincham at 3 a.m.

Home The annual rate of inflation rose to 10.1 per cent, its highest since 1982. Average wages rose by 4.7 per cent between April and June, but inflation in that quarter left average workers 3 per cent less well-off than before. The supermarket Iceland was to offer customers interest-free loans of between £25 and £100, repayable at £10 a week, to help them buy food. Sir Keir Starmer, the leader of the Labour party, called for £29 billion to be spent on freezing energy prices for six months for all consumers, rich and poor, partly to be paid for by extending the windfall tax on oil and gas. Railway workers belonging to the RMT union went on strike for another two days.

Home Energy bills will be £4,266 for a typical household by January, according to the consultancy Cornwall Insight, which had put the sum at £3,616 only a week earlier. Ofgem had decided since then to shorten the period over which suppliers can recover their costs. Gordon Brown, prime minister 2007-10, declared that Boris Johnson, the Prime Minister, and Liz Truss and Rishi Sunak, competitors to succeed him, must hold an emergency Budget to deal with the ‘financial timebomb’ of energy prices. ‘If they do not,’ he said, ‘parliament should be recalled to force them to do so.

Home BP reported quarterly profits of £6.9 billion, its biggest for 14 years, after oil and gas prices rose steeply. Typical domestic energy bills were forecast by the consultancy Cornwall Insight to go above £3,600 a year in the coming winter. Under the family scheme for visas, 31,300 Ukrainians had arrived in the United Kingdom, and 72,700 under the sponsorship scheme. British Airways suspended new ticket sales for short-haul flights from Heathrow until at least 15 August, to meet the airport’s limit on the number of passengers departing each day of 100,000. On 1 August, 696 migrants crossed the Channel in small boats; in July the total was 3,683, and more than 17,000 so far in 2022.

Home In a television debate between the two contenders for the leadership of the Conservative party (and hence the prime ministership), Rishi Sunak said it would be irresponsible to put the country in even more debt by cutting taxes and Liz Truss said that the tax rises he approved would put Britain into a recession. Mr Sunak was criticised for interrupting. A later proposal he made to cut VAT when the price cap on energy bills rose above £3,000 only brought accusations of a U-turn. He agreed to be interviewed by Andrew Neil on Channel 4, but Ms Truss didn’t. Opinion polls put Ms Truss well ahead among Conservative voters; Labour voters preferred Mr Sunak.

Home In the contest for the leadership of the Conservative party, Jeremy Hunt and Nadhim Zahawi were the first of the eight contenders to be eliminated, followed by Suella Braverman, Tom Tugendhat and Kemi Badenoch. After two televised debates, Rishi Sunak and Liz Truss, the frontrunners, refused to take part in a third, which was cancelled. The debates were bitter and accompanied by negative briefings. Lord Frost said he had ‘grave reservations’ about Penny Mordaunt, and had ‘had to ask the PM to move her on’ when she was his junior during Brexit negotiations. After parliament rose for the summer two names were to be put before party members in a postal ballot.

Home The Conservatives began the process of finding a new leader, which involves balloting MPs and then sending two names for party members to choose between. Eight candidates initially qualified for the process set out by the 1922 Committee, by gaining nominations from 20 MPs: Kemi Badenoch, Suella Braverman, Jeremy Hunt, Penny Mordaunt, Rishi Sunak, Liz Truss, Tom Tugendhat and Nadhim Zahawi. Grant Shapps, Rehman Chishti and Sajid Javid withdrew before the off. Ben Wallace, the Defence Secretary, a fancied contender, had decided not to stand, as had Steve Baker, who was not widely fancied. Michael Gove (whom Downing Street had denounced a week earlier as a ‘snake’ when the Prime Minister, attempting to hold on to power, sacked him) did not stand, and nor did Priti Patel.

Home Rishi Sunak resigned as Chancellor of the Exchequer and Sajid Javid as Health Secretary. (Nadhim Zahawi accepted the post of Chancellor and Steve Barclay, the PM’s chief of staff, Health Secretary.) The resignations came five days after Chris Pincher, aged 52, the MP for Tamworth, resigned as deputy chief whip the morning after he ‘drank far too much’ at the Carlton Club where he was alleged to have groped two men. Then began questions of what Boris Johnson, the Prime Minister, knew and when. Mr Pincher had the whip removed as a member of the parliamentary Conservative party, and said: ‘I will benefit from professional medical support.

Home Ben Wallace, the Defence Secretary, said that military spending had to increase. Boris Johnson, the Prime Minister, reacted to the loss of two by-elections by saying ‘I’ve got to listen to what people are saying’, but did not resign. Oliver Dowden said ‘Somebody must take responsibility’, and resigned as a co-chairman of the Conservative party. Later Mr Johnson joked to reporters in Kigali, Rwanda, at the Commonwealth Heads of Government meeting: ‘I’m thinking actively about the third term.’ The Liberal Democrats won Tiverton and Honiton with a swing of 29.9 per cent from the Conservatives; the Conservative majority of 24,239 from the 2019 general election was the largest ever overturned in a by-election.

Home A rail strike on three alternate days, bringing the system to a standstill for a week, was organised by the Rail, Maritime and Transport workers’ union. On the first day, the London Underground came out too. Tram drivers in south London arranged a strike of their own. Sir Keir Starmer, the Labour leader, instructed his frontbenchers not to join strikers’ picket lines, but some did. EasyJet announced plans to cut 7 per cent of its 160,000 flights scheduled between July and September after Gatwick, easyJet’s main airport, said it would reduce the number of flights taking off. Flights carrying up to 5,000 passengers were cancelled at Heathrow airport on one day because of trouble with baggage-handling.

Home Boris Johnson won a vote of confidence in him as prime minister among Conservative MPs by 211 votes to 148 (58.8 per cent in favour, compared with 63 per cent in favour of Theresa May in 2018). No more such votes are allowed for a year. Workmen had still been dismantling the staging in front of Buckingham Palace from the Jubilee celebrations when Sir Graham Brady, the chairman of the 1922 Committee, announced that, as at least 54 MPs had written letters requesting it, there would be a secret ballot on the question. Boris Johnson had been booed by people in the crowd as he walked up the steps of St Paul’s with his wife Carrie for the service of thanksgiving for the Queen’s 70 years on the throne.

Home The Jubilee for the Queen’s 70 years on the throne was marked by two days of public holiday, 16,000 street parties, a service at St Paul’s, Trooping the Colour, late pub opening, beacons, bells, and anxiety about the Queen’s health. After Rishi Sunak, the Chancellor of the Exchequer, announced in parliament that he had added £15 billion of public money to the £9 billion allocated in the spring statement to relieving energy bills, the nation questioned what it meant for their pockets and for Conservative politics. The government would get some of the money for the plan from a windfall tax, or ‘energy profits levy’, of 25 per cent on the profits of oil and gas producers, expected to yield £5 billion this year.