Aubrey Allegretti

Low-income households will have to wait until the end of October to find out if welfare payments will rise with inflation or be subject to a real-terms cut, the chancellor has suggested.

Kwasi Kwarteng sought to calm the markets by proclaiming that his Halloween growth plan would be “relentlessly upbeat”, but faced hostile questions from Tory MPs during the first Commons showdown over September’s mini-budget.

Amid a push by some cabinet ministers and Conservative backbenchers for welfare payments to rise in line with inflation, Treasury ministers sought to play down any suggestion they had made up their mind.

Kwarteng said that “no decisions have been made” and there was a “natural, usual statutory process that’s being taken”.

Eddie Izzard has launched a campaign to be elected as the Labour MP for a Sheffield constituency.

The comedian, 60, announced her intention to join the race to become the party’s candidate for Sheffield Central on Tuesday, PA Media reports. A campaign video was tweeted on Tuesday lunchtime.

It comes after the constituency’s incumbent Labour MP Paul Blomfield announced in February that he was standing down at the next general election.

Izzard has many connections to Sheffield as the city where she studied accounting, launched her creative career, ran through the city as part of her 43 marathons for Sport Relief and campaigned against the closure of the Leadmill music venue.

In a message on her campaign website, Izzard wrote that she wanted to “support the city that has supported me” as well as “take the fight to the Tories and get Keir Starmer into No 10”.

“When I’m faced with a challenge, I work my hardest to deliver,” she wrote.

“This next challenge is the most important of my life and I need your help.”

Izzard added that Sheffield was “being held back” after 12 years of the Conservatives in power.

“A Labour government will embolden Sheffield to achieve its true potential and I believe I am the right person to build on Paul Blomfield’s tireless work for this city,” she said.

Lisa O’Carroll

Liz Truss must not surrender to the EU by giving the European court of justice a role in trade disputes in Northern Ireland, the former Brexit minister Lord Frost has said.

“The court of justice cannot have a jurisdictional or arbitrational role in the future arrangement I can’t see how they will be stable while that remained the case, I think we better if that was acknowledged sooner rather than later,” he told the House of Lords European relations committee on Tuesday.

Talks on the controversial issue of the Northern Ireland protocol were paused two months after Frost quit his role last December but resumed last week amid rising hopes of an end to dispute between the EU and the UK.

Conservative MP James Cartlidge has said it is “one of the most important issues in British politics, about how do we pay for healthcare”, saying that the government has to be fiscally responsible.

He said that the Office for Budget Responsibility had already had its verdict on the budget, and said a July report said the current spend on healthcare and adult social care would go from 10.3% of GDP to 17.5% in 50 years’ time.

“This is cutting the mustard and telling us the cost we have to face up to,” he said. He said that debt will go up to 257% of GDP because of the rise in healthcare and pensions.

“I have many reservations about what we are doing today. The former prime minister was determined we wouldn’t have another green paper or white paper on social care. He wanted to actually deliver something for the country. He introduced that cap that has been promised by successive governments.

“I sincerely hope that by removing the funding mechanism for that cap, that the Treasury resists the temptation to water the cap down.”

As the debate in the Commons continues, the chair of the Treasury select committee, Mel Stride, has told BBC Radio 4’s PM programme that rowing back on tax cuts “has to be on the table” for the chancellor Kwasi Kwarteng in his fiscal statement on 31 October.

The Conservative MP said the chancellor may need to be “brave” and “take that step backwards” if “the choice is between getting it wrong and trying to argue a case that just won’t work”.

Stride said: “I think this is an absolutely critical opportunity now for a reset moment with the markets and by extension politically with the party in parliament and with the electorate, and it’s something he’s absolutely got to get right.

“And if at the end of the day they run through all these numbers and they know, in their heart of hearts, that the choice is between getting it wrong and trying to argue a case that just won’t work, or rowing back on those tax cuts that they put forward, then he needs to be brave and he needs to take that step backwards. But let’s see where he ends up.”

He added: “Rowing back on tax cuts as a possibility has to be on the table because if you can’t make the rest of the equation work then the alternative is to go out with something that the markets are just not going to buy and that will be a very difficult place. However, I do think we need to give the chancellor the opportunity to work through all the options and present that plan.”

Shadow Treasury minister James Murray is now responding for the opposition saying they had warned the government to drop its plans for a national insurance increase, saying it was warned by other groups and bodies – including the CBI and TUC, as well as Tory backbenchers.

He repeats the tax information and impact notes, which said: “There may be an impact on family formation, stability or breakdown as individuals who are just about managing financially will see their disposable income reduce.”

In terms of businesses it said: “Behavioural effects are likely to be large, including business decisions around wage bills and recruitment.”

Murray encourages the government to U-turn again, not just on the national insurance increase, but on the broad Conservative party approach to the economy. Much of Murray’s other remarks are on the government’s economic policies, including lifting the cap on bankers’ bonuses and on “non dom” taxes.

Treasury minister Chris Philp says NHS and care will get ‘not single penny less’ despite repeal of health and care levy

Andrew Sparrow

Back in the Commons, Chris Philp, chief secretary to the Treasury, says reversing the national insurance rise will make working more attractive.

Steve Brine (Con), a former health minister, intervenes. He says one reason why people are not working is because they are ill. He says the national insurance increase was meant initially to enable the NHS to deal with the backlog build up during Covid. He asks Philp to assure him that, if he votes for this bill, funding for tackling that backlog won’t be affected.

Philp does give that assurance. He says:

Not a single penny less will go to social care, to the NHS, or to the elective programme [Brine] referred to [as as result of the bill].

Pressed on this point a second time, Philp says the entire health service budget will remain unchanged as a result of this bill.

Another MP says the government will be losing £17bn in revenue as a result. He asks how the health budget won’t be affected. Philp replies by saying this will addressed in the medium-term fiscal plan being published at the end of October.

That’s all from me for today. My colleague Harry Taylor is taking over now.

Alex Salmond, the former Scottish first minister, has criticised the Scottish government’s decision to go to the supreme court today to seek permission to hold an independence referendum. Salmond, who left the SNP over sexual misconduct claims and who now leads the nationalist Alba party, said:

They seem to be risking a great deal to gain comparatively little.

Let’s say that they win this case. They’re going to win it on a very narrow argument, that it’s within the competence of the Scottish parliament to have a referendum because it doesn’t matter, it’s not going to have any legal effect.

That would be the argument it was won on, in which case the opponent of independents would say, ‘it doesn’t matter, that’s what you said in court’.

Whereas if they lose it, in the words of the lord advocate, the matter is finally resolved. If we’re going to resolve the issue of Scottish independence, then the people who resolve it are the Scottish people, not the supreme court of the United Kingdom.

Nicola Sturgeon, Salmond’s successor as first minister, has said that if a referendum is not allowed, she will treat the next election as a de facto independence referendum. Salmond sounded sceptical about this too. He said:

If you’re going for the general election de facto referendum strategy then you have to make it special.

You can’t just roll up and fight as political parties because people will say it’s a normal election. You’d have to fight it on (a) Scotland United [ticket] or something like that.

You could fight an election with Scotland United SNP, Scotland United Greens and Scotland United Alba and then say: ‘This is clearly above political parties. This is just about the cause and case of Scottish independence.’

That might work. It would be difficult, but it might work.

In the Commons Chris Philp, the chief secretary to the Treasury, is opening the second reading debate on the health and social care levy (repeal) bill.

He says the government is focused on growth, and its growth plan is designed to achieve growth of 2.5% per year, he says.

He says this would benefit everyone – and not just in a supposed “trickle-down” way.

Labour is recording huge poll leads over the Conservatives on voting intention, but often the indicators that provide the best guide to electoral success are which party is best on the economy, and which party has the best leader.

On some measures, Labour is now well ahead on the economy. And new polling from YouGov suggests Keir Starmer is much better regarded than Liz Truss.

The government has not ruled out scrapping long-awaited reforms to protect private renters from so-called ‘no fault’ evictions, a manifesto pledge, PA Media reports. PA says:

Downing Street said that no decisions had been made on whether to pause a promised ban on section 21 notices, which allow landlords to evict a tenant without having to give a reason.

It comes amid reports the government could move to shelve the 2019 manifesto commitment.

The prime minister’s spokesperson said today that the government would ensure that renters’ rights were protected.

The spokesperson said “no decisions have been taken on any further policies” but the Department for Levelling Up, Housing and Communities (DLUHC) was looking at the issue.

Asked specifically whether Liz Truss thought it was right to scrap no-fault evictions, he added: “No decisions have been made. This is something the secretary of state is considering in terms of how to improve the rental market. Clearly, ensuring a fair deal for renters will always remain a priority for this government.”