Liz Truss defends her government’s actions, stating that it took decisive steps to stimulate economic growth and that the Treasury is “working closely” with the Bank of England – as Labour and the Liberal Democrats demand the recall of parliament to address the economic crisis.
Liz Truss asserts that her government “did the right thing” in its mini-budget to stimulate economic growth.
The prime minister stated that “urgent action” and “controversial and difficult decisions” were required to address the situation in the United Kingdom.
She stated that she was “prepared to do so…because what is most important to me is that we get our economy rolling and that people can survive the winter, and we are willing to do whatever it takes to make that happen.”
Friday’s announcement of the government’s mini-budget, which contained a slew of tax cuts such as the elimination of the highest rate of income tax, the reversal of the National Insurance hike, and the cancellation of a corporation tax increase, shook the markets.
The pound fell because economists feared the amount of borrowing required to pay for the initiatives.
The Bank of England was compelled to undertake a temporary bond-buying program as an emergency measure to prevent “material danger” to UK financial stability prevent the collapse of some pension funds.
Ms. Truss, appearing in public for the first time since the disaster, stated that the government had “done the right thing by taking swift action” and that she still believes in “sound money” despite the difficulties that have ensued.
She stated that the Treasury was “working closely” with the Bank of England, emphasizing its independence, but asserted that there were “tough markets throughout the world” as a result of the conflict in Ukraine and that the issue in the United Kingdom was not indigenous.
However, despite the Prime Minister’s repeated assertions that the “biggest part” of the government’s interventions was on energy bills (introducing a cap on the average bill of £2,500 and equivalent help for businesses), this was announced more than a week before the mini-budget and was not believed to be the primary reason for the market’s reaction.
Previously, Treasury Secretary Chris Philp acknowledged that eliminating the top tax rate would solely benefit the nation’s wealthiest citizens.
However, when asked if this and other policies were fair to the general public, the prime minister stated, “The fact is having lower taxes across the board… It helps everyone because it contributes to the growth of the economy, and for far too long, the debate in this nation has focused on distribution rather than how to build the economy.
“It is not fair to have a recession, it is not fair to have a town that is not receiving investment, and it is not fair if we don’t receive high-paying employment in the future because we have the biggest tax burden in seventy years. That is not acceptable.”
“Sort out this mess”
Opposition parties are demanding that the government reconvene parliament from its conference recess to address the economic difficulties.
After his party’s conference on Wednesday, Labour leader Sir Keir Starmer urged Mr. Kwarteng to rescind Friday’s pronouncements “before more damage is done,” telling him that Ms. Truss was an economic “threat.”
And this morning, the leader of the Liberal Democrats, Sir Ed Davey, told: “Liz Truss, Kwasi Kwarteng, and the rest of this amateur group need to return to their offices, cancel their conference, and clean up this mess – come to parliament and be held accountable.”
The Conservative Party conference is scheduled to begin in Birmingham on Saturday, but it could be a heated event because some Tory MPs will be criticizing their own government’s policies.
Former leadership candidate and ex-Chancellor Rishi Sunak, as well as former Health Secretary Sajid Javid, are believed to be absent.
