Liz Truss Admits She Should Have "Laid The Ground Better" Before Mini-Budget
Liz Truss has admitted mistakes were made in the announcement of last week's mini-budget, saying she should have "laid the ground better" for it ahead of this weekend's Conservative conference.
Speaking on the BBC's Sunday With Laura Kuenssberg, Truss said: "I do accept we should have laid the ground better, I do accept that and I have learnt from that."
She stressed that the recent controversial mini-Budget, which caused a dramatic fall in the pound, had to be rushed out as there was a "very urgent situation". This, she said, was why an OBR forecast did not accompany the fiscal event: "It does take a while to produce those forecasts," she said, adding: "We simply didn’t have time to go through that process because it was a very urgent situation... what I couldn’t do was allow people to go into this Winter worrying about their fuel bills." The OBR, for its part, says a shorter-than-normal forecast could have been produced if required.
She went on: "The alternative was people would be paying up to £6,000 on their energy bills, inflation would be 5% higher and we’d be facing a worse economic slowdown."
However, she refused to rule out public spending cuts despite being asked three times, saying: "I believe in getting value for money for the taxpayer: that’s important to me. The way we are going to improve our economy is to help more people get into work. What we will have is a long-term plan for reform… I am very very committed to making sure we’ve got excellent front line public services. I’m not going to get into what the Chancellor will announce in his medium term fiscal plan."
Truss also refused to guarantee benefits would be raised in line with inflation, saying: “This is something the Work and Pensions secretary is looking at," but pointed to an extra £1,200 for the worst off on her energy package.
Questioned about the controversial 45p top-rate tax cut, which has been criticised by commentators and some Tory MPs alike, Truss said it was Chancellor Kwasi Kwarteng's decision, and had not been discussed with Cabinet. However, she defended the policy, saying the rate, "actually raises very little and makes our tax system more complicated. Everything is about how we redistribute resources. We need a tax system that’s competitive internationally."
Responding to the interview, Labour's Rachel Reeves said: "I thought some of what the Prime Minister said this morning was quite shocking.
Reeves said that Truss didn't "seem to understand the anxiety and fear" around mortgage rate increases.
"This is a crisis that is made in Downing Street but ordinary people are paying for it," she added.
Perhaps of more concern for Truss was the criticism that came from former Tory cabinet minister Michael Gove on the same show. He described the "sheer risk" of borrowing as "not Conservative," and asked about voting for her measures, including the top rate of tax being cut, he said, "I don't believe it's right."
Writing in The House magazine, Truss pledged this morning to unveil a series of supply side reforms "in the next few weeks and beyond," including changes to the planning system, business regulations, childcare, immigration, agricultural productivity, and digital infrastructure.
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