Truss and Kwarteng defend tax cuts as ‘right plan’ to get economy moving

The Chancellor and Prime Minister defended Friday’s mini-budget amid financial market chaos.

29 September 2022

Liz Truss and Kwasi Kwarteng have insisted their £45 billion package of tax cuts is the “right plan” to get the economy moving despite chaos on the financial markets and fears of rocketing mortgage bills.

In their first public comments since the pound hit a record low on Monday, neither the Prime Minister nor the Chancellor commented directly on the turmoil created by his mini-budget.

During a round of BBC local radio interviews, Ms Truss said the Government had to take “urgent action” to kick-start the economy and protect consumers from rising energy costs.

And during a visit to an engine plant in Darlington, Mr Kwarteng said the package he announced in the Commons on Friday was “absolutely essential” if the economy was to generate the revenues needed to fund public services.

However, Labour warned that ordinary families would pay the price with thousands of pounds added to mortgage bills as the Bank of England will be forced to increase interest rates to shore up the pound.

Meanwhile, Mr Kwarteng came under renewed pressure to bring forward his planned statement setting out how he intends to get the public finances back on track after the Office for Budget Responsibility (OBR) said it could produce a preliminary set of forecasts by October 7.

The Chancellor previously said he would deliver his medium-term fiscal plan explaining how he would get debt falling as a percentage of GDP, alongside the updated OBR forecasts, on November 23.

But with the absence of any forecasts to accompany Friday’s “fiscal event” seen as a key factor in spooking the markets, many Tory MPs believe that is too long to wait if they are to restore stability.

Liz Truss and Kwasi Kwarteng during a visit to a factory in Northfleet, Kent, following Friday’s mini-Budget (Dylan Matinez/PA)

Mr Kwarteng brushed off suggestions his mini-budget had been a “major economic disaster”, saying: “Without growth you are not going to get the public services, we are not going to generate the income and the tax revenue to pay for public services.

“That’s why the mini-budget was absolutely essential in re-setting the debate around growth and focusing us on delivering much better outcomes for our people.”

The Prime Minister told BBC Radio Leeds: “We had to take urgent action to get our economy growing, get Britain moving and also deal with inflation.

“Of course that means taking controversial and difficult decisions but I am prepared to do that.”

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