Michael Gove savages Liz Truss over budget as Tory conference opens

"They want to know this plan has been well thought through, that it will work, that it will command the confidence of the money men in the markets. But they will also want to know that the Prime Minister and the Chancellor share their values."

Mr Gove told the BBC there were "two major things" that were problematic with the plans set out by the Prime Minister and Chancellor: "The first is the sheer risk of using borrowed money to fund tax cuts. That's not Conservative.

"The second thing is the decision to cut the 45p rate (of income tax) and indeed at the same time to change the law which governs how bankers are paid in the City of London.

"Ultimately, at a time when people are suffering,and you are quite right to point out the concerns people have not just over mortgages but over benefits, when you have additional billions of pounds in play, to have as your principle decision, the headline tax move, cutting tax for the wealthiest, that is a display of the wrong values."

Pressed on whether he would vote for the measures in the Commons, he said: "I don't believe it's right."

Mr Gove did not say whether he had confidence the pair hold those values, instead saying: "There were a number of mistakes made last Friday in the fiscal event, the mini-budget, but there is room and time to address them and to correct them. That's the challenge this week."

It has been reported that some Tory MPs are preparing to vote with Labour to prevent measures announced by the Chancellor on September 23, including abolishing the top rate of income tax, a move which would see them losing the Conservative whip.

Liz Truss acknowledged she could have "laid the ground" better about the plans contained in the Government's mini-budget which triggered market turmoil.

She told the BBC's Sunday with Laura Kuenssberg: "I'm afraid there is an issue that interest rates are going up around the world and we do have to face that."

But she added: "But I do want to say to people I understand their worries about what has happened this week.

"I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act.

"But I do accept we should have laid the ground better... I have learnt from that and I will make sure that in future we do a better job of laying the ground."

Liz Truss insisted she was right to increase borrowing this winter, making "tough decisions" in a "very difficult world".

The Prime Minister told Sunday With Laura Kuenssberg on BBC One: "We're not living in a perfect world, we're living in a very difficult world where governments around the world are making tough decisions.

"And I believe it was the right decision to increase borrowing this winter."
She said the UK has the "second lowest borrowing in the G7", borrowing less than France, the US, Canada and Japan, adding: "And I think it's important people understand that."

"Of course we need to bring down borrowing as a proportion of GDP over the medium-term, and I have a plan to do that. But what would have been wrong is for us not to have acted," she said.

Prime Minister Liz Truss told the BBC: "I understand how worried people are and I understand that people are struggling and it is very, very difficult times.
"This is a global problem. You have got (Vladimir) Putin's war in Ukraine, the aftermath of Covid.

"What is happening around the world is that interest rates are rising, so the Federal Reserve has pushed its interest rates up to 4%."

Pressed on the response to the mini-budget in the UK, she said: "I want to reassure people that we do have a very clear plan - first of all about how we are going to get through this winter with our energy plan but also how we are dealing with the issue of a slowing economy."

She said the Government had to act to reverse the national insurance rise and "on other areas of taxation" to make sure the economy did not slow down.
Liz Truss did not rule out cuts to public services, saying they will remain "excellent".

The Prime Minister told the BBC's Sunday With Laura Kuenssberg programme: "What I'm going to do is make sure we get value for money for the taxpayer.
"But I'm very, very committed to making sure we've got excellent frontline public services.

"And I'm not going to go into what the Chancellor will announce in his medium-term fiscal plan. He's going to announce that very shortly, it will come together with an OBR forecast."

Pressed on whether her refusal to rule out cuts suggested that she will go down that path, she said: "No it doesn't, because I can't exactly set out what is going to be in this plan. What I can promise is we're going to reduce debt as a proportion of GDP."

Conservative chairman Jake Berryurged Tory MPs to unite behind Liz Truss and her programme, saying she had "a mandate both from colleagues and our membership".

He said: "I'm sure that if we do that it will lead ultimately to long-term electoral success."

Liz Truss said she would ensure pensions rise in line with inflation, but refused to make the same commitment for benefits and government departmental spending.

Not ruling out departmental real-term cuts, the Prime Minister told Sunday With Laura Kuenssberg on BBC One: "I'm not going to write future budgets on your show.

"I believe in outcomes rather than inputs, so I believe in what people see and what people feel."

Not ruling out rowing back on Boris Johnson's promise to raise benefit payments in line with inflation, she said: "This is something the Department of Work and Pensions Secretary is looking at at the moment. She will make a determination on that and we will announce that this morning."

But she was clear pensions would rise in line with inflation, saying: "I've committed to the triple lock. Yes."

Kwasi Kwarteng did not discuss plans for future spending cuts at an event for Conservative donors held after September's mini-budget, the party chairman has said.

Jake Berry told Sky's Sophy Ridge on Sunday that he had attended the event, and did not hear the Chancellor give any insights into planned cuts.

He said: "I certainly didn't hear him make those comments.

"I was there so I listened to what he said and what he talked about was his plan for growth."

He added: "I can categorically rule out that in terms of the address he made to the group of people who were there as part of this normal treasurer's event, he did not give any insight into future plans and I'm sure in terms of his private conversations he didn't give any."

Liz Truss said Kwasi Kwarteng "meets business people all the time" when asked about the Chancellor attending a private champagne reception with hedge fund managers who stood to gain from a collapse in sterling following his mini-budget.

The Prime Minister told the BBC's Sunday with Laura Kuenssberg programme: "The Chancellor meets business people all the time, that's his job.

"I do not manage Kwasi Kwarteng's diary, believe me."

Pressed on whether it would have been better if he had not gone as people are struggling with the cost-of-living crisis, Ms Truss said: "I get up every morning as Prime Minister thinking how can we make our country more successful, how can we reassure people, how can we help people get through these very difficult times and we do face difficult times...

"And that's what I'm focused on. That's what the Chancellor is focused on and that is what the whole Cabinet is focused on."

Liz Truss defended her actions, telling the BBC: "We are not dealing with the issues we are dealing with in isolation.

"We are dealing with these issues in a world where there is a slowing global economy and where there are rising interest rates, where there is huge inflation, mainly driven by energy, caused by Vladimir Putin's war.

"I as Prime Minister, and the Chancellor, have to deal with that in the way that we think will help people in Britain most get through these very, very difficult short-term circumstances but put our country on the best long-term footing."

Conservative donors who attended a champagne reception with the Chancellor after his mini-budget should be "lauded", the party chairman has said.

Jake Berry told Sky's Sophy Ridge On Sunday: "We often have drinks receptions for donors in the Conservative Party and in fact these people should be lauded because we don't have public funding of political parties and these are people who go out and make money and donate to political parties in the same way as they do for the Labour Party and the Liberal Democrats."

He said the event had not been for hedge fund managers, although there was at least one in attendance, but instead had been for "Britain's leading entrepreneurs" as part of the "normal drumbeat" of party fundraising events.

Mr Berry added that he thought the Chancellor himself had been drinking a soft drink rather than champagne.

The Prime Minister acknowledged the country faced a "turbulent and stormy time".
Questioned on what democratic mandate she had for her plans, Liz Truss told the BBC: "What people voted for in 2019 when they voted Conservative, sometimes for the first time in many years, is they voted for a different future.

"They voted for investment into their towns and cities, they voted for higher wages, they voted for economic growth.

"That is what our plan will deliver. I'm confident it will deliver, I'm absolutely confident that what we are doing on speeding up road projects, unleashing investment from the City, reducing taxes will deliver that.

"I'm not saying it's not going to be difficult. We do face a very turbulent and stormy time but it will deliver, it will deliver on the promises we made.
"And in the circumstances I'm very clear that we had to act quickly to get this plan going."

Liz Truss ruled out publishing forecasts from the independent Office of Budget Responsibility ahead of the Chancellor's mid-term plan on November 23.

The Prime Minister also said the Government "simply didn't have time" to publish OBR data alongside Kwasi Kwarteng's mini-budget.

She told the BBC's Sunday With Laura Kuenssberg programme: "It does take a while to produce those forecasts...

"We simply didn't have time to go through that process because it was a very urgent situation."

She promised that the OBR is "going to be a full part of the medium-term fiscal plan".

But asked if she will publish a forecast before the end of November, Ms Truss said: "Well, no, for the following reason, Laura, that it's not yet ready."