LIZ TRUSS has ruled out any reduction in public spending, prompting speculation of a u-turn on the £43 billion worth of unfunded tax cuts announced in last month’s mini-budget.
The vow from the Tory leader drew gasps from MPs during what was only her second appearance at Prime Minister’s Questions.
Recent analysis by the Institute for Fiscal Studies suggested the government would need to make more than £60bn worth of “painful spending cuts” to get public finances under control after Kwasi Kwarteng’s fiscal statement.
READ MORE: Kwarteng will need to make £60bn of ‘painful’ cuts
The think tank said the only way for the government to avoid slashing budgets would be through a reversal of the tax cuts.
Try as hard as we can, given plausible forecasts, we can’t see how to get public finances on a sustainable path without big, painful spending cuts or a reversal of £43bn tax cuts just announced. Chancellor has a big job to reassure markets his mini budget spooked so badly https://t.co/I9oj3DKLAi
— Paul Johnson (@PJTheEconomist) October 11, 2022
In the Commons, Sir Keir Starmer pointed out that during the Tory leadership campaign Ms Truss had said “I’m not planning public spending reductions”.
Asked if she was going to stick to that, the Prime Minister replied: “Absolutely. Look, Mr Speaker, we’re spending almost £1 trillion on public spending. We were spending £700 billion back in 2010. What we will make sure is that over the medium term the debt is falling. We will do that not by cutting public spending but by making sure we spend public money well."
The Prime Minister then questioned whether or not the Labour leader backed the government's billion-pound scheme for limiting energy bills.
While Sir Keir had called for a price freeze, he had proposed that it would last just six months. The government's scheme will last two years.
Ms Truss told MPs: “And [Sir Keir] talks about our spending, which he doesn’t seem to support, on the energy price guarantee. But the reality is he can’t criticise us on one hand for spending money and on the other claiming we’re cutting public expenditure.”
Sir Keir said there needed to be a reversal of the “kamikaze budget.”
The Labour leader told her: “Does she think the public will ever forgive the Conservative Party if they keep on defending this madness and go ahead with their kamikaze budget? ”
Ms Truss replied: “The way that we will get our country growing is through more jobs, more growth, more opportunities, not through higher taxes, higher spending, and his friends in the union stopping hard-working people get to work.”
In his questions to the Prime Minister, the SNP’s Westminster leader Ian Blackford accused Ms Truss of “ignoring the damage and the chaos of the mini-budget.”
He added: “She is worrying about saving the Chancellor’s job, but many families are now worried not just about heating their homes, but keeping their homes, Prime Minister.
“The only thing growing under this government are mortgages, rents and bills. Is that what she really meant when she declared herself a pro-growth Prime Minister?”
Ms Truss replied that the government had “taken action on helping families heat their homes” and noted that interest rates were rising globally.
The Prime Minister added: “I want to do all I can to help families across Britain and the way we are going to help them is by delivering economic growth by making sure we have the jobs and opportunities in Scotland and right across the UK.”
The final question in the session came from Labour MP Matt Weston, who said polls suggested people wanted an election.
He asked if the Prime Minister would oblige.
"I think the last thing we need is a general election," she said.
After question time, the Prime Minister's official spokesman denied it was looking again at the measures in the mini-budget.
A report in the Independent suggested she was considering a staggered rise in corporation tax and a one-year delay in the 1p cut in the basic rate of income tax.
The spokesman told journalists: “No. We’re working closely with the Treasury but I don’t recognise that report.”
He said they were working closely on the “medium-term fiscal plan and the economy more generally”.
Asked if they remained committed to every aspect of the mini-budget, he said: “Yes. We are committed to the measures the Chancellor set out in the growth package.”
Pressed if that was in the timing previously set out, he responded: “Yes.”
Asked about Ms Truss's commitment that there would no public spending cuts, the spokesman said: “The Prime Minister was clear that Government spending will continue to rise but beyond that it really is for the Chancellor to come forward with anything on spending which he will do on the 31st.”
Asked if the energy support scheme could be used as cover for departmental cuts, he said: “We are clear there will need to be difficult decisions to be taken given some of the global challenges we’re facing. I appreciate the interest but I’m not going to get drawn into what those might look like.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel