During a tense PMQs, Liz Truss said she would “definitely” not reduce government expenditure while fending off criticism of the mini-Budget.
The premier ignored warnings of a £60 billion black hole in the public budget amid skyrocketing inflation, tax cuts, and the collapse of the markets in acrimonious spats with Keir Starmer.
She also asserted that the Kwasi Kwarteng package, which was largely credited for frightening markets with its announcement last month, will result in “greater growth and lower inflation.”
Additionally, Ms. Truss emphasized that despite yesterday’s rumors to the contrary, measures to outlaw no-fault evictions will go forward.
The Commons exchanges took place on a day that moved quickly because:
As government bonds continue to fall after the Bank of England reaffirmed that the rescue would conclude on Friday, pension funds are under increased pressure;
Worse than anticipated, the GDP contracted by 0.3% in August, igniting worries of an impending full-blown recession;
After announcing a cap on revenues of electricity generators benefiting from skyrocketing energy prices, ministers have been accused of making a U-turn to enact a windfall tax “by the back door.”
Ms. Truss is facing the threat of new rebellions from Tory MPs over fracking and plans to keep the foreign aid budget at a reduced level for another year.
Sir Keir attempted to put a sharp stop to the problems facing the government by stating: “During her leadership race, the Prime Minister declared, and I’m using her exact words, “I’m quite clear, I’m not contemplating public expenditure cutbacks.” Will she continue to do that?
Sure, Ms. Truss retorted. Look, Mr. Speaker, our annual public expenditure is close to £1 trillion. In 2010, we were spending £700 billion.
“What we will ensure is that the debt is decreasing over the medium term.” We’ll do it by ensuring sure public funds are used wisely rather than by reducing government spending.
Sir Keir denounced Jacob Rees-Mogg for claiming in interviews this morning that the market turmoil may have been caused by the Bank of England’s refusal to decrease interest rates quickly enough rather than the mini-Budget.
“What we have done is we have taken decisive action,” the PM retorted. We have acted firmly to prevent individuals from having to pay £6,000 in energy costs over the course of two years. And I believe we are all aware that the Opposition is just referring to six months.
In the midst of a worldwide economic slump, “We’ve also taken significant steps to ensure that we do not pay the highest taxes in 70 years.”
‘In this really challenging international period, what we are making sure of is that we defend our economy. Our actions will lead to stronger growth and lower inflation, and this has been objectively verified.
The truth is that when I took office, individuals were dealing with energy bills that might reach £6,000, according to Ms. Truss. The other party is yelling, yet he is against the very package we introduced, the energy price guarantee. The majority of the mini-budget that we mentioned was comprised of that.
He has declined to say whether or not he supports our two-year energy price guarantee, which protects people not only during this winter but also throughout the next one.
“What we are seeing is a rise in interest rates across the board.” In response to Putin’s dreadful war in Ukraine, we are acting and they are rising everywhere.
We are assisting individuals by lowering stamp duty, assisting them with their energy bills, lowering inflation with our energy package, and maintaining low taxes.
Graham Stringer, a Labour MP, questioned Ms. Truss over no-fault evictions.
In his words, “Spooking the markets, raising borrowing costs, and raising mortgage rates was almost probably an act of severe ineptitude rather than malovelence.”
But abandoning the pledge to put a stop to no-fault evictions is a shocking act of callousness.
Can the Prime Minister give the country’s 11 million private renters any consolation that she will keep her promise to end no-fault evictions?
I can, Ms. Truss retorted.