Liz Truss had her first lengthy grilling since Laura Kuenssberg’s mini-budget on Sunday, after critics branded a series of mini-interviews with local radio and regional BBC TV presenters earlier in the week an “accident by car”.
In a 20-minute interview on Sunday morning with the BBC’s Kuenssberg, the prime minister sounded calm despite the growing Tory rebellion over her chancellor’s mini-budget, which sent markets tumbling.
Here are the key points from his interview at the opening of the Conservative conference in Birmingham:
A defense of the tax cuts, but some remorse for the handling of the ad
Truss was in bullish mode, saying the mini-budget announced on September 23, which gave bigger tax cuts to the mega-rich, would “stand”.
She did not seem fazed by her own party’s reaction, saying there had been “too much focus in politics on optics or how things look, as opposed to the impact they have on our economy”.
Reiterating that at least 50% of the spending was related to helping people with spiraling energy bills, Truss said the government “didn’t live in a perfect world” and tried to remind people that without action, “we’re going to be in serious trouble “.
His only note of regret was about the handling of the ad itself. He appeared to suggest that more should have been done to reassure the markets ahead of Kwasi Kwarteng’s statement, saying: “I accept that we should have prepared better, I accept that and I have learned from it and I will make sure that in in the future we will do a better job of preparing the ground.”
A refusal to rule out cuts in public service spending
During the leadership contest, Truss said he was “not planning to cut public spending”. However, he did not use such definitive language in the interview with Kuenssberg.
After government departments were told to find “efficiency savings”, fears of a return to years of austerity have grown among Tory MPs.
Truss twice refused to rule out public spending cuts, although when it was suggested that it was likely to happen, Truss replied “no, no” and told people to wait for the growth announcement in the medium term of Kwarteng at the end of November.
Kwarteng blamed the removal of the 45p tax rate
One of the central criticisms of Conservative MPs has been the abolition of the additional rate of tax on incomes above £150,000, proof, they say, that the mini-budget was to help the most welcome.
Truss said the controversial move was not discussed with the cabinet in advance but was a decision taken by the chancellor.
The door is left open to real benefit cuts
Another move Truss refused to rule out was raising benefits below inflation, meaning a pay cut in real terms for those on low wages forced to top up their wages with universal credit.
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While Boris Johnson promised to increase benefit payments in line with inflation, the new prime minister said: “That is something that the secretary of the Department for Work and Pensions is looking at at the moment. She will take a determination about it and we will announce it this fall.”
Refusal to publish OBR economic forecasts before 23 November
The government has been forced to commit to releasing the Office for Budget Responsibility’s economic forecasts due to market uncertainty over the impact of the mini-budget measures. Some have suggested that forecasts should be published earlier.
Mel Stride, Tory MP and chair of the Treasury select committee, claimed them this month. But Truss said they would hold back until Kwarteng makes its medium-term growth announcement.
He added that “there was no point in publishing something that is not ready.”
Easy on the chancellor’s drinks with the hedge fund managers after a mini-budget
After the Sunday Times reported that Kwarteng attended a champagne reception at the home of a Tory donor hours after delivering his mini-budget, Mr Truss appeared relaxed.
“He meets with business people all the time,” she said, adding: “I don’t run his newspaper.”