The Prime Minister was questioned about her government’s mini-budget, which caused turmoil in financial markets last week
For the first time, Liz Truss admitted she had made mistakes in the way the government disclosed its mini-budget, saying it “could have paved the way better”.
After this turbulent week, the Prime Minister is now in Birmingham for what could be a traumatic Tory conference. So how did she set the scene for her radio interviews this morning (October 2)?
On how to communicate plans:
Asked by the BBC’s Laura Queensberg whether she regretted the way the plans had been communicated, the Prime Minister admitted she could have “paved the way” better.
She said: “I’m afraid there will be a problem of rising interest rates around the world and we have to face that. But I want to tell people that I understand their concerns about what happened this week.
“I support the package that we announced and I support the fact that we announced it quickly, because we had to act.
“But I accept that we should have paved the ground better…I’ve learned from that and will make sure we do better in the future.”
On how to make the decision to abolish the highest tax rate:
In one of the most surprising moments of her interview, Truss revealed that scrapping the highest income tax rate was a decision made by Kwasi Quarting rather than the approval of the wider Cabinet. In fact, she seemed to be firmly placing the responsibility on her advisor.
When asked if she had discussed this controversial move with the entire cabinet, the prime minister said: “No, no we didn’t. It was a decision made by the chancellor.”
On future cuts to public services:
There are reports that the government is about to embark on further austerity, a move that was flagged by Upgrading Secretary Simon Clark in an interview yesterday.
Truss did not rule out cuts to public services, but simply said they would remain “excellent”.
She added, “What I’m going to do is make sure we get value for money for the taxpayer. But I’m very committed to making sure we get excellent public services on the front lines.
I will not go into what theinance Minister will announce in his medium-term financial plan. He will announce that very soon, he will come up with OBR predictions.”
Pressed on whether her refusal to rule out cuts indicated she would go down this path, she said, “No, it didn’t, because I can’t say exactly what would be in this plan. What I can promise is that we will reduce debt as a proportion of output.” gross domestic.
On whether interest rates will rise with inflation:
She said, “This is something the Ministry of Work and Pensions is looking for at the moment. It will make a decision on that and we will announce it this morning.”
On the issue of real-term cuts in departments, the Prime Minister said: “I will not write future budgets in your programme. I believe in results rather than inputs, so I believe in what people see and what people feel.”
On whether pensions will rise with inflation:
Contrary to benefits, Truss said she would ensure that pensions would rise in line with inflation, saying, “I’ve stuck with the triple lock. Yes.”
At Kwasi Quarting’s champagne party with hedge fund managers:
Truss said Kwarteng “meets business all the time” when questioned about reports in the Sunday Times that the chancellor attended a champagne reception with hedge fund managers who would have benefited from a sterling crash after his small budget.
She said: “The consultant meets businessmen all the time, that’s his job. I’m not running a Kwasi Kwarteng diary, believe me.”
When asked if it would be better if he had not gone because people are suffering from the cost of living crisis, she said: “I wake up every morning as prime minister thinking about how we can make our country more successful, how we can reassure people, how we can help people get through these very difficult times as we We are facing difficult times…
“And that’s what I’m focusing on. That’s what the chancellor is focusing on and that’s what the whole government is focusing on.”
On whether the mini-budget has a democratic mandate:
When asked about the Democratic mandate of her plans, Truss said: “What people voted for in 2019 when they voted for the Conservative Party, sometimes for the first time in many years, did they vote for a different future.
They voted to invest in their towns and cities, they voted for higher wages, and they voted for economic growth.
“That’s what our plan will accomplish. I’m confident it will, and I’m pretty confident that what we’re doing to speed up road projects, unleash investment from the city, and lower taxes will make it happen.”
“I am not saying that it will not be difficult. We are facing a very turbulent and stormy time, but he will succeed in delivering on the promises we made.
“And under the circumstances, I am very clear that we have to act quickly to start this plan.”
On whether the balance sheet office will publish a forecast before the medium-term financial plan:
She also said the government “simply did not have time” to publish the OBR data along with the Kwarteng mini-budget: “It takes time to produce those forecasts…we simply didn’t have time to go through this process because it was such a very emergency situation.”
She promised that the Office of Budget Responsibility “will be an integral part of the medium-term financial plan.”
But when asked if she would publish a forecast before the end of November, Truss replied, “Well, no, for the next reason, Laura, she’s not ready yet.”