Financial markets crisis: No sign of U-turn as Liz Truss admits to ‘disruption’ following tax-cutting package

Liz Truss has shown no signs of a U-turn on any aspects of her tax-cutting package after Friday’s meeting between the Prime Minister, Chancellor Kwasi Kwarteng and the Office of Budget Responsibility (OBR) in a bid to reassure markets after days of turmoil.

In an interview with broadcasters in north-west Kent, the Prime Minister sought to defend the decision not to publish a forecast from the independent spending watchdog until November 23.

It comes as the UK Government’s energy price cap to shield households and businesses from the worst of the impact of soaring oil and gas prices comes into effect on Saturday.

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Both Ms Truss and Mr Kwarteng – under fire from economists, the opposition and some Tory MPs after the debacle of recent days – promised to “work closely” with the OBR and said “scrutiny” was valued.

Red paint splattered on the entrance to Scottish Power headquarters in Glasgow following an Affordable energy demonstration. Picture: Andrew Milligan/PA Wire
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But the SNP’s Westminster leader Ian Blackford called on Mr Kwarteng to resign or be sacked following the decisions made around the mini-Budget.

Mr Blackford said: “It’s time for this clueless Chancellor to pack his bags and go.

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“Alongside the Prime Minister, Kwasi Kwarteng have taken a wrecking ball to the UK’s finances, leaving millions of families across the UK in deep distress.“And now we are being told that despite the OBR publishing their forecast to the UK Government, the Treasury will delay the publication until November 23. This is simply unacceptable.

“Within days of taking office, we have once again seen the devastating consequences of Scotland being shackled to this outdated, corrupt Westminster system. People’s mortgages, pensions and savings are all being badly hit – and yet the Tories have no plan to fix it."

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On Friday, the Prime Minister said there had not been enough time for the OBR to put together a full forecast for the mini-budget.

“What was really important is we acted to help families as soon as we could and what we’re seeing this weekend is the energy price cap guarantee coming in so that a typical family won’t pay more than £2,500 on their energy bills,” she said.

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“If you remember, we were looking at figures of up to £6,000, so it was important we acted quickly.

“In that timescale, there couldn’t be a full OBR forecast but we are committed to the OBR forecast.

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“We are working together with the OBR.

“There will be an event on November 23 where the policies are fully analysed by the OBR.

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“But it was a real priority to me to make sure we are working to help struggling families.

“We are also dealing with the economic slowdown, which is being felt globally, so that is why we had to act quickly in the circumstances.”

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Ms Truss, pressed on whether this week’s crisis was of her own making, admitted there has been “disruption”.

She insisted the Government was working closely with the Bank of England, which was this week forced to step in to reassure the markets in an extraordinary intervention.

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“It was very, very important that we took urgent steps to deal with the costs that families are facing this winter, putting in place the energy price guarantee, for which we have had to borrow to cover the costs of that, but also making sure that we are not raising taxes at a time when there are global economic forces caused by the war in Ukraine that we need to deal with,” she said.

“Of course we are working closely with the Bank of England. It is very important that monetary and fiscal policy is co-ordinated and I recognise there has been disruption, but it was really, really important we were able to get help to families as soon as possible.

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“That help is coming this weekend because this is going to be a difficult winter and I am determined to do all I can to help families and help the economy at this time.”

The fallout of recent days, combined with a YouGov poll putting her party 33 points behind Labour, has caused unease among Ms Truss’s MPs.

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Some have openly predicted the party may lose the next general election, though the Prime Minister declined to comment when asked if she is worried about such a proposition.

She said: “What is really important to me is we do what we can to support families and businesses this winter. What is important to me is that we get Britain’s economy back on track, that we keep taxes low, that we encourage investment into our country and that we get through these difficult times.

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“What we are seeing around the world is we are seeing pressure. The Federal Reserve in America has raised their interest rates. We are seeing pressure on currencies. We are seeing governments announce energy schemes around the world.

“What is important to me is that we support the British public and British businesses through this difficult winter and that is 100 per cent my focus as Prime Minister.”

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Under the energy price guarantee, which limits the unit price paid for electricity and gas, means the annual bill for a typical household in England, Scotland and Wales will be held to around £2,500 for the next two years.

A similar scheme will operate in Northern Ireland.

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The Government has said that without action, energy bills had been expected to hit £3,500 from October rising as high as £6,500 next year.

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