Financial markets crisis: SNP's Ian Blackford warns 'worst yet to come' from Liz Truss's Government

Ministers have insisted the UK Government remains committed to “spending discipline” after Chancellor Kwasi Kwarteng’s £45 billion mini-budget tax cuts caused havoc in financial markets.

As Tories head to Birmingham for their annual conference starting today, Welsh secretary Sir Robert Buckland said they were “absolutely committed” to funding their commitments amid signs ministers are preparing a major squeeze on public spending.

Earlier Liz Truss acknowledged Mr Kwarteng’s “fiscal event” had resulted in “disruption” – with the pound slumping to a record low against the US dollar and the Bank of England forced to intervene to prevent a collapse of the pensions industry.

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But writing in a national newspaper, the Prime Minister insisted the Government had been right to act to get the economy growing and will be keeping “an iron grip on the national finances as part of our commitment to sound money”.

SNP Westminster leader Ian Blackford. Picture: PA
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Meanwhile in an article for The Daily Telegraph, Mr Kwarteng said he would be setting out a “credible plan” to get the public finances back on track with a “commitment to spending discipline”.

Sir Robert said the position would become clearer when the Chancellor unveiled his medium-term fiscal plan towards the end of next month spelling out how he will start bringing down debt as a percentage of national income.

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In an interview with the BBC Radio 4 Today programme, he said it would give “a high degree of reassurance to markets that, like its predecessors, this Government is absolutely committed to fiscal responsibility”.

His comments came after the Prime Minister again refused to commit to the annual uprating of benefits in line with inflation – something Rishi Sunak had promised to do when he was chancellor.

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Protesters call for an immediate freeze on energy bill. Picture: Lisa Ferguson

A key ally of the Prime Minister, levelling up secretary Simon Clarke, signalled minsters were looking to shrink the overall size of the state alongside falling tax rates.

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“My big concern in politics is that Western Europe is just living in a fool’s paradise whereby we can be ever less productive relative to our peers, and yet still enjoy a very large welfare state and persist in thinking that the two are somehow compatible over the medium to long term,” he said.

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