UK economic crisis: Liz Truss insists income tax cuts are 'right plan' amid rising energy costs and plunging pound

Prime Minister Liz Truss has insisted the UK Government’s tax-cutting measures are the “right plan” in the face of rising energy bills and to get the economy growing as she stressed she was prepared to take “controversial and difficult decisions”.

In her first public comments since the mini-budget market chaos, Ms Truss defended Chancellor Kwasi Kwarteng’s measures, insisting “urgent action” was needed, although she admitted the Government’s decisions have been “controversial”.

The Prime Minister told BBC Radio Leeds: “We had to take urgent action to get our economy growing, get Britain moving and also deal with inflation.

Prime Minister Liz Truss walks out of Number 10 Downing Street. Picture: Daniel Leal/AFP via Getty Images

“Of course that means taking controversial and difficult decisions, but I am prepared to do that as Prime Minister because what is important to me is that we get our economy moving, we make sure that people are able to get through this winter and we are prepared to do what it takes to make that happen.”

Ms Truss said the mini-budget was the “right plan”, in spite of mounting calls, including from the International Monetary Fund (IMF), for a U-turn on some of the policies announced last Friday after the pound sunk to a record low against the US dollar on Monday.

On Wednesday, the Bank of England launched an emergency government bond-buying programme to prevent borrowing costs from spiralling out of control and stave off a “material risk to UK financial stability”.

The Bank announced it was stepping in to buy up to £65 billion worth of government bonds – known as gilts – at an “urgent pace” after fears over the Government’s economic policies sent the pound tumbling and sparked a sell-off in the gilts market, which threatened to spark the collapse of some UK pension funds.

The FTSE 100 Index has also been hit by marked volatility amid the bond sell-off and wider global recession fears, falling by nearly 2 per cent in early trading on Thursday after a rollercoaster ride on Wednesday.

Ms Truss said it was “simply not true” when asked by BBC Radio Nottingham whether her mini-budget was a “reverse Robin Hood” that disproportionately benefited the most wealthy.

She said: “The biggest part of the package we announced is the support on energy bills, making sure that people across this country are not facing energy bills of more than £2,500 and that businesses can get through this winter.

“We were facing a situation where pubs were going to go out of business, where shops were going to go out of business.

“People were facing unaffordable energy bills and the package we presented in the energy statement, but also on the mini-budget last week – the biggest part of that is the help on energy.”