iz Truss has insisted that public spending will not be cut as post-budget market turmoil continues.
The Prime Minister faced PMQs for the first time since Chancellor Kwasi Kwarteng’s £43bn mini-budget handout unleashed chaos on financial markets.
Sir Keir Starmer asked Ms Truss if she would stick to a promise made during the Tory leadership race not to cut public spending.
He asked: “During the leadership contest the Prime Minister said ‘I’m very clear, I’m not planning to cut public spending.’ Will he stick to it?’
Ms Truss said: “Absolutely. We spend almost a trillion pounds on public spending. We spent £700 billion in 2010. What we will ensure is that in the medium term the debt comes down. But we will do this not by cutting public spending, but by making sure we spend public money well.
Sir Keir repeatedly asked the Prime Minister: “Who voted for this?”.
On Tuesday, senior Tories warned that economic confidence in the government would be further eroded if the chancellor tried to push through the controversial mini-budget policies without the support of Tory MPs.
It comes after the pound fell again after the governor of the Bank of England warned that an emergency support package for financial markets would end on Friday.
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Labor accused of sitting on the fence over energy price guarantee
The Prime Minister accused Labor of not saying whether it supported an energy price guarantee.
Responding to the claim that Labor was backing cuts to National Insurance, Labor leader Sir Keir Starmer said: “The Prime Minister knows very well that on this side we voted against raising National Insurance in the first place. She voted for it. So who’s doing the U-turn? Honestly.
“She’s still going ahead with £18bn of tax breaks for the richest firms and they haven’t even asked for it. She’s still gift-wrapping stamp duty for landlords, just when tenants are feeling the pinch.
“It still offers tax cuts for those living off stocks and shares. Why does she expect working people to foot the bill for her unfunded tax cuts for those at the top?’
Responding in the House of Commons, Prime Minister Liz Truss said: “The Leader of the Opposition is still not saying whether or not he supports our energy price guarantee. This is very relevant because it is the biggest part of our mini-budget.”
She added: “The whole opposition said people should be supported for six months. Does he think pensioners should have very high energy bills in March? Because that’s what will happen if he doesn’t support our guarantee on energy prices.”
The Prime Minister assures that fracking will only take place where it is supported by local residents
Asked by Labor MP Rosie Cooper if he could reassure West Lancashire voters who are concerned about the prospect of fracking, the Prime Minister said: “I can assure you that … that fracking will only go ahead in areas where there is local community support.” .
Starmer accuses PM of being ‘lost in denial’
Sir Keir Starmer accused Liz Truss of “dodging the issue, avoiding responsibility” and being “lost in denial”.
The Labor leader also told MPs about a couple from Wolverhampton who were on the verge of buying their first home, but because “the government’s rampant borrowing sent interest rates soaring” their mortgage offer was withdrawn.
He asked the Prime Minister if she understood why they were “absolutely furious” with her.
The Prime Minister replied: “The fact is that when I came into office people were faced with energy bills of up to £6,000. The party opposite is crying out, but he opposes the very package that we brought in, the energy price guarantee. That was the main part of the mini-budget that we announced.
“He refused to confirm whether or not he supports our two-year energy price guarantee, which protects families not just this winter but next winter.
“What we’re seeing is that we’re seeing interest rates going up globally. We do… they are rising globally in the face of Putin’s horrific war in Ukraine. What we are doing is helping people with lower stamp duty, helping people with their energy costs, reducing inflation with our energy package and keeping taxes low.
“I notice that the honorable gentleman had a Damascene conversion last night when he supported our cuts to National Insurance.”
“There will be no cuts in public spending,” Truss promises
Liz Truss has said she will keep her promise not to cut public spending.
Labor leader Sir Keir Starmer said: “During her leadership contest, the Prime Minister said, and I quote her exactly, ‘I’m very clear, I’m not planning any cuts in public spending.’ Will he stick to it?’
Mrs Truss replied: “Absolutely. Look, Mr Speaker, we are spending almost £1 trillion on public spending. We spent £700 billion in 2010. What we will ensure is that in the medium term the debt comes down. We will do this not by cutting public spending, but by making sure we spend public money well.
“And (Sir Keir) talks about our spending, which he doesn’t seem to support, the energy price guarantee. But the reality is that he cannot criticize us on the one hand for spending money and on the other hand claim that we are cutting public spending.
Sir Keir told Tory MPs: “They can rejoice. I hope they listened very, very carefully to that last answer, because other people will have listened very, very carefully.
“The budget will give families security for two winters,” the prime minister replies
Truss hit back at the Labor leader, saying the budget “delivers security for families over the next two winters”.
“It is predicted that we will see higher economic growth, lower inflation and more opportunities,” she said.
“The way our country will grow is through more growth, more jobs and more opportunity. Not through higher taxes, higher spending and his friends in the union putting hardworking people out of work.
Keir Starmer asks if the public will ever forgive the Tories for the ‘kamikaze’ budget.
Keir Starmer asked if Liz Truss thought the public would ever forgive the Tories if they continued with their “kamikaze budget”.
He asked: “Who voted for this? Not the homeowners who pay extra on their mortgages, not the working people who pay for tax cuts for the biggest companies, not even most of the MPs behind the Prime Minister who know you can’t pay for tax cuts ever- never.’
The Prime Minister has pledged to take action against no-fault evictions
The Prime Minister has pledged to take action to end no-fault evictions.
The Labor MP for Blackley and Broughton, Graham Stringer, told the House of Commons: “Spooking the markets and driving up the cost of borrowing and driving up the cost of mortgages is almost certainly an act of gross incompetence, not malice.
Liz Truss, pictured before PMQs on Wednesday
/ Reuters“But going back on the commitment to end no-fault evictions is an act of extreme callousness.
“Can the Prime Minister reassure the 11 million private tenants in this country that he will deliver on his commitment to end no-fault evictions?”
Mrs. Truss replied simply, “I can.”
On Tuesday, Downing Street said no decisions had been made on whether to pause the promised ban on Section 21 notices, which allow landlords to evict a tenant without having to give a reason.
Truss points to the “international” difficulties associated with economic turmoil
Keir Starmer asked the Prime Minister if she agreed with Jacob Rees-Mogg’s claims this morning that the budget was not to blame for the UK’s recent financial turmoil.
Liz Truss hinted at “international” pressures affecting the market as she avoided giving a direct answer.
“What we have done is we have taken decisive action to ensure that people are not faced with energy bills of £6,000 over two years,” she said.
“We have also taken decisive action to ensure that we do not face the highest taxes in 70 years amid a global economic slowdown and what we are ensuring is to protect our economy at this very difficult time in an international plan.”
She added that she remains confident that these measures will lead to “higher growth and slower inflation.”
Prime Minister’s questions begin
PMQs has begun. Liz Truss is due to face MPs for the first time since the chancellor unveiled her divisive mini-budget last month.
The shock drop in monthly growth is prompting fresh fears of a recession
Recession fears are rising after the UK economy unexpectedly shrank in August, adding to market uncertainty over the government’s plan for tax-cutting growth.
GDP fell 0.3 per cent in August, according to the Office for National Statistics, while the 0.2 per cent growth figure in July was cut to 0.1 per cent.
Economists are forecasting a fall in GDP when September data is released next month. If the final quarter of the year slips into negative territory, then Britain will officially be in recession – defined as two consecutive quarters of negative growth.