'What on Earth were you thinking?': Liz Truss grilled on mini-budget amid market turmoil
At times, Liz Truss was lost for words during a gruelling round of local radio interviews - Libby Wiener reports
Liz Truss faced a bruising round of questions across local radio stations on the market turmoil sparked by the government's mini-budget - with one listener asking "what on Earth were you thinking?"
Appearing for public questioning for the first time since the much-criticised budget was revealed on Friday, the prime minister was lost for words when asked by a BBC radio station about the impact of her tax-cutting agenda on mortgages.
As she defended her plan to promote economic growth and provide aid with rising energy bills, BBC Radio Stoke’s presenter pointed out that homeowners' mortgages fees were rising by more than the amount they would save from the energy support.
After a silence, the prime minister replied: “I don’t think anybody is arguing that we shouldn’t have acted on energy.”
Despite repeatedly being pressed on the increased cost of government debt and the sharp decline in the pound, Ms Truss insisted her government's measures were "the right plan".
This is despite the calls from the International Monetary Fund for the Treasury to "re-evaluate" its tax measures, which have sent investors into a panic.
Chancellor Kwasi Kwarteng, the architect of the mini-budget, was also under scrutiny on Thursday.
Asked if he had a message for the financial markets as he prepared to visit a local business in Darlington, Mr Kwarteng said: “Absolutely. We are sticking to the growth plan and we are going to help people with energy bills. That’s my two top priorities.”
Ms Kwarteng and the government "had to take decisive action", Ms Truss told BBC Radio Leeds.
Chancellor Kwasi Kwarteng defends his mini-budget as "absolutely essential" in "re-setting the debate" on economic growth
She added that the government's decision to slash taxes and borrow billions were necessary to "get the economy moving" and "deal with inflation".
“Of course there are elements of controversy, as there always are," she told Radio Norfolk.
Questions for the prime minister from Radio Kent listeners included: “What on Earth were you thinking?”, “how can we ever trust the Conservatives with our economy again?” and “are you ashamed of what you’ve done?”, the show’s presenter said.
Once again, Ms Truss replied that the mini-budget measures were necessary given the state the UK economy was in.
She later echoed her statements on Twitter.
Asked by BBC Radio Kent if she will reverse the policies unveiled in the mini-budget, Ms Truss replied: “I don’t accept the premise of the question."
And on BBC Radio Norfolk, she said the UK's "very, very difficult" economic situation had solely been caused by Vladimir Putin's war on Ukraine.
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.
The market turmoil had forced pension funds to sell government bonds to head off worries over their solvency, but this was threatening to see them suffer severe losses.
Mr Kwarteng has said the government is “absolutely committed” to the state pensions triple lock, after doubts were raised about its future.
On Thursday the chancellor was asked whether the lock was guaranteed to go up at this month’s inflation rate.
He replied: “The PM has been absolutely committed to the triple lock and we are absolutely committed to maintaining it.”
Concerns about the triple lock were raised after Treasury minister Chris Philp did not confirm whether benefits will be hiked in line with spiralling inflation.
He had told ITV News Political Editor Robert Peston that the matter was under consideration.
By this morning the bounce from the Bank of England's intervention was already fading amid more worry from investors.
'I think we have to look at what situation this country would have been in if we hadn’t acted'
As Ms Truss took to the airwaves to defend her plans, Sterling fell by 1% against the dollar, while the FTSE 100 Index in London dropped by more than 2%.
“It’s a difficult time and we’re facing a global economic crisis brought by Putin’s war in Ukraine," the prime minister told broadcasters later on Thursday morning.
"What was right was that Britain took decisive action to help people get through what is going to be a difficult winter.”
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“It is absolutely right that we always need to get value for taxpayers’ money. Every pound we take from somebody is a pound we could be spending on their future, on what they need to support themselves," the prime minister said.
“There are always ways that we can organise things more efficiently. What I want to make sure is that taxpayer money is focused on frontline services, on getting our GP appointments, making sure people can see a doctor, making sure we deliver on our road projects, all of those things people rely on us for.
“There are plenty of areas the government can become more efficient.”
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Mr Philp was earlier joined by his junior ministerial colleague Andrew Griffith in defending the government’s plans.
His Cabinet colleague Kemi Badenoch described the situation as “the elephant in the room” during her first overseas visit as trade secretary.
She said: “You would by now have heard the Bank of England taking short-term measures to provide stability – as is their job.
“My colleagues, including the chancellor, continue to work very closely with our institutions to support them in their aims while maintaining their independence.
"And we must look at all of this in the context of the fundamentals, which are that the UK economy is strong and we have a plan – a growth plan to cut taxes, promote enterprise and cut red tape for business.”
It all comes just days before Tory MPs and thousands of members will descend upon Birmingham for Ms Truss’ first party conference as PM.
Some of the party’s “big beasts”, including defeated leadership candidate Mr Sunak, are reportedly not attending the conference.
Other Tories, including Treasury Select Committee chair Mel Stride have warned “there’s a lot of concern within the parliamentary party, there’s no doubt about that” about the economic outlook.
Mr Stride also called for ministers to bring forward an independent analysis of their economic plans for the Office for Budget Responsibility as soon as possible.
Responding to Liz Truss’s local radio round on Thursday morning, Shadow Chancellor Rachel Reeves said: “The prime minister’s interviews this morning have made this disastrous situation even worse.
"Her failure to answer questions about what will happen with people’s pensions and mortgages will leave families across the country facing huge worry.
“It is disgraceful that the family finances of people across the country are being put on the line simply so the government can give huge unfunded tax cuts to the richest companies and those earning hundreds of thousands of pounds a year.”
She added: “This is a serious situation made in Downing Street and is the direct result of the Conservative government’s reckless actions.
“If the prime minister continues to prioritise saving her face over saving people’s homes, Tory MPs must join Labour in calling for Parliament to be recalled so this kamikaze budget can be reversed. Failure to do so will make them complicit in this reckless bout of economic self-harm.”
One UK based think-tank believes Truss’s economic plan could lead to Osborne-era cuts.
Torsten Bell, chief executive of the Resolution Foundation, called Friday’s mini-budget “the biggest unforced economic policy error of my lifetime”.
Mr Bell said: “Lower taxes combined with a loss of market confidence mean rising interest rates, leading to higher mortgages and lower living standards. But looking further ahead they will mean lower spending too.
“The intention may have been to emulate Margaret Thatcher, but the reality may involve looking a lot like George Osborne in the years ahead."