Truss refuses to commit to more tax cuts in apparent row-back on Kwarteng comments
Liz Truss has refused to commit to more tax cuts in an apparent row back of earlier comments from Kwasi Kwarteng.
Truss today told BBC London that it was important to be “fiscally responsible” and to “bring debt down over time”, after being asked if she would bring in more tax cuts.
Truss and Kwarteng’s package of tax cuts – including a cut to the top rate of Income Tax from 45p to 40p – will be funded by £45bn+ of extra borrowing and came just after announcing an estimated £100bn energy support package.
The chancellor on Sunday said there was “more to come” on tax cuts and supply side reform in an intervention that may have helped accelerate this week’s sell-off of UK bonds, according to some City figures.
There has been speculation that Kwarteng’s comments also angered Number 10.
One City insider said: “You’ve got this sense of further potential tax cus talked about and further supply side reforms. All very welcome, but how will that balance with spending cuts later on?
“That sort of talk made markets jump further.”
Truss’ apparent row back comes after a series of car crash interviews this morning, which have been roundly criticised.
Bond yields spiked during the hour of eight back-to-back BBC local radio interviews, which saw many long pauses from the Prime Minister and a lack of detail on her plans.
The FTSE100 also suffered large losses today, ending down 1.77 per cent.
Truss broke cover for the first time in four days to speak to eight local radio stations back-to-back this morning, after the Bank of England had to step in yesterday to stop the collapse of a series of British pension funds.
The Bank is buying up £65bn of bonds to stabilise gilt yields, which have surged since last Friday, and calm the markets.
The first question Truss faced from BBC Radio Leeds was “where have you been?” while all this was happening and it only got worse from there as the morning progressed.
She went on a series of BBC local TV station interviews this afternoon and blamed the past week’s markets turmoil on “global factors”, like the war in Ukraine.
“I think we’re in a very serious situation. It’s a global crisis which has been brought about by the aftermath of Covid, and Putin’s war in Ukraine,” she said.
The past week’s crisis has seen the Tories tank in the polls, with a YouGov survey out today giving Labour a record 33-point lead.
The poll had the Tories on just 21 per cent, while Labour stormed ahead to 54 per cent.