‘We have done the right thing’: Prime Minister Liz Truss defends mini-budget amid market turmoil

Published

3 years ago

September 29, 2022

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Liz Truss says her government has “done the right thing” in its mini-budget in order to get the economy growing.

Speaking to the BBC in a raft of local radio interviews this morning, the prime minister said “urgent action”, along with “controversial and difficult decisions”, needed to be taken to improve the situation in the UK.

She said she was “prepared to do that… because what is important to me is 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”.

UK economy latest news: Minister insists government won’t change course

Markets were thrown into turmoil after the government announced its mini-budget on Friday, which included a swathe of tax cuts – such as scrapping the rate of income tax for top earners, reversing the National Insurance rise and cancelling an increase to corporation tax.

Economists feared the amount of borrowing needed to pay for the policies and, as a result, the pound plummeted.

The Bank of England was forced to intervene to stop some pension funds collapsing by launching a temporary bond-buying programme as an emergency measure to prevent “material risk” to UK financial stability.

Yet, speaking in public for the first time since the fallout, Ms Truss still said the government had “done the right thing by taking action urgently”, despite the trouble that has followed, and she still believed in “sound money”.

She said the Treasury was “working closely” with the Bank of England, reiterating its independence, but claimed there were “difficult markets around the world” due to the war in Ukraine and that the problem in the UK was not homegrown.

But while the PM kept saying the “biggest part” of the government’s interventions was on the energy bills – introducing a cap on the average bill of £2,500 and equivalent help for businesses – this was announced over a week before the mini-budget and not thought to be the main reason for the market’s reaction.

Earlier, Chief Secretary to the Treasury Chris Philp admitted scrapping the top tax rate would only benefit the most wealthy in the country.

But questioned on whether that policy and others were fair to the wider public, the PM said: “The reality is having lower taxes across the board… helps everybody because it helps grow the economy and for too long the debate in this country has been about distribution, not how we grow our economy.

“It is not fair to have a recession, it is not fair to have a town where you are not getting the investment, it is not fair if we don’t get high-paying jobs in the future because we have got the highest tax burden in 70 years. That’s what is not fair.”

‘Sort this mess out’

The government is facing demands from opposition parties to recall parliament from its conference recess to deal with the economic problems.

At the end of his party’s conference on Wednesday, the Labour leader Sir Keir Starmer called on Mr Kwarteng to reverse Friday’s announcements “before any more damage is done”, telling Sky News that Ms Truss was a “danger” to the economy.

And this morning, Liberal Democrat leader Sir Ed Davey told Sky News: “Liz Truss, Kwasi Kwarteng and the rest of this amateur bunch need to get back to their offices, stop their conference and sort this mess out – come to parliament and be held accountable.”

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The Conservative Party conference is due to kick off on Saturday in Birmingham, but could be a tense affair, with several Tory MPs criticising their own government’s policies.

Several of the party’s big names, including former leadership contender and ex-Chancellor Rishi Sunak and previous Health Secretary Sajid Javid, are also thought not to be attending.

World

What’s it like with the National Guard on the streets of DC?

Published

2 hours ago

August 22, 2025

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What's it like with the National Guard on the streets of DC?

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What’s it like on the streets of DC right now, as thousands of federal police patrol the streets?

Who is Steve Witkoff, the US envoy regularly meeting Vladimir Putin and Benjamin Netanyahu to broker peace in Ukraine and Gaza?

And why is Californian Governor Gavin Newsom now tweeting like Donald Trump?

Martha Kelner and Mark Stone answer your questions.

If you’ve also got a question you’d like the Trump100 team to answer, you can email it to trump100@sky.uk.

You can also watch all episodes on our YouTube channel.

World

It’s been a confusing week – and Trump’s been made to look weak

Published

2 hours ago

August 22, 2025

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It’s been a confusing week.

The Monday gathering of European leaders and Ukraine’s president with Donald Trump at the White House was highly significant.

Ukraine latest: Trump changes tack

The leaders went home buoyed by the knowledge that they’d finally convinced the American president not to abandon Europe. He had committed to provide American “security guarantees” to Ukraine.

The details were sketchy, and sketched out only a little more through the week (we got some noise about American air cover), but regardless, the presidential commitment represented a clear shift from months of isolationist rhetoric on Ukraine – “it’s Europe’s problem” and all the rest of it.

Yet it was always the case that, beyond that clear achievement for the Europeans, Russia would have a problem with it.

Trump’s envoy’s language last weekend – claiming that Putin had agreed to Europe providing “Article 5-like” guarantees for Ukraine, essentially providing it with a NATO-like collective security blanket – was baffling.

Russia gives two fingers to the president

And throughout this week, Russia’s foreign minister Sergei Lavrov has repeatedly and predictably undermined the whole thing, pointing out that Russia would never accept any peace plan that involved any European or NATO troops in Ukraine.

“The presence of foreign troops in Ukraine is completely unacceptable for Russia,” he said yesterday, echoing similar statements stretching back years.

Remember that NATO’s “eastern encroachment” was the justification for Russia’s “special military operation” – the invasion of Ukraine – in the first place. All this makes Trump look rather weak.

It’s two fingers to the president, though interestingly, the Russian language has been carefully calibrated not to poke Trump but to mock European leaders instead. That’s telling.

The bilateral meeting (between Putin and Zelenskyy) hailed by Trump on Monday as agreed and close – “within two weeks” – looks decidedly doubtful.

Maybe that’s why he went along with Putin’s suggestion that there be a bilateral, not including Trump, first.

It’s easier for the American president to blame someone else if it’s not his meeting, and it doesn’t happen.

NATO defence chiefs met on Wednesday to discuss the details of how the security guarantees – the ones Russia won’t accept – will work.

European sources at the meeting have told me it was all a great success. And to the comments by Lavrov, a source said: “It’s not up to Lavrov to decide on security guarantees. Not up to the one doing the threatening to decide how to deter that threat!”

The argument goes that it’s not realistic for Russia to say from which countries Ukraine can and cannot host troops.

Would Trump threaten force?

The problem is that if Europe and the White House want Russia to sign up to some sort of peace deal, then it would require agreement from all sides on the security arrangements.

The other way to get Russia to heel would be with an overwhelming threat of force. Something from Trump, like: “Vladimir – look what I did to Iran…”. But, of course, Iran isn’t a nuclear power.

Something else bothers me about all this. The core concept of a “security guarantee” is an ironclad obligation to defend Ukraine into the future.

Future guarantees would require treaties, not just a loose promise. I don’t see Trump’s America truly signing up to anything that obliges them to do anything.

A layered security guarantee which builds over time is an option, but from a Kremlin perspective, would probably only end up being a repeat of history and allow them another “justification” to push back.

Image and reality don’t seem to match

Among Trump’s stream of social media posts this week was an image of him waving his finger at Putin in Alaska. It was one of the few non-effusive images from the summit.

He posted it next to an image of former president Richard Nixon confronting Soviet leader Nikita Khrushchev – an image that came to reflect American dominance over the Soviet Union.

That may be the image Trump wants to portray. But the events of the past week suggest image and reality just don’t match.

The past 24 hours in Ukraine have been among the most violent to date.

World

At least 17 dead in Colombia after car bombing and helicopter attack

Published

2 hours ago

August 22, 2025

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At least 17 dead in Colombia after car bombing and helicopter attack

At least 17 people were killed after a car bombing and an attack on a police helicopter in Colombia, officials have said.

Authorities in the southwest city of Cali said a vehicle loaded with explosives detonated near a military aviation school, killing five people and injuring more than 30.

Authorities said at least 12 died in the attack on a helicopter transporting personnel to an area in Antioquia in northern Colombia, where they were to destroy coca leaf crops – the raw material used in the production of cocaine.

Antioquia governor Andres Julian said a drone attacked the helicopter as it flew over coca leaf crops.

Colombian President Gustavo Petro attributed both incidents to dissidents of the defunct Revolutionary Armed Forces of Colombia (FARC).

He said the aircraft was targeted in retaliation for a cocaine seizure that allegedly belonged to the Gulf Clan.

Who are FARC, and are they still active?

The Revolutionary Armed Forces of Colombia, a Marxist guerrilla organisation, was the largest of the country’s rebel groups, and grew out of peasant self-defence forces.

It was formed in 1964 as the military wing of the Colombian Communist Party, carrying out a series of attacks against political and economic targets.

In 2016, after more than 50 years of civil war, FARC rebels and the Colombian government signed a peace deal.

It officially ceased to be an armed group the following year – but some small dissident groups rejected the agreement and refused to disarm.

According to a report by Colombia’s Truth Commission in 2022, fighting between government forces, FARC, and the militant group National Liberation Army had killed around 450,000 people between 1985 and 2018.

Both FARC dissidents and members of the Gulf Clan operate in Antioquia.

It comes as a report from the United Nations Office on Drugs and Crime found that coca leaf cultivation is on the rise in Colombia.

The area under cultivation reached a record 253,000 hectares in 2023, according to the UN’s latest available report.