How significant is Liz Truss’s pledge on public spending cuts? | Sam Coates
Liz Truss has said publicly what Downing Street has said privately for some time: that there will “absolutely” be no public spending cuts.
The prime minister wants to be seen sticking to the promise she made during the Tory leadership campaign. It drew gasps in the chamber and sounds like a big deal: but it’s complicated and some caution is required.
This is a more wide-ranging commitment than the line from the Treasury for the last couple of weeks that the chancellor, Kwasi Kwarteng, would stick to the three-year spending plans set out under Boris Johnson’s government in 2021.
However there is much public spending outside of Whitehall departmental totals presumed to be in the firing line, as this government works out how to credibly fill the black hole created by the mini-budget with its tax cuts and energy price plan. And post-2025 spending settlements are clearly under fire.
Politics latest: PM pledges not to cut public spending and says ‘last thing’ country needs is a general election
This does represent another, tougher self-imposed limit to her options. But how significant is it?
It’s very important to remember that much of the debate is not necessarily about cuts in absolute terms, but about growing more slowly.
That’s the nub of the very public debate the cabinet has been having about whether to uprate – or increase – benefits by wages or inflation.
In either scenario, the budget grows, just more slowly by the former than the latter.
The challenge is that inflation – at recent record highs – will eat into these increasing budgets, in a way that will feel like public spending cuts. Often spending review settlements are presented once inflation is taken into account.
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Truss ‘absolutely’ won’t reduce spending
This government can keep the absolute figure of spending level for years, but each pound available will go less far.
It’s also unclear how you make the tens of billions needed to cover the additional borrowing that Ms Truss’s mini-budget created.
But there’s much we don’t know about what Mr Kwarteng will need to do on 31 October: we don’t know the actual size of the black hole (could it be materially less than the £60bn+ forecast by the IFS?), could the renewable energy “windfall tax”-style deal raise tens of billions, could other Treasury “tricks” – like raising the state pension age and increasing future migration programmes – also flatter the public finances?
There’s an awful lot we don’t know.
It’s also important to remember that if you’ve just spent £200bn more on public spending in the first month of the Truss government it’s actually quite easy to say public spending won’t dip below the starting baseline – presumably the day she came to government – in future.
So the PM may well be telling people that the government isn’t shrinking spending but it might not feel like that to voters.
Donald Trump has threatened Russia with more sanctions after a series of deadly strikes across Ukraine, as he said of Vladimir Putin: “What the hell happened to him?”
The US president appeared aghast at the conduct of his counterpart in the Kremlin after drone and missile attacks in Kyiv and other Ukrainian cities left 12 people dead and dozens more injured.
Trump criticises Putin – latest updates
Speaking to reporters at an airport in New Jersey ahead of a flight back to Washington, Mr Trump said: “I’m not happy with Putin. I don’t know what’s wrong with him.”
“He’s killing a lot of people,” he added. “I’m not happy about that.”
Mr Trump – who said he’s “always gotten along with” Mr Putin – told reporters he would consider more sanctions against Moscow.
“He’s sending rockets into cities and killing people, and I don’t like it at all,” he said.
Ukraine said the barrage of strikes overnight into Sunday was the biggest aerial attack of the war so far, with 367 drones and missiles fired by Russian forces.
It came despite Mr Trump repeatedly talking up the chances of a peace agreement. He even spoke to Mr Putin on the phone for two hours last week.
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Hundreds of drones fired at Ukraine
‘Shameful’ attacks
Volodymyr Zelenskyy has said Ukraine is ready to sign a ceasefire deal, and suggested Russia isn’t serious about signing one.
In a statement after the latest attacks on his country, he urged the US and other national leaders to increase the pressure on Mr Putin, saying silence “only encourages” him.
Mr Trump’s envoy for the country, Keith Kellogg, later demanded a ceasefire, describing the Russian attacks as “shameful”.
Three children were among those killed in the attacks, explosions shaking the cities of Kyiv, Odesa, and Mykolaiv.
Ukrainian siblings Tamara, 12, Stanislav, eight, and Roman, 17, were killed in Russian airstrikes. Pic: X/@Mariana_Betsa
Before the onslaught, Russia said it had faced a Ukrainian drone attack on Sunday. It said around 100 were intercepted and destroyed near Moscow and in central and southern regions.
The violence has escalated despite Russia and Ukraine completing the exchange of 1,000 prisoners each over the past three days.
Donald Trump says he will delay the imposition of 50% tariffs on goods entering the United States from the European Union until July, as the two sides attempt to negotiate a trade deal.
It comes after the president of the European Commission, Ursula von der Leyen, said in a post on social media site X that she had spoken to Mr Trump and expressed that they needed until 9 July to “reach a good deal”.
The US president had last Friday threatened to bring in the 50% tariffs from 1 June, as European leaders said they were ready to respond with their own measures.
But Mr Trump has now said that date has been put back to 9 July to allow more time for negotiations with the 27-member bloc, with the phone call appearing to smooth over tensions for now at least.
Speaking on Sunday before boarding Air Force One for Washington DC, Mr Trump told reporters that he had spoken to Ms Von der Leyen and she “wants to get down to serious negotiations” and she vowed to “rapidly get together and see if we can work something out”.
The US president, in comments on his Truth Social platform, had reignited fears last Friday of a trade war between the two powers when he said talks were “going nowhere” and the bloc was “very difficult to deal with”.
Mr Trump told the media in Morristown, New Jersey, on Sunday that Ms Von der Leyen “just called me… and she asked for an extension in the June 1st date. And she said she wants to get down to serious negotiation”.
“We had a very nice call and I agreed to move it. I believe July 9th would be the date. That was the date she requested. She said we will rapidly get together and see if we can work something out,” the US president added.
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Shortly after, he wrote on Truth Social: “I agreed to the extension – July 9, 2025 – It was my privilege to do so.”
On his so-called “liberation day” last month, Mr Trump unleashed tariffs on many of America’s trade partners. But since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.
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12 May: US and China reach agreement on tariffs
Much of his most incendiary rhetoric on trade has been directed at Brussels, though, even going as far as to claim the EU was created to rip the US off.
Responding to his 50% tariff threat, EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.
“We stand ready to defend our interests.”
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