Liz Truss has pledged not to cut public spending to balance the books in her first PMQs since the chancellor’s contentious mini-budget – despite a leading economics-focused think tank warning the government is billions short of the sums needed.
The prime minister insisted she was “absolutely” not planning public spending reductions, but vowed that taxpayers’ money would be used well.
Her pledge comes as the government continues to be under pressure for the market turmoil that erupted after the government announced its £45bn package of unfunded tax cuts last month.
Speaking to Sky News after PMQs, Mel Stride, the Chair of the Treasury Select Committee, said that Chancellor Kwasi Kwarteng should not take the reversal of some of his tax cuts “off the table”.
He said that “holding the line” on the measures announced in his mini-budget will be even more difficult following Ms Truss’ comments on public spending, and that 31 October – the date of the chancellor’s debt-cutting plan being published– is a moment for a “reset”.
Please use Chrome browser for a more accessible video player
1:32
Tories ‘must get back to being fiscally responsible’
He told political editor Beth Rigby: “(Chancellor Kwarteng) has to be so careful that he doesn’t take any chances, he has to be sure the markets are going to like what they hear, that’s why I think rowing back on the tax cuts have to remain on the table.
“It’s extraordinarily important that whatever the chancellor comes forward with on the 31st, that it cuts it with the market.
More on Conservatives
Related Topics:
“If there is any doubt in his mind about anything he is doing, he would do well to think again, he has got to play it ultra safe.”
The “Green Budget”, from the Institute for Fiscal Studies and Citi, the investment bank, warned this week that the chancellor would have to cut spending or raise taxes by £62bn if he is to stabilise or reduce the national debt, as he has repeatedly promised in recent weeks.
That shortfall is a direct consequence of the measures announced since the Truss government took office, which include its reversal of various tax increases such as corporation tax and national insurance and its energy price guarantee.
Chancellor Kwasi Kwarteng would instead have to carry out dramatic cuts, the think tank said, potentially reducing government investment and slashing public spending on departments that have already been squeezed during the austerity years.
The cost of government spending increased on Wednesday, with the pound falling against the dollar.
Please use Chrome browser for a more accessible video player
1:42
‘Will she reverse “kamikaze budget”?’
‘Kamikaze budget’
At PMQs, Sir Keir Starmer reminded Ms Truss that during her leadership campaign over the summer she had pledged: “I’m not planning public spending reductions.”
Asked if she was going to stick to that, the prime minister replied: “Absolutely… We are spending almost £1tn of public spending. We were spending £700bn back in 2010.
“What we will make sure is that over the medium term the debt is falling. But we will do that not by cutting public spending but by making sure we spend public money well.”
The Labour leader once again called for the government to reverse their “kamikaze budget”, warning Conservative MPs that voters will not forgive their party if they “defend” it.
‘Ducking responsibility’
Sir Keir also accused the prime minister of “ducking responsibility” for the consequences of her government’s economic policies and of being “lost in denial”.
“Who voted for this?” he questioned.
Ms Truss responded: “The way that we will get our country growing is through more jobs, more growth, more opportunities, not through higher taxes, higher spending and his friends in the union stopping hard-working people getting to work.”
‘No-fault’ evictions pledge
Also during PMQs, Ms Truss committed to honouring a 2019 Tory manifesto pledge to scrap “no-fault” evictions of private renters in England.
There had been reports earlier this week that the government could try and shelve the commitment.
On Tuesday, Downing Street said no decisions had been made on whether to pause a promised ban on Section 21 notices, which allow landlords to evict a tenant without giving a reason.
Labour MP Graham Stringer asked Ms Truss: “Can the PM reassure the 11 million private renters in this country that she will carry out her commitment to get rid of no-fault evictions?”
Ms Truss replied: “I can.”
Please use Chrome browser for a more accessible video player
3:45
‘PM ignoring mini-budget damage’
Energy help
The prime minister also announced that Jacob Rees-Mogg, the business secretary, is working on a scheme to help households and businesses bring down their energy costs.
Last Friday, Ms Truss ruled out launching an energy-saving public information campaign after warnings from the National Grid Electricity System Operator that planned three-hour power blackouts could be imposed in some areas.
Only two days ago Downing Street had defended Ms Truss’s decision not to launch a “bespoke” energy-saving public information campaign during the energy crisis, saying it is down to individuals to decide what is right for them.
Mr Kwarteng has already dropped plans to abolish the 45% tax rate on earnings over £150,000 after internal criticism of the policy, though he has insisted he remains committed to the rest of his mini-budget.
Asked what happens after the Bank stops buying bonds on Friday, the chancellor said: “Well, it’s a matter for the governor.”
Mark Carney’s Liberal Party has won the election in Canada, according to Canadian broadcasters, but it is too soon to say whether they will form a majority government.
Mr Carney, who took over as prime minister after Justin Trudeau stepped down earlier this year, has beaten the leader of the Conservative Party Pierre Poilievre, according to CBC and CTV News projections.
However, it is too soon to say whether the Liberals will form a majority government, they added. The party has not yet secured the 172 electoral districts it needs for a majority.
Image: Conservative leader Pierre Poilievre. Pic: Reuters
The election initially appeared to be a clear-cut race for the opposition Conservatives, who were enjoying a double-digit lead over the Liberals before Mr Trudeau resigned, and an intervention by Donald Trump led to a surge in support for Mr Carney’s party.
Mr Trump has repeatedly called for Canada to become the 51st US state since he was elected president for a second time and has imposed sweeping tariffs on Canada.
Please use Chrome browser for a more accessible video player
1:02
Trump on why he wants Canada to be 51st state
Mr Carney has vowed to take a tougher approach with Washington over its tariffs and has said Canada will need to spend billions to reduce its reliance on the US.
Image: Liberal supporters celebrate after Canadian broadcasters project their party has retained power. Pics: Reuters
If Mr Carney’s party only captures a minority of the House’s 343 seats, he will be forced to negotiate with other parties in order to stay in power.
Such minority governments rarely last longer than two-and-a-half years in Canada.
Canadians went to the polls after 11 people were killed in a deadly attack at a Vancouver street fair over the weekend that led to the suspension of campaigning for several hours.
Police have ruled out terrorism and said the suspect is a local man with a history of mental health issues.
Follow The World
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Mr Carney previously ran Canada’s central bank and later became the first non-Briton to become governor of the Bank of England.
This breaking news story is being updated and more details will be published shortly.
Please refresh the page for the fullest version.
You can receive Breaking News alerts on a smartphone or tablet via the Sky News App. You can also follow @SkyNews on X or subscribe to our YouTube channel to keep up with the latest news.
Power supplies have been returning in Spain and Portugal after large parts, including the capitals Madrid and Lisbon, were hit by a huge outage on Monday.
Millions of people were caught up in the chaos after the mass blackout brought many areas to a standstill, with trains stopping, planes grounded, internet and mobile phone services cut, traffic lights and ATMs down, and some routine hospital operations suspended.
Spain‘s interior ministry declared a national emergency and the two countries’ governments convened emergency cabinet meetings as officials tried to find out what caused the outage which started around 12.30pm (11.30am UK time).
Image: A police car passes as vehicles wait in a traffic jam on the other side of the road in Madrid. Pic: Reuters
Image: People gather outside Barcelona-Sants train station during a power outage. Pic: Reuters
About half the electricity supplies in Spain have now been restored by the grid operator, Prime Minister Pedro Sanchez said on Monday evening, adding the rest should be back by Tuesday.
In a televised address, Mr Sanchez said authorities have not yet worked out what had caused the blackout in the Iberian Peninsula and were not ruling anything out.
He asked the public to refrain from speculation, and urged people to call emergency services only if really necessary.
Eduardo Prieto, the head of operations at Spanish power grid operator Red Electrica, said the event was unprecedented, calling it “exceptional and extraordinary”.
Meanwhile, Portugal‘s Prime Minister Luis Montenegro said power in his country would be fully restored in the coming hours.
He said all the state services remained operating in the country despite all the difficulties. He also said there was “no indication” a cyberattack was the cause.
Image: A chef in Madrid works in a dark kitchen with the aid of his phone’s flashlight. Pic: Reuters
Image: Fans are seen after Madrid Open matches were suspended due to a power outage. Pic: Reuters
‘Rare atmospheric phenomenon’
Portugal’s grid operator Ren claimed the outage was caused by a fault in the Spanish electricity grid, related to a “rare atmospheric phenomenon”.
Ren says that, due to extreme temperature variations in Spain, there were “anomalous oscillations” in very high-voltage lines.
It also says that given the complexity of the issue, it could take up to a week for the network to fully normalise again.
It comes as France briefly lost power following the outages in Spain and Portugal, French grid operator RTE said.
Parts of Madrid underground were evacuated and traffic lights in the city were not working, according to local media.
Play was suspended at the Madrid Open tennis tournament due to the outage – with Britain’s Jacob Fearnley forced off court in a critical moment during his third-round tie with Grigor Dimitrov.
The loss of power affected scoreboards and the camera above the court. Organisers later announced the tournament would not be able to resume on Monday, with afternoon and evening sessions cancelled.
What has been affected by the blackout?
Here’s what we know has been impacted so far:
:: Transport, including trains, metros and airports – with traffic lights also down.
:: Internet and mobile coverage.
:: Lighting in homes, businesses and other buildings, though backup generators are in place in many.
:: ATMs and card payments, as well as most till systems.
:: Lifts in buildings are stuck.
:: Electric car chargers and fuel pumps are also down.
:: Air conditioning units.
:: A significant quantity of water pumps, meaning some homes have no access to drinking water.
Airports affected
Aena, which runs international airports across Spain, said earlier that “some incidents were occurring” at the airports due to the outage.
The company added in a statement: “Contingency generators are active. Please check with your airline, as there may be disruptions to access and ground transportation.”
People ‘had nowhere to go’
Maddie Sephton, who is from west London, was on the Madrid Metro when the power outage occurred.
“We got on the train and everything was fine,” she told Sky News. “But then everything went dark.”
She was stuck on the train for 20 minutes until a staff member opened the doors manually.
Image: A metro worker passes underneath barricade tape to enter Legazpi Metro station after the outage. Pic: Reuters
Image: A view shows a transmission tower during a power outage near Barcelona in Spain. Pic: Reuters
Mrs Sephton says she was on her way to the airport at the time – and had to exit the station by walking up 15 flights of stairs with her luggage.
“No lifts are operating – making it difficult for elderly people with limited mobility,” she added.
Above ground, she said that “everyone is just standing around and waiting”.
Image: Medical staff relocate a patient in Pamplona, Pic: AP
Bars were unable to take card payments, cash machines are down, and traffic lights weren’t working either.
“I currently don’t have any internet service and just €15 in my wallet – I can’t withdraw any money from the ATM,” she added.
“A couple have offered to let us get a ride in their taxi to the airport. Their flight is at 4.30pm so they’re pretty relaxed – but my flight back to London is at 3pm and I’m nervous.”
Mrs Sephton said: “People are just walking but have nowhere to go, and nothing to do.”
Image: Traffic lights have stopped working following a power outage in downtown Lisbon, Portugal. Pic: AP
Image: People try to board a crowded bus after the subway stopped running following a power outage in Lisbon, Portugal. Pic: AP
Meanwhile, thousands of passengers had to be evacuated after the blackout left the metro service in Barcelona without power.
The blackout was also reported to have forced the closure of the city’s tram system and rendered some traffic lights there inoperable.
It has also impacted medical facilities, with hospitals in Madrid and Catalonia forced to suspend routine medical work. Staff have been able to attend to critical patients using power from backup generators.
Follow The World
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
It comes as Metrovalencia, the urban rail system, encompassing both metro and tram services in Valencia, said traffic in the city was “disrupted” due to a “general power outage in the city”.
The outage also hit the Portuguese capital Lisbon and surrounding areas, as well as northern and southern parts of the country.
Portugal’s government said the incident appeared to stem from problems outside the country, an official told national news agency Lusa.
“It looks like it was a problem with the distribution network, apparently in Spain. It’s still being ascertained,” Cabinet Minister Leitão Amaro was quoted as saying.
It’s likely the outage will surpass Europe’s largest blackout to date when 56 million people in Italy and Switzerland lost power for up to 12 hours in 2023.
The cause of the outage is unclear. Portugal’s grid operator has blamed a “rare atmospheric phenomenon” that caused “anomalous oscillations” in high voltage power lines in Spain.
More from Science, Climate & Tech
Spain’s grid operator has yet to respond to that or provide an update on the cause. But it’s unlikely whatever caused the outage was a single, localised event.
Please use Chrome browser for a more accessible video player
1:07
Mayhem in Spain after major power outage
A major power line going down can cause a large outage – as it did in 2021, when an interconnector between France and Spain failed leaving a million people without power for a few hours.
But it’s unlikely to cause a system-wide failure of the kind we’re seeing now.
However, when things do start to fail on a power grid, they can cascade uncontrollably.
Keeping a grid running is a constant and highly complex balancing act.
Image: People outside a terminal at Lisbon Airport during the blackout. Pic: Reuters
Spain’s mains AC electricity supply grid, like ours in the UK, runs at 50Hz. That frequency is based on the speed at which generating hardware such as gas and nuclear turbines spin.
If there are sudden fluctuations in power supply or demand – a power station failing or a high voltage power line going down, for example – the frequency of AC power in the transmission lines changes and circuit breakers trip to protect either the transmission network, or power plant hardware from burning out.
To prevent such failures, grid engineers constantly measure and forecast supply and demand to keep the grid balanced.
To protect the system in emergencies, they occasionally have to “shed load” by cutting power to parts of the grid – the reason we’ve all experienced the occasional short-lived power cut.
But if balance is lost, a grid can fail in a domino effect with sections of the grid tripping, then power plants shutting down to protect themselves from the drop in demand, one after another.
The challenge now, and it’s a nightmare for Spain and Portugal’s power engineers, is to gradually restore the grid section by section while maintaining the balance of supply and demand.
Act too fast, and the grid can trip again. Take too long and some power plants or substations might struggle to restart – especially if they rely on battery power to do so.
While some regions of Spain have already had power restored, and Portugal says its power will be back to normal within hours, it could take much longer for the system to be fully restored.