Former chancellor Kwasi Kwarteng has admitted he has been “affected” by his own mini-budget which was blamed for creating economic turmoil while Liz Truss was prime minister.
However, he denied he was to blame for the wider economic situation and rising interest rates, which he said falls under the responsibility of the Bank of England.
Speaking to GB News’s Camilla Tominey, Mr Kwarteng was asked whether he had any sympathy with those facing higher mortgage costs.
“Of course I do”, he replied.
“I’m probably revealing too much: I’m on a tracker, so I’m affected as well. They’ve gone up considerably.”
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0:35
‘I’m cutting everything out just to survive’
Asked whether he had been “screwed by your own mini-budget?”, he replied: “No, not at all because Camilla we are mixing two things.”
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He added: “The Bank of England was in charge of inflation and my tracker rate and other people’s tracker rates will be linked to the Bank rate, and whatever margin you have to pay.
“And the reason why interest rates have gone up very high is because we’ve totally missed the goal on inflation, we’ve totally misjudged inflation.”
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Asked how much his mortgage bill had gone up by, Mr Kwarteng said: “A lot. We bought the house in 2021 so it’s gone up quite a bit since then.
“I’m just as exposed to interest rates as anyone else.”
In his mini-budget on 23 September, Mr Kwarteng unveiled £45bn in unfunded tax cuts and the promise to abolish the 45p top rate of tax.
The mini-budget, otherwise known as the “fiscal event”, triggered turbulence in the financial markets, sent the pound tumbling and led to an unprecedented intervention by the Bank of England stop pension funds collapsing and pushing mortgage rates up.
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0:46
Inflation should ‘fall over the coming months’
Mortgage costs increased significantly following the turmoil of the mini-budget, while lenders pulled a record number of mortgages in a single day the following week.
Last month, fixed mortgage rates rose again after a brief fall, according to financial information company Moneyfacts.
The quarter percentage point increase was smaller than some economists had expected, following the release of lower-than-anticipated inflation data last month.
Inflation currently stands at 7.9%.
Bank of England Governor Andrew Bailey defended the interest rate hike on the grounds it was necessary to bring inflation down to its 2% target.
“We know that inflation hits the least well off hardest and we need to make absolutely sure that it falls all the way back to the 2% target. That’s why we’ve raised rates to 5.25% today,” he said.
Sir Keir Starmer continues to face the threat of a major rebellion during a key vote on welfare reforms later – despite making last-minute concessions to disgruntled Labour MPs.
Work and Pensions Secretary Liz Kendall has confirmed that all existing claimants of the personal independence payment (PIP), the main disability benefit, will be protected from changes to eligibility.
The combined value of the standard Universal Credit allowance and the health top-up will rise “at least in line with inflation” every year of this parliament.
And an additional £300m for employment support for sick and disabled people in 2026 has been announced, which will rise every year after.
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10:54
Welfare cuts ‘needed to be made’
Ms Kendall has also promised that a consultation into PIP – “co-produced” with disabled people – will be published next autumn.
She said the U-turn on welfare cuts will cost taxpayers about £2.5bn by 2030 – less than half the £4.8bn the government had expected to save with its initial proposals.
But after announcing the U-turns, Labour MPs were still publicly saying they could not back the plans as they do not go far enough to allay their concerns.
Disabilities minister Stephen Timms would not say he was “confident” the proposals would pass the Commons when asked on Sky News’ Politics Hub with Sophy Ridge.
“We’ve got a very strong package, I certainly hope it passes,” he replied.
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1:49
‘Disabled people thrown under the bus’
A total of 86 charities united yesterday to call on MPs to reject the reforms, saying they will harm disabled people and calling it “a political choice”.
The likes of Oxfam, Child Action Poverty Group, Mind and Shelter said the bill has been brought to a vote without consulting disabled people and without any assessment “of its impact on health and employment outcomes”.
When asked to name “a single” disability organisation in favour of the reforms, Ms Kendall declined to do so.
Several Labour MPs indicated they would still vote against the changes, leaving the government in the dark over how big a rebellion it still may face.
Ms Kendall tried to allay their fears, telling MPs: “I believe we have a fair package, a package that protects existing claimants because they’ve come to rely on that support.”
Richard Burgon presented a petition to parliament yesterday evening against the cuts, signed by more than 77,000 people.
Several Labour MPs questioned why the vote was going ahead before the review into PIP is published – including Rachael Maskell, who said she could not “countenance sick and disabled people being denied support” and added: “It is a matter of conscience.”
Connor Naismith said the concessions “undoubtedly improve efforts to secure welfare reform which is fair”, but added: “Unfortunately, I do not believe these concessions yet go far enough.”
Image: Labour rebel Nadia Whittome said the government was ‘ignoring’ disabled people
Nadia Whittome accused the government of “ignoring” disabled people and urged ministers to go “back to the drawing board”.
Ian Byrne told the Commons he will vote against the “cruel cuts” to disability benefits because the “so-called concessions go nowhere near far enough”.
The vote will take place this evening, with coverage on Sky News’ Politics Hub live blog and on TV.
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