Liz Truss says she will ‘absolutely’ not cut public spending despite warning of £62bn shortfall
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”.
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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.
“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.”
Truss says last thing country needs is a general election – politics latest
Economists have suggested that to gain a grip on the national finances, the government will have to make spending cuts or tax rises worth tens of billions of pounds.
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.
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‘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.”
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‘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.”
A police officer has been injured after a night of violent protests outside an asylum hotel in Dublin – with six arrests made.
Bricks were thrown and fireworks were discharged outside the Citywest Hotel – with glass bottles used as missiles and a police van set on fire.
A Garda helicopter was also targeted with lasers, and the police service says some of those on the streets were seen carrying garden forks.
Pic: PA
Pic: PA
Commissioner Justin Kelly added: “This was obviously not a peaceful protest. The actions this evening can only be described as thuggery. This was a mob intent on violence.
“We will now begin the process of identifying those who committed crimes and we will bring those involved in this violence to justice.”
It is the second night of demonstrations after an alleged sexual assault in its vicinity in the early hours of Monday morning.
Some of the crowd threw stones and other missiles at the public order officers as they moved the protesters back – and water cannon was deployed at the scene.
A line of officers was preventing the protesters from approaching the hotel.
Police officers block protesters outside the hotel. Pic: PA
‘Those involved will be brought to justice’
Ireland’s premier, Taoiseach Micheál Martin, paid tribute to the officers who were on the frontline of the protests.
“There can be no justification for the vile abuse against them, or the attempted assaults and attacks on members of the force that will shock all right-thinking people,” he said.
Justice minister Jim O’Callaghan said those involved in the violence will be brought to justice.
“The scenes of public disorder we have witnessed at Citywest must be condemned,” he said.
“People threw missiles at Gardai, threw fireworks at them and set a Garda vehicle on fire.
“This is unacceptable and will result in a forceful response from the Gardai.
“Those involved will be brought to justice.”
‘No excuse’ for violence
The minister said a man had been arrested and had appeared in court in relation to the alleged assault in the vicinity of the hotel.
He added: “While I am not in a position to comment any further on this criminal investigation, I have been advised that there is no ongoing threat to public safety in the area.”
He said attacks on officers would “not be tolerated”, adding: “Peaceful protest is a cornerstone of our democracy. Violence is not.
“There is no excuse for the scenes we have witnessed.”
The demonstration on Monday night passed without a significant incident.
It comes two years after anti-immigrant demonstrators triggered a major riot in the centre of Dublin after three young children were stabbed.
A police van has been set on fire and missiles have been thrown at officers as protesters gathered outside a hotel used to house asylum seekers in Dublin.
It is the second night of demonstrations outside the Citywest Hotel after an alleged sexual assault in its vicinity in the early hours of Monday morning.
A large crowd has gathered in the area and members of the Garda’s public order unit have been deployed.
Footage from the scene showed a Garda vehicle on fire as well as several protesters displaying Irish flags.
Many protesters carried Republic of Ireland flags
Some of the crowd threw stones and other missiles at the public order officers as they moved the protesters back.
A Garda helicopter hovered overhead and a water cannon was deployed on the scene.
Ireland’s justice minister, Jim O’Callaghan, said those involved will be brought to justice.
“The scenes of public disorder we have witnessed at Citywest tonight must be condemned,” he said.
“People threw missiles at Gardai, threw fireworks at them and set a Garda vehicle on fire.
“This is unacceptable and will result in a forceful response from the Gardai.
“Those involved will be brought to justice.”
The minister said a man had been arrested and had appeared in court in relation to the alleged assault in the vicinity of the hotel.
He added: “While I am not in a position to comment any further on this criminal investigation, I have been advised that there is no ongoing threat to public safety in the area.
He said attacks on gardai will “not be tolerated”, adding: “Peaceful protest is a cornerstone of our democracy. Violence is not.
“There is no excuse for the scenes we have witnessed tonight.”
It was the second night of protest outside the hotel, which is being used as state accommodation for people seeking international protection. The demonstration on Monday night passed without a significant incident.
It comes two years after anti-immigrant demonstrators triggered a major riot in the centre of Dublin after three young children were stabbed.
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There are no plans for Donald Trump and Vladimir Putin to meet in person in the near future, according to a White House official.
The presidents last week agreed to meet in Budapest after a phone call Mr Trump called “extremely frank and trustful”.
The US leader suggested it was possible it could happen within a fortnight, though no date was set.
However, it appears that’s now off the table – and there are fears the meeting could be shelved altogether due to Russia‘s rigid stance on the Ukraine war.
The White House official, speaking to Sky’s US partner network NBC, said secretary of state Marco Rubio and Russian foreign minister Sergei Lavrov had spoken on Tuesday.
The call was described as “productive” but the official added there was no plan for the presidents to meet “in the immediate future”.
The last Trump-Putin meeting was in Alaska in August, but it ended without any meaningful progress towards a ceasefire.
The Budapest plan was announced shortly before Ukrainian President Volodymyr Zelenskyy travelled to Washington last Friday to try to get approval for long-range Tomahawk missiles.
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Why Tomahawks are off the table
Mr Zelenskyy accused the Russian leader of acting out of fear Ukraine could get the green light and the ability to hit targets far deeper into Russia.
In his nightly address on Tuesday, he said Russia “almost automatically became less interested in diplomacy” after it became clear Mr Trump had backed away from any decision on the Tomahawks.
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Professor Michael Clarke answers your questions on the Ukraine war.
Two US officials told Reuters that plans for the Budapest meeting had stalled over Russia’s insistence any peace deal must give it control of all of the Donbas region.
Those terms are said to have been reiterated over the weekend in a private communique known as a “no paper”.
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The Kremlin’s refusal to budge effectively rejects Mr Trump’s latest assessment that the frontlines should be frozen as they are.
The president shifted position last week after previously telling the UN General Assembly that Ukraine could win back all the land it has lost.
Read more:
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UK ‘ready to spend over £100m’ on possibly sending troops to Ukraine
Ukraine and European nations issued a joint statement on Tuesday insisting “international borders must not be changed by force” and accusing Russia of “stalling tactics”.
But, in an apparent effort to keep the US leader onside, it added: “We strongly support President Trump’s position that the fighting should stop immediately, and that the current line of contact should be the starting point of negotiations.”
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Trump: ‘We can end this war quickly’
Kremlin spokesman Dmitry Peskov gave the impression his country was in no rush to arrange another Trump-Putin meeting, saying on Tuesday “preparation is needed, serious preparation”.
Such talk is likely to increase concerns Russia does not want to stop fighting and is “playing” President Trump – all while continuing to launch drone barrages at Ukrainian cities.
Russia currently holds about a fifth of Ukraine after its invasion in February in 2022. It also annexed the Crimean peninsula in 2014.
Meanwhile, NATO’s secretary general Mark Rutte is travelling to Washington to meet with President Trump on Wednesday.
He will “discuss various aspects related to NATO’s support to Ukraine and to the US-led efforts towards lasting peace”, an official for the alliance said.
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