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.”
World
‘At least 798 killed’ at Gaza aid points – as medical charity warns acute malnutrition at all-time high
At least 798 people in Gaza have reportedly been killed while receiving aid in the past six weeks – while acute malnutrition is said to have reached an all-time high.
The UN human rights office said 615 of the deaths – between 27 May and 7 July – were “in the vicinity” of sites run by the controversial US and Israel-backed Gaza Humanitarian Foundation (GHF).
A further 183 people killed were “presumably on the route of aid convoys,” said Ravina Shamdasani, from the Office of the UN High Commissioner for Human Rights.
Its figures are based on a range of sources, including hospitals, cemeteries, and families in the Gaza Strip, as well as non-governmental organisations (NGOs), its partners on the ground, and Hamas-run health authorities.
Aid agency Project Hope said on Thursday that 10 children were among at least 15 people killed as they waited for its clinic in Deir al Balah to open.
Ten children were reportedly killed when Israel attacked near a clinic on Thursday. Pic: AP
The GHF has claimed the UN figures are “false and misleading” and has repeatedly denied any violence at or around its sites.
Meanwhile, Medecins Sans Frontieres (MSF) – also known as Doctors Without Borders – said two of its sites were seeing their worst-ever levels of severe malnutrition.
Cases at its Gaza City clinic are said to have tripled from 293 in May to 983 in early July.
“Over 700 pregnant or breastfeeding women and nearly 500 children are now receiving emergency nutritional care,” MSF said.
The humanitarian medical charity said food prices were at extreme levels, with sugar at $766 (£567) per kilo and flour $30 (£22) per kilo, and many families surviving on one meal of rice or lentils a day.
It’s a major concern for the estimated 55,000 pregnant women in Gaza, who risk miscarriage, stillbirth and malnourished infants because of the shortages.
The GHF began distributing food packages in Gaza at the end of May, after Israel eased its 11-week blockade of aid into the coastal territory.
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US aid contractors claim live ammo fired at Palestinians
It has four distribution centres, three of which are in the southern Gaza Strip.
The sites, kept off-limits to independent media, are guarded by private security contractors and located in zones where the Israeli military operates.
Palestinian witnesses say Israeli forces have repeatedly opened fire towards crowds of people going to receive aid.
The Israeli military says it has fired warning shots at people who have behaved in what it says is a suspicious manner.
It says its forces operate near the aid sites to stop supplies from falling into the hands of militants.
Read more:
GHF aid distribution linked to increased deaths
Gaza situation ‘apocalyptic’, says UN expert
After the deaths of hundreds of Palestinians trying to reach the aid hubs, the United Nations has called the GHF’s aid model “inherently unsafe” and a violation of humanitarian impartiality standards.
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In response, a GHF spokesperson said: “The fact is the most deadly attacks on aid sites have been linked to UN convoys.”
The GHF says it has delivered more than 70 million meals to Gazans in five weeks and claims other humanitarian groups had “nearly all of their aid looted” by Hamas or criminal gangs.
At least 798 people in Gaza have been killed while receiving aid in six weeks, the UN human rights office has said.
A spokesperson for the Office of the United Nations High Commissioner for Human Rights said 615 of the killings were “in the vicinity” of sites run by the controversial US and Israel-backed Gaza Humanitarian Foundation (GHF).
A further 183 people killed were “presumably on the route of aid convoys,” Ravina Shamdasani told reporters in Geneva.
The office said its figures are based on numbers from a range of sources, including hospitals, cemeteries and families in the Gaza Strip, as well as NGOs, its partners on the ground and the Hamas-run health authorities.
The GHF has claimed the figures are “false and misleading”. It has repeatedly denied there has been any violence at or around its sites.
The organisation began distributing food packages in Gaza at the end of May, after Israel eased its 11-week blockade of aid into the enclave.
It has four distribution centres, three of which are in the southern Gaza Strip. The sites, kept off-limits to independent media, are guarded by private security contractors and located in zones where the Israeli military operates.
Palestinian witnesses say Israeli forces have repeatedly opened fire towards crowds of people going to receive aid.
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US aid contractors claim live ammo fired at Palestinians
The Israeli military says it has fired warning shots at people who have behaved in what they say is a suspicious manner.
It says its forces operate near the aid sites to stop supplies falling into the hands of militants.
Read more:
GHF aid distribution linked to increased deaths
Gaza situation ‘apocalyptic’, says UN expert
After the deaths of hundreds of Palestinians trying to reach the aid hubs, the United Nations has called the GHF’s aid model “inherently unsafe” and a violation of humanitarian impartiality standards.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
In response, a GHF spokesperson told the Reuters news agency: “The fact is the most deadly attacks on aid sites have been linked to UN convoys.”
The GHF says it has delivered more than 70 million meals to Gazans in five weeks and claims other humanitarian groups had “nearly all of their aid looted” by Hamas or criminal gangs.
Ten children and two women are among at least 15 killed in an airstrike near a Gaza health clinic, according to an aid organisation.
Project Hope said it happened this morning near Altayara Junction, in Deir al Balah, as patients waited for the clinic to open.
The organisation’s president called it a “blatant violation of international humanitarian law, and a stark reminder that no one and no place is safe in Gaza“.
“No child waiting for food and medicine should face the risk of being bombed,” added the group’s project manager, Dr Mithqal Abutaha.
“It was a horrific scene. People had to come seeking health and support, instead they faced death.”
Operations at the clinic – which provides a range of health and maternity services – have been suspended.
Some of the children were reportedly waiting to receive nutritional supplements, necessary due to the dire shortage of food being allowed into Gaza.
Israel‘s military is investigating and said it was targeting a militant who took part in the 7 October terror attack.
“The IDF [Israel Defence Force] regrets any harm to uninvolved individuals and operates to minimize harm as much as possible,” added.
The deaths come as an agreement over a 60-day truce hangs in the balance – with President Trump cautiously saying it could happen “this week, or next week”.
Elsewhere in Gaza, the Nasser Hospital reported another 21 deaths in airstrikes in Khan Younis and in the nearby coastal area of Muwasi.
It said three children and their mother were among the dead.
Israel said its troops have been dismantling more than 130 Hamas infrastructure sites in Khan Younis over the past week, including missile launch sites, weapons storage facilities and a 500m tunnel.
On Wednesday, a soldier was shot dead when militants burst out of a tunnel and tried to abduct him, the military added.
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Eighteen soldiers have been killed in the past three weeks – one of the deadliest periods for the Israeli army in months.
A 22-year-old Israeli man was also killed on Thursday by two attackers in a supermarket in the Israeli-occupied West Bank, said the Magen David Adom emergency service.
People on site reportedly shot and killed the attackers but information on their identity has so far not been released.
Read more:
IDF chief says conditions ‘created’ for Gaza ceasefire
What is the possible Gaza hostage and ceasefire deal ?
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Lack of food and water ‘lethal’ for Gaza children
Negotiations over a proposed 60-day ceasefire are ongoing and President Trump reportedly put “heavy” pressure on Israel’s leader, who visited the US this week.
A major sticking point is said to be the status of the Israel Defence Forces (IDF) inside Gaza during the 60-day ceasefire and beyond, should it last longer.
However, Sky News understands the Israeli government thinks the chances of a permanent truce are “questionable”.
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More than 57,000 Palestinians have been killed in the war – more than half are women and children, according to Gaza’s Hamas-controlled health ministry.
Its figure does not differentiate between civilians and fighters.
The war began in October 2023 after Hamas killed around 1,200 people in Israel and kidnapped 251 others.
Some of them remain In Gaza and are a crucial part of ceasefire negotiations, which also include a planned surge in humanitarian aid into the strip.
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