Liz Truss has insisted “decisive action” by the government over its economic policies will help the UK going forward.
Speaking to reporters, the prime minister said: “We have to look at what situation this country would be in if we hadn’t acted – people were facing fuel bills of up to £6,000, we had very high inflation expectations and an economic slow down.
“And what we have done is taken decisive action.”
The PM focused on the government’s plan to tackle rising energy costs announced at the start of her premiership – namely a price guarantee that the average household’s monthly bill won’t pass £2,500 for two years, though those who use more energy will pay more, and six months of equivalent support for businesses.
“It is a difficult time,” she said. “We are facing a global economic crisis brought about by Putin’s war in Ukraine, and what was right was that Britain took decisive action to help people get through what is going to be a difficult winter.”
But it was the raft of tax-cutting policies announced by her Chancellor Kwasi Kwarteng on Friday – including scrapping the top rate of tax and reversing the rise in National Insurance, all to be paid for through borrowing – that got markets spooked.
After the so-called mini-budget, the pound dropped, the IMF condemned the plans, and the Bank of England was forced to intervene to stop some pensions from collapsing.
Opposition leaders have demanded the Conservatives cancel their upcoming conference, which starts in Birmingham on Saturday, to recall parliament and to scrap its proposals.
Yet Ms Truss is ploughing ahead, despite criticism over the economic policies from her own benches, telling reporters: “We need to continue to make sure we deliver the economic growth, that we deliver the jobs and opportunities and that is the long term future that we have set out.”
The PM’s first outing in front of the press following Friday’s so-called “fiscal event” was on local BBC radio stations this morning, where she insisted the government had “done the right thing” on the economy.
She said she was prepared to take “controversial and difficult decisions” because “what is important to me is we get our economy moving, we make sure that people are able to get through this winter and we are prepared to do what it takes to make that happen”.
But shadow chancellor Rachel Reeves said her answers had “made this disastrous situation even worse”, adding: “It is disgraceful that the family finances of people across the country are being put on the line simply so the government can give huge unfunded tax cuts to the richest companies and those earning hundreds of thousands of pounds a year.
“This is a serious situation made in Downing Street and is the direct result of the Conservative government’s reckless actions.”
‘Plenty of areas’ for efficiency
During the later interview with reporters, the PM was also unable to suggest what efficiency savings government departments could make, despite reports that a letter will be sent to ministers today to ask for cost saving plans.
“There are always ways we can organise things more efficiently,” she told reporters.
“What I want to make sure is tax payer money is focused on frontline services, on getting our GP appointments, making sure people can get to see a doctor, making sure we deliver on our road projects – all of those things that people rely on us for.
“But there are plenty of areas where the government can become more efficient.”
Asked if she could give an example, she replied: “Not at the moment. We are continually reviewing to make sure we are getting good value for money and I think that is what taxpayers expect.”