Liz Truss had her first lengthy grilling since the mini-budget from Laura Kuenssberg on Sunday, after critics called a series of mini-interviews with BBC local radio and regional TV presenters earlier in the week a “car crash”.
In a 20-minute interview on Sunday morning with the BBC’s Kuenssberg, the prime minister appeared at ease despite the mounting Tory rebellion over her chancellor’s mini-budget, which sent the markets into a spiral.
These are the key points from her interview at the opening of the Conservative conference in Birmingham:
A defence of tax cuts, but a sliver of remorse about the handling of the announcement
Truss was in full bullish mode, saying she would “stand by” the mini-budget announced on 23 September, which handed bigger tax cuts to the mega-wealthy.
She did not seem fazed by the backlash from within her own party, saying there had been “too much focus in politics about the optics or how things look – as opposed to the impact they have on our economy”.
Reiterating that at least 50% of the spending related to helping people with spiralling energy bills, Truss said the government was “not living in a perfect world” and sought to remind people that without action, “we would be in serious trouble”.
Her only note of regret was about the handling of the announcement itself. She seemed to suggest more should have been done to reassure the markets in advance of Kwasi Kwarteng’s statement, saying: “I do accept we should have laid the ground better, I do accept that and I have learnt from that and I will make sure that in future we do a better job of laying the ground.”
A refusal to rule out public service spending cuts
During the leadership contest, Truss said she was “not planning public spending reductions”. However, she failed to use such definitive language in the interview with Kuenssberg.
After government departments were told to find “efficiency savings”, fears of a return to the austerity years have grown among Tory backbenchers.
Truss twice refused to rule out public spending cuts, though when it was put to her that suggested they were likely to happen, Truss snapped back “no it doesn’t” and told people to wait for the medium-term growth announcement by Kwarteng at the end of November.
Kwarteng blamed for axing of 45p tax rate
One of Tory MPs’ central criticisms has been about the abolition of the additional rate of tax on earnings above £150,000 – proof, they say, that the mini-budget was about helping the better off.
Truss said the controversial measure was not discussed with the cabinet in advance but was a decision made by the chancellor.
Door left open to real-terms benefit cuts
Another move Truss declined to rule out was raising benefits below inflation – meaning a real-terms pay cut for those on low wages forced to top up their salaries with universal credit.
Despite Boris Johnson promising to raise benefit payments in line with inflation, the new PM said: “This is something the Department for Work and Pensions secretary is looking at at the moment. She will make a determination on that and we will announce that this autumn.”
Refusal to publish economic forecasts from OBR before 23 November
The government has been forced into committing to publish economic forecasts from the Office for Budget Responsibility off the back of market uncertainty about the impact of the mini-budget measures. Some have suggested the forecasts should be published sooner.
Mel Stride, a Tory MP and chair of the Treasury select committee, has demanded them this month. But Truss said they would be held back until Kwarteng made his medium-term growth announcement.
She added there was “no point in publishing something that’s not ready”.
Easy about chancellor’s drinks with hedge fund managers after mini-budget
After the Sunday Times reported that Kwarteng attended a champagne reception at the home of a Conservative donor hours after delivering his mini-budget, Truss seemed relaxed.
“He meets business people all the time,” she said, adding: “I don’t manage his diary.”
