Liz Truss and Kwasi Kwarteng are facing calls to reverse course yet further on their mini-budget, as MPs return to Parliament after a torrid conference season for the Government.
Parliament returns on Tuesday, after a remarkable recess punctuated by Tory infighting and market turmoil in the wake of the Chancellor’s financial plan.
As MPs flock back to Westminster, Labour is calling on Mr Kwarteng to come before the Commons, urging the Government to turn its back on the mini-budget.
With Treasury questions pencilled in on Tuesday afternoon in the Commons, it is likely that Mr Kwarteng could make an early appearance at the dispatch box to take questions from MPs about his fiscal plans.
Ms Truss has already been forced to abandon plans to scrap the 45p top rate of tax, while on Monday in another U-turn, Mr Kwarteng agreed to set out his medium-term fiscal plan alongside Office for Budget Responsibility (OBR) predictions on October 31, as opposed to the promised date of November 23.
Labour have forced this Tory government to U-turn throughout the cost-of-living crisis and we will do all we can in our power to do so again to get them to reverse this disastrous, kamikaze budget— Rachel Reeves, shadow chancellor
Labour has said it will use Parliament in a bid to pile pressure on the embattled Chancellor, while also calling on Tory MPs to make concerns about the Government’s financial plans public.
Shadow chancellor Rachel Reeves said: “This is a Tory crisis that has been made in Downing Street, and that is being paid for by working people.
“Families worried sick about bills haven’t even had so much as an apology from the Prime Minister or Chancellor, the architects of chaos unleashed on the British economy and family finances.
“Labour have forced this Tory government to U-turn throughout the cost-of-living crisis and we will do all we can in our power to do so again to get them to reverse this disastrous, kamikaze budget.”
Mr Kwarteng’s multibillion-pound package of tax cuts, to be paid for by borrowing, caused the pound to plummet and forced the Bank of England to step in to reassure the markets.
Concerns are also growing about the impact a sharp rise in interest rates could have on householders.
“We need stability for our economy now and a real plan for growth that only a Labour government will bring. It will be up to Labour to clean up the mess of the Conservatives once again,” Ms Reeves said.
It is set to be another crunch week in Westminster, as Ms Truss attempts to dispel doubts about the direction of her premiership and win over any would-be rebels.
She is facing mounting opposition within her own party over any money-saving plan that would see the Government decide not to increase benefits with inflation, a move that would amount to real-terms cuts to incomes for the most vulnerable.
Ms Truss will attempt a charm offensive this week as MPs return, with the Prime Minister expected to hold policy lunches with groups of colleagues and address the 1922 Committee of backbenchers on Wednesday.
Mel Stride, chairman of the Treasury Select Committee, warned that that Mr Kwarteng may have to go further if he is to reassure markets that remain jittery about his tax-cutting plans.
“The best option of all options is that what the Chancellor comes forward with on October 31 does add up, the markets do have confidence in it, and we start to start to see a softening of these rising interest rates, the pressure on borrowing costs, mortgages and so on,” he told BBC Newsnight.
“And it is possible to do that, but it may require a huge amount of political courage on his part, possibly even to row back further on the tax cuts that have come forward.”
