In the midst of economic uncertainty following the mini-budget unveiled by new Chancellor Kwasi Kwarteng, the Manchester Evening News asked every Tory MP for their views on tackling the crisis. Not one replied.
Greater Manchester has eight Conservative MPs, representing residents in Stockport, Bolton, Bury, Trafford, Leigh and parts of Rochdale. The M.E.N. approached each one for comment on Wednesday afternoon (September 28).
The mini-budget, unveiled by Mr Kwarteng on September 23 included a series of tax cuts - the most notable of which featured an end to a cap on bankers' bonuses. Since then the value of the pound plummeted and cause widespread market turmoil.
Despite this, Prime Minister Liz Truss has reaffirmed that she is committed to her economic plans. Ms Truss, just 23 days into the top job, appeared on numerous local BBC Radio stations this morning (September 29). They included slots for listeners in Lancashire and Stoke-On-Trent.
Speaking to John Acres on the Staffordshire station, he asked the PM if she had ‘taken the keys to the country and crashed the economy?’
“What I have done is I have taken decisive action to deal with a very, very difficult economic situation that we’re facing, and the world’s facing,” Ms Truss said. “When I came into Downing Street, a few weeks ago, people were facing energy bills of up to £6,000 this winter. We were facing very high inflation. We were facing an economic slowdown.”
One of the main issues in Lancashire is fracking, which the new government has just allowed to go ahead — where there is local support. Pressed on the issue of what ‘local consent’ looks like, Ms Truss said: “The energy secretary will be laying out more detail exactly what that looks like, but it does mean there’s local support before going ahead.”
Further to that, interviewers quizzed the PM on why she could not rule out a return to fracking in the county — which is something not supported by Tory MPs in the region. Her reply was: “I don’t accept the premise of your question, because what I’ve said if there is local consent we will go ahead, we need to explore where there is local consent and where there isn’t — and we are still doing that work.”
Pension funds 'would have collapsed today' if emergency measures had not been taken by the Bank of England, it was claimed yesterday. The Bank of England was forced to step in with a £60bn buy-up of government debt to stop a mass collapse of pension funds.
The move to calm the chaos in financial markets followed turmoil for the pound and UK government bonds caused by the Chancellor’s tax-cutting mini-budget. The Bank announced it was stepping in to buy government bonds – known as gilts – at an 'urgent pace' to try and bring the surging yields under control as they spiralled higher, sending UK public borrowing costs soaring.
It said it would buy bonds 'on whatever scale is necessary', but has so far resisted calls to deliver an emergency interest rate rise after the pound fell to an all-time record low against the US dollar on Monday.
The Bank announced the plans to launch the temporary programme to buy gilts, effectively stepping in to provide a backstop in the market and halt a sell-off. It made the move after the yield – or interest rate – charged on long-dated gilts soared to levels not seen for many years.
The Bank said the rise threatened to see financial conditions tighten in the UK, cutting the flow of credit to households and businesses, if not addressed. It is also understood that the Bank’s action follows concerns over the balance sheet strength of many UK pension funds caused by the gilt sell-off, sparking fears over their solvency.
Concerns over Britain’s economic policies have sparked a gilt rout, sending the yield on 10-year gilts to over 4 per cent – a level not seen since the 2008 financial crisis. Government bond yields are under pressure worldwide amid fears over a global recession caused by the energy crisis.
The Bank said in a statement: "This repricing has become more significant in the past day – and it is particularly affecting long-dated UK government debt. Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability.
"This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy."
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