Truss: I failed to prepare ground for mini-Budget

LIZ truss yesterday admitted that mistakes were made in the Government’s market- spooking miniBudget – but insisted she will not change course.

After the fiscal statement sent the pound plummeting, the Prime Minister conceded ministers could have done more to prepare the ground for the sweeping tax cuts.

But she stood by the package and its timing, despite the ensuing market turbulence and opinion poll fall for the tories.

‘I do want to say to people I understand their worries about what has happened this week,’ she told the BBC’s Sunday With Laura Kuenssberg yesterday.

‘I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act.

‘But I do accept we should have laid the ground better... I have learnt from that and I will make sure that in future we do a better job of laying the ground.’

Miss truss has come under fire from economists and Conservative MPs over the package – with particular anger at the decision to abolish the top 45p rate of income tax.

Furious backbenchers have accused the Government of failing to ‘roll the pitch’ ahead of the tax-cutting announcements, leaving the public feeling ‘frightened instead of reassured’.

Even allies who want her to stick to her guns have demanded that the Government improve the way it communicates economic policy to voters.

One said: ‘ She has got to play the next few weeks a lot cleverer, and No 10 has got to be a lot cleverer and a lot more inclusive than they have been in the first few weeks. this is a problem of their own making.’

the Sunday-morning interview, which followed a series of gruelling appearances on local BBC radio stations last week, came as the Conservative Party conference began in Birmingham.

After a tumultuous week, the Prime Minister addressed the issues that have left a cloud of controversy hanging over her early days in office:

BENEFITS

Miss truss said she would ensure the state pension rises in line with inflation – but refused to make the same commitment for benefits.

the Prime Minister confirmed that ministers are reviewing a commitment made by Boris Johnson to increase benefits in line with inflation next year – meaning claimants could see a real- terms cut to their payments.

She said: ‘ this is something the Department for Work and Pensions Secretary is looking at at the moment. So she [Chloe Smith] will make a determination on that and we will announce that this autumn.’

But Miss truss was clear that state pensions would rise in line with inflation, saying: ‘I’ve committed to the triple lock. Yes.’

the triple lock guarantees that the state pension will increase in line with inflation, earnings or 2.5 per cent – whichever is higher.

INTEREST RATES

Miss truss tried to deflect blame for soaring mortgage bills, saying interest rates were a matter for the Bank of England.

Miss Kuenssberg suggested that the massive government package to help with sky-high energy bills was being wiped out by soaring mortgage rates after the mini-Budget.

But the PM replied: ‘the interest rates are a key factor in mortgage rates and those are set by the Bank of England and they are somewhat dependent on the global market.

‘So Laura, we are not dealing with the issues we’re dealing with in isolation, we’re dealing with these issues in a world where there’s a slowing global economy, where there are rising interest rates, where there is huge inflation, mainly driven by energy caused by Vladimir Putin’s war.

‘And I as Prime Minister, and the Chancellor, have to deal with that in the way that we think will help people in Britain most get through these very, very difficult short-term circumstances, but put our country on the best longterm footing.’

AUSTERITY

the Prime Minister refused to rule out real-terms cuts to government departmental spending.

Miss truss said she believes in ‘outcomes rather than inputs’. She explained: ‘I’m not going to write, you know, future budgets on your show, much as you’d like me to do, but the core principle I believe in is maximising growth in the economy.

‘that’s why we’re pulling all the levers on everything from making our tax system simpler and lower, to also getting projects done quicker, you know, driving reform in our economy as well as we make our public sector more efficient.

‘But I’m absolutely committed to delivering great public services for people – that is very, very important.’

She added: ‘I believe in outcomes rather than inputs. I believe in what people see and what people feel.

‘So for example, the Health Secretary has committed that people will be able to see their GP within two weeks. And that’s what we’re focused on.

‘We’re focused on how does it feel for a patient, you know, how does it feel for me as a woman walking down the street, do I feel safe at night?

‘ those are the things I’m thinking about as Prime Minister. And that’s what we’re focused on, delivering better public services.’

BLAMES KWARTENG

Miss truss blamed Kwasi Kwarteng for the controversial decision to abolish the top 45p rate of income tax for the highest earners – and revealed she did not discuss the measure with the wider Cabinet.

‘No, no, we didn’t. It was a decision the Chancellor made,’ she told Miss Kuenssberg.

Former culture secretary Nadine Dorries accused Miss truss of failing to be loyal by ‘throwing your Chancellor under a bus on the first day of conference’.

But a source close to the Chancellor, who will speak to the Birmingham conference hall today, said: ‘the higher the tax, the more ways people seek to avoid them, work elsewhere, or simply work less.

‘As the PM said this morning, the 45p rate raises very little and makes our tax system more complicated. While the Chancellor obviously makes all tax decisions, the Prime Minister and Kwasi are in lockstep on this.’