• Wed. May 22nd, 2024

Liz Truss justifies the chancellor’s risky moves amid likely crisis

The Labour leader, Sir Keir Starmer, has called for the recall of parliament to address the financial crisis. He urged the government to abandon the mini-budget measures which triggered the market turmoil.

screenshot Guardian

Liz Truss is a “danger” to the economy and has “lost control” following the fall-out from the government’s mini-budget, according to Sir Keir Starmer.

The Labour leader stopped short of calling for the PM and her Chancellor Kwasi Kwarteng to resign, saying it was a “secondary” issue. He told Sky News the decisions being taken in Downing Street meant there was “a danger” and the pair “took a huge risk” with their plans, adding: “They’re gambling our money… to give tax breaks to the very rich.”

The Guardian has learned that departments will be asked to look for “efficiency savings” and told they must live within the budget constraints of the current spending review.

The chief secretary to the Treasury Chris Philp will write to departments within the next 48 hours setting out the request, a Whitehall source said.

Treasury minister Andrew Griffith has defended the government’s plans, which have largely been blamed for the seismic financial shock to markets.

Griffith, the financial secretary to the Treasury, told Sky News: “We think they are the right plans because those plans make our economy competitive.”

No 10 said Liz Truss is standing by Kwasi Kwarteng despite pressure on him to quit. A spokesman said: “The PM and the Chancellor are working on the supply side reforms needed to grow the economy which will be announced in the coming weeks”.

The Treasury has published a read-out of a meeting between the chancellor, Kwasi Kwarteng, and a host of representatives from somw of the biggest banks in the world. According to the statement, Kwarteng “underlined the government’s clear commitment to fiscal discipline” at a meeting aimed at reassuring the City amid market turmoil following Friday’s so-called mini-budget.

At the Labour conference Angela Rayner, the deputy leader, said although she is proud of Labour’s traditions, “there is one part of our history that I will never celebrate – losing elections”. And she says that, although Labour likes to talk about what more it should do, it should celebrate its successes more.

The Guardian