LIZ Truss has come out fighting against critics of her tax-slashing Mini Budget today, insisting action HAD to be taken to boost economic growth.
The PM told BBC local radio stations this morning that she needed to make “controversial and difficult decisions” on Britain’s finances to get the country through a tough winter.
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And she insisted imposing massive tax cuts “is the right plan” for the country.
The defiant PM said: “I think we have to look at the situation we would be facing if the government hadn’t acted.
“We’ve taken action by stepping in and making sure no one is paying fuel bills more than £2,500.“
Yesterday, pension funds holding £1trillion of British savings were narrowly saved from disaster days after the mini-Budget was announced.
Fears around the health of the economy had caused the biggest sell-off of long-term government debt to the Bank of England since the 1990s recession.
The chaos below the surface of the economy was similar to that seen with Northern Rock in the early days of the 2007/8 financial crisis.
The PM blamed turbulence in the economy on Mad Vlad Putin’s war in Ukraine.
She said that Britain should never have got to a position where it became reliant on authoritarian tyrants for energy.
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That, she insisted, is the partly why the government had to make such a major intervention.
“It is unconscionable that we allowed this to happen and allowed people to face that fear that they won’t be able to pay their bills,” Ms Truss said.
The PM blasted the idea that the government should make any u-turns on last Friday’s mini budget announcements.
Among the most controversial measures were slashing the 45p top tax rate and binning the cap on bankers’ bonuses.
Yesterday a number of Tory MPs blasted the the 45p cut, which benefits the richest Brits and will be paid for through borrowing.
But others stood by their party leader and said people need be patient and wait for the huge benefits of it to kick in.
The PM told the BBC: “Having lower taxes across the board helps everyone. For too long the debate in this country has been about distribution.
“If we don’t grow our economy there won’t be greater investment and better jobs.
“It’s important we keep business tax low to encourage businesses to come to this country.”
Asked if her budget is fair, the PM replied: “It’s not fair to have a recession… it’s not fair to have less jobs in future because we have the highest tax burden.”
Bank of England steps in
Yesterday the Bank of England took unprecedented action to prevent a run on pension funds which could have triggered mass insolvencies.
Ministers denied Kwasi Kwarteng‘s Mini Budget was directly to blame, and vowed to press ahead with £45billion of tax cuts promised.
The Bank of England was forced into emergency action to stop a Northern Rock-style run of pension funds.
Commenting on the dramatic intervention, Ms Truss said: “We’re working very closely with the Bank of England.
“The government has done the right thing by dealing with inflation … of course these are difficult decisions.
“We are facing difficult economic times but what’s right is the UK government has stepped in.”
The Bank spent £1billion in a bid to calm nerves.
It also said it is prepared to buy up £65billion of long-term government debt — known as gilts — at “an urgent pace” to help restore “orderly market conditions”.
It is the first time the Bank has had to do so purely because markets were being so dysfunctional.
Mortgage panic continued with lenders pulling 1,000 deals in 24 hours amid fears interest rates could reach six per cent.
When asked about the issue of possible mortgage rate hikes because of massive borrowing, the PM found herself lost for words.
After a long pause she eventually said: “I don’t think anybody is asking that we shouldn’t have acted on energy.”
And the FTSE 100 Index has been hit by volatility amid the selling off of bonds and wider global recession fears.
It fell by nearly 2 per cent in early trading on Thursday after a rollercoaster ride on Wednesday.
This morning, when asked by the BBC the PM could not confirm whether Brits’ pensions are safe.
She simply said: “The Bank of England do that and they do a very good job of it”
Nonetheless, Treasury Secretary Chris Philp denied the UK is experiencing an economic crisis.
He told LBC: “The Bank of England intervened in a targeted way yesterday… that intervention appears to have been successful.
“What is ultimately important is that we get this economy growing, we get people’s wages going up, that is what the growth plan will do.”
Labour and the Liberal Democrats have demanded the reversal of the abolition of the 45p top rate of tax — which is being funded by Government debt and is blamed for spooking the markets.
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