Liz Truss came under growing pressure on Wednesday from a senior Tory MP to climb down further on her tax-cutting plans after ruling out public spending cuts.
Treasury Select Committee chairman Mel Stride warned that Chancellor Kwasi Kwarteng would only get one chance - in a fiscal statement on October 31 - to sort out the economic mayhem caused by his mini-budget. Liz Truss insisted at PMQs public spending will not be cut as market turmoil following the mini-budget continues.
Mr Stride tweeted: “Given the clear government position expressed today on protecting public spending there is an emerging question. Whether any plan that does not now include at least some element of further row back on the tax package can actually satisfy the markets.
“Credibility might now be swinging towards evidence of a clear change in tack rather than just coming up with other measures that try to square the fiscal circle. The Chancellor will only get one opportunity to land his plans and the forecast positively.
“He must take no chances. There is too much at stake for all of us.”
The Prime Minister was facing PMQs for the first time since Chancellor Kwasi Kwarteng’s £43 billion mini-Budget tax giveaway unleashed chaos in the financial markets.
Sir Keir Starmer asked Ms Truss if she will stick to a pledge made during the Tory leadership contest that she would not reduce public spending.
He asked: “During her leadership contest, the Prime Minister said ‘I’m very clear, I’m not planning public spending reductions’. Is she going to stick to that?”
Ms Truss said: “Absolutely. We are spending almost a trillion pounds on public spending. We were spending £700 billion back in 2010. What we will make sure is that over the medium term the debt is falling. But we will do that not by cutting public spending but by making sure we spend public money well.”
Sir Keir repeatedly asked the prime minister, “Who voted for this?”.
On Tuesday, senior Tories warned the Government’s economic credibility would be further shredded if the Chancellor tries to push through the disputed mini-Budget policies without the support of Conservative MPs.
It comes as the pound has fallen again, after the governor of the Bank of England warned its emergency support package for the financial markets will end on Friday.
