Liz Truss was standing by Chancellor Kwasi Kwarteng on Wednesday as a Treasury minister rejected calls for the government to abandon last week’s mini-Budget, despite a growing Tory revolt and turmoil in financial markets.
A Downing Street spokesman said the Prime Minister and Chancellor “are working on the supply side reforms needed to grow the economy which will be announced in the coming weeks”.
The backing for the Chancellor came as Andrew Griffiths, Financial Secretary to the Treasury, said the Government would plough ahead with its controversial growth plans, saying “we think they are...right”.
A growing number of Tory MPs have slammed tax cuts and tens of billions of pounds of extra borrowing which has sent the pound plunging.
Simon Hoare MP tweeted: “In the words of Norman Lamont on Black Wednesday: “today has been a very difficult day”.
Mr Hoare, chairman of the Commons Northern Ireland committee, added: “These are not circumstances beyond the control of Govt/Treasury . They were authored there. This inept madness cannot go on”. Another Tory MP, Robert Largan, voiced “serious reservations” about some of the Chancellor’s announcements.
“I do not believe that cutting the 45p Top Tax Rate is the right decision when the Government’s fiscal room for manoeuvre is so limited. In my view, this is a mistake,” he tweeted.
Former Chief Whip Julian Smith is among other Tory MPs who have spoken out against the cut in the 45p top rate of tax, a move which he described as “wrong”.
Many Conservative MPs are privately aghast at some of Mr Kwarteng’s plans which have send the pound falling sharply.
Amid turmoil in the markets, the Bank of England made an emergency intervention to protect Britain’s “financial stability” after the mini-Budget.
The bank said it would buy back billions of pounds of Government debt to try to drive down the interest rate on public borrowing which has soared since the fiscal statement on Friday.
It stressed that it was also seeking to protect households and businesses from the crisis, who also face spiralling mortgage and other borrowing costs.
The dramatic move came at 11am, as the Pound continued to fall and as top bankers had been meeting the Chancellor as he sought to defuse the economic crisis which he has sparked.
