No 10 warns of ‘difficult decisions’ on public spending despite Truss’s vow to avoid cuts – UK politics live | Politics

During the UQ Mel Stride, the Conservative MP who chairs the Commons Treasury committee, told Chris Philp that he thought the government would have to abandon more of the tax cuts in the mini-budget. The abolition of the 45% top rate of tax has already been shelved. But Stride told Philp:

The chancellor was quite right to have brought forward the date for the medium-term plan and OBR forecast.

He has, of course, a huge challenge now landing those plans to reassure the markets. He has to get the fiscal rules right, he has to come forward with spending restraint and revenue raisers that are politically deliverable.

Given the huge challenges, there are many – myself included – who believe it is quite possible that he will simply have to come forward with a further rowing back on the tax announcements that he made on 23 September.

Stride asked Philp to confirm that further U-turns of this kind were “still on the table”.

But Philp replied: “There are not any plans to reverse any of the tax measures announced in the growth plan.”

And here is more from the post-PMQs No 10 briefing.

• Downing Street said that there would still have to be “difficult decisions” about public spending despite Liz Truss saying she was committed to avoiding spending cuts. The PM’s spokesperson said:

The prime minister was clear that government spending will continue to rise but beyond that it really is for the chancellor to come forward with anything on spending which he will do on the 31 [October].

Asked if the energy support scheme could be used as cover for departmental cuts, the spokesperson said:

We are clear there will need to be difficult decisions to be taken given some of the global challenges we’re facing. I appreciate the interest but I’m not going to get drawn into what those might look like.

• The spokesperson denied a report in the Independent saying the measures in the mini-budget were being reviewed, with a view to being changed or abandoned. Asked if the report was right, the spokesperson replied: “No. We’re working closely with the Treasury but I don’t recognise that report.”

• The spokesperson said the government was still committed to the mini-budget measures, in particular cutting the basic rate of income tax to 19p in the pound and not increasing corporation, and implementing them on the timescale proposed in the announcement.

Here is the PA Media story on PMQs.

Voters will not forgive the Conservative party if it continues to “defend” the madness of Liz Truss’s “kamikaze” mini-budget, according to Keir Starmer.

The Labour leader issued the warning to Tory MPs as he accused the prime minister of being “lost in denial” and “ducking responsibility” for the consequences of her government’s economic policies.

Truss said the UK will see “higher growth and lower inflation” as a result of her plan and insisted she will stick to her pledge not to reduce public spending.

She also said Starmer had undergone a “Damascene conversion” to support legislation to repeal a hike in national insurance, although Labour – under his leadership – opposed the increase in the first place.

Starmer in his concluding remarks at prime minister’s questions, asked: “Who voted for this? Not homeowners paying an extra £500 on their mortgages. Who voted for this? Not working people paying for tax cuts to the largest companies. Who voted for this? Not even most of the MPs behind her who know you can’t pay for tax cuts on the never-never. Does she think the public will ever forgive the Conservative party if they keep on defending this madness and go ahead with her kamikaze budget?

Truss replied: “What our budget has delivered is security for families for the next two winters. It’s made sure that we’re going to see higher economic growth, lower inflation and more opportunities. The way we will get our country growing is through more jobs, more growth, more opportunities – not through higher taxes, higher spending and his friends in the unions stopping hard-working people getting to work.”

Tory MPs will not have found that performance by Liz Truss reassuring. In politics, as in life, to solve a problem you have to at first face up to what it is, and Truss is still for the most part arguing that the problem with interest rates in the UK is primarily or overwhelmingly a global one (it isn’t – see 11.48am) and that the mini-budget was not culpable because primarily it comprised an energy saving package (it did – but it was not that element of the package that alarmed the markets). All politicians use talking points to defend their position, but they only tend to work if they are at least 50% plausible. Truss did not sound quite as detached from reality as Jacob Rees-Mogg did this morning – she refused to endorse what he said – but mostly she was relying on denial, and it is hard to see that persuading anyone.

This meant Starmer had an easy target, and he clobbered her policy position quite effectively. Truss’s attempts to retaliate were relatively feeble. Starmer ridiculed the suggestion that he had had a Damascene conversion on the health and social care levy (which Labour voted against last year, when the Tories were in favour) and he rightly pointed out that he called for an energy price freeze before she did. Most voters can understand why an opposition party might propose a spending commitment for just six months, not two years, and Sajid Javid’s comments this morning (see 11.24am) suggest there may be a lot of Tories who believe Starmer’s version of this policy is more responsible than Truss’s.

The most intriguing line in the Truss/Starmer exchanges came when he asked her if she was still opposed to public spending cuts. For the record, here is the exchange:

Starmer asked:

During her leadership contest the prime minister said, I quote her exactly, ‘I’m very clear, I’m not planning public spending reductions.’ Is she going to stick to that?

And Truss replied:

Absolutely. Look, Mr Speaker, we’re spending almost £1tn on public spending. We were spending £700bn back in 2010. What we will make sure is that over the medium term the debt is falling. We will do that, not by cutting public spending, but by making sure we spend public money well.

Since the Institute for Fiscal Studies said in a report earlier this week that Truss would only be able to keep her tax cuts and have a credible deficit reduction plans if she announced spending cuts with £60bn, at first glance her “no cuts” message sounded like the first shift towards a U-turn.

But that is almost certainly a misreading. The IFS said cuts worth £60bn would be needed by 2026-27. Promising not to cut public spending (the Truss pledge) is not the same as promising to increase it in line with inflation. During the summer, when she made the original comment, Truss may have been anticipating a real-terms cut, if not an actual cut, and the IFS said not keeping up with inflation would feel like a cut. “Keeping to the existing cash spending plans is essentially imposing a rather hidden form of austerity on departments,” it said in its report. And, in the last few minutes, at a lobby briefing, No 10 suggested there might be cuts in specific areas anyway. This is from Adam Bienkov from Byline Times.

The pressure for a U-turn on the mini-budget is still intense. But on the basis of PMQs today, Truss is still in “plough on regardless” mode. It is hard to see it ending well.