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Liz Truss admits she should have ‘laid ground better’ before mini-budget and says cabinet not consulted about 45% top rate tax cut – live

Truss accepts presentation of mini-budget was flawed, saying government should have ‘laid the ground better’

Liz Truss says interest rates are going up around the world.

She understands people’s worries about that. And she says she would have prepared people for what would be in the mini-budget more effectively.

I do accept we should have laid the ground better. I have learnt from that. I will make sure in future we do a better job of laying the ground.

Key events

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From the Labour MP Chris Bryant

I take from Michael Gove’s comments this morning that a burning sense of fury is raging under the surface of the Conservative Party – along with a quiet determination to prevent Truss from getting her budget through.

— Chris Bryant (@RhonddaBryant) October 2, 2022

Liz Truss’s interview with Laura Kuenssberg – snap verdict

When politicians make mistakes, their natural inclination is to refuse to admit it, but the smart PR advice is almost always to offer some sort of apology, or admission of error. This is useful mainly because it is what voters want to hear. But it can also draw a line under the controversy, it stops the media banging on about ‘When are you going to admit that you made a mistake?’, and it allows you to move on.

Liz Truss arrived for her interview this morning with a play of this kind up her sleeve. It was not an apology, but it was an admission of error. Talking about the disastrous impact the mini-budget had on the financial markets, she said:

I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act.

But I do accept we should have laid the ground better … I have learnt from that and I will make sure that in future we do a better job of laying the ground.

This went further than what she has said before about the mini-budget. But it was about the feeblest form of “admission of error” conceivable, for three reasons. First, she was using a term that does not mean much to many people anyway (‘“laid the ground better” – what David Cameron used to call “pitch-rolling”). Second, later in the interview she came close to contradicting herself, implying that it did not really matter what people thought anyway. She said:

What I care about is making our country successful, making our economy successful. And I do think that there has been too much focus in politics about the optics or how things look, as opposed to the impact they have on our economy.

But the third and most important point of all is that Truss was not making any concessions on substance. At no point did she accept that any of the decisions in her mini-budget were wrong. She implied it was just a matter of presentation.

The problem with this is that, as Michael Gove rather brutally pointed out immediately afterwards, that Tory MPs think otherwise. We cannot know for sure, but it seems likely that Gove was talking for a majority of Conservative MPs – perhaps even the vast majority? – when he said that abolishing the top rate of income tax now was indefensible.

And that is why this was an interview that does not really help, and that still leaves her struggling at this conference to persuade her party that she is not finished for good. (See 8.29am.) This interview was not a car crash in the way the local radio interview round was on Thursday. But equally it was not one that will help her much, if at all.

Gove calls for publication of fiscal plan to be brought forward, saying ‘course correction’ essential

Gove says he is sure Liz Truss will be PM this time next year.

But there does need to be a “course correction”, he says. He says “reality bites”.

He says the medium-term fiscal plan, scheduled for late November, will have to be brought forward.

Q: You are being quite critical this week. Are you trying to be helpful?

Yes, he says.

Laura Kuenssberg also asks Michael Gove what he thought of her admission that the cabinet was not consulted on the abolition of the 45% top rate of tax.

Gove says it is normal for a budget decision like that to be taken by the PM and the chancellor, and not by the cabinet as a whole.

Gove hints he would refuse to vote for mini-budget, saying cutting top rate of tax ‘display of wrong values’

Michael Gove, the former levelling up secretary, is still in the studio. Laura Kuenssberg asks him for his reaction. And it is brutal.

He starts by saying he was glad to hear Truss acknowledge that the events of the mini-budget need to be revisited. (She did not quite say that.)

But he says there is an “inadequate realisation” at the top of government of the scale of the problem.

There is an inadequate realisation at the top of government of the scale of change required.

He says 35% of the borrowing in the mini-budget was for unfunded tax cuts.

That is not conservative, he says.

And it is wrong to cut the top rate of income tax when people are suffering. He says cutting tax for the wealthiest “is a display of the wrong values”.

Ultimately, at a time when people are suffering … when you have additional billions of pounds in play, to have as your principal decision cutting taxes for the wealthiest, that is a display of wrong values.

Q: It sounds like you won’t be able to vote for this?

Gove says he does not believe the move is right.

Q: How many people voted for your plan?

Truss says in 2019 people voted for a successful country.

She says any government has to deal with changing circumstances.

Q: Do you fear you have put the country on a path it did not ask for?

Truss says in 2019 people voted for “a different future”. They voted for investment and higher wages and more growth. That is what her plan will deliver. She is confident about that, she says. She says she is not saying it won’t be difficult. We face “a turbulent and stormy time”, she says.

That is the end of the interview.

Truss sidesteps questions about interest rates rising, saying they are matter for Bank of England

Q: What is the logic of helping people with their energy bills if their mortgage costs go up more?

Truss says interest rates are set by the Bank of England.

Q: But do you accept some people will be worse off?

Truss says the government is helping homeowners, with things like the stamp duty cut. She says interest rates are set by the Bank of England. They are dependent on the global situation.

Interest rates are rising around the world, she suggests.

Q: Why did you not publish an OBR forecast?

Truss says they did not have time to consider all the measures.

Q: But the OBR has said it could have published a forecast.

Truss says it would not have had time to consider all the plans.

Truss dismisses objections to top rate of tax being axed, saying there has been ‘too much focus’ in politics on ‘how things look’

Q: How do you think people will feel about the top rate of tax being cut while spending for poorer people?

Truss says she thinks there has been “too much focus” in politics on “how things look”, and not on whether decisions are right.

It is important to reverse two decades of low growth, she says.

Q: How do you think it looks for Kwasi Kwarteng to be having drinks on the day of the mini-budget with hedge fund managers?

Truss says Kwarteng meets business people the whole time. She does not manage his diary.

Cabinet as whole was not consulted about decision to cut 45% top rate of tax, Truss says

Q: Are you absolutely committed to getting rid of the 45% rate of tax?

Yes, says Truss.

She says it raises very little, and complicates the tax system.

Q: Did you discuss scrapping this with the whole cabinet?

No, Truss says. It was a decision the chancellor made.

Q: How would you have felt if you had been in Boris Johnson’s cabinet and he had not consulted you about that?

Truss says during the leadership contest she said she would simplify the tax system. She says budgets are never drawn up in consultation with the whole cabinet.

(The official government line is that this was not a budget.)

Truss refuses to commit to raising benefits in line with inflation

Q: Will you keep the promise to raise benefits in line with inflation?

Truss says Chloe Smith, the work and pensions secretary, is looking at this.

She says the poorest households are getting support from the energy package.

Q: Will pensions go up with inflation?

Truss says she has committed to the triple lock (which means pensions will go up at least in line with inflation).

Truss refuses to commit to increasing departmental budgets in line with inflation

Q: Will you increase departmental budgets in line with inflation?

Truss says she will not write future budgets on this show.

But her core aim is to maximise growth in the economy.

She is committed to “delivering great public services for people”.

Q: That is not the same as saying you will increase budgets in line with inflation.

Truss says she is more focused on outputs than inputs.

Truss refuses to deny that she will cut public spending

Q: Are you going to cut public spending?

Truss says the UK needs to “grow the size of the pie”. Low growth means less money for public services.

Q: Are you going to cut public spending? Simon Clarke, the levelling up secretary, implied this week the state was too large.

Truss says she believes in getting “value for money for the taxpayer”.

There will be a long-term plan for reform, she says.

Q: Are you going to cut spending on public services?

Truss says she will make sure there is value for money for the taxpayers. But she also wants to ensure the country has excellent public services, she says.

Q: Are you going to cut public spending on public services. The fact that you won’t answer directly implies you will.

No it doesn’t, Truss claims. She says she is not in a position to answer now.

Reducing debt as a proportion of GDP depends on how fast the pie is growing, she says.

Q: The cost of borrowing is going up as a result of the mini-budget.

Truss says the cost of borrowing for the government is not the same as interest rates paid by people with a mortgage.

Q: But it feeds through to that. You cannot just say this is something happening around the world.

Truss says the government made the right decision. The alternative was people paying up to £6,000 on their energy bills, and inflation being 5% higher than it otherwise would have been. And the economic slowdown would have been worse.

So it was right to increase borrowing this winter, she says.

She says the UK has the second lowest borrowing in the G7.

The government needs to bring down borrowing over the medium term. She has a plan to do that, she says. But it would have been wrong not to have acted, she says.

Truss repeats the point about the mini-budget presentation.

I’ve been honest – we should have laid the ground better.

Truss accepts presentation of mini-budget was flawed, saying government should have ‘laid the ground better’

Liz Truss says interest rates are going up around the world.

She understands people’s worries about that. And she says she would have prepared people for what would be in the mini-budget more effectively.

I do accept we should have laid the ground better. I have learnt from that. I will make sure in future we do a better job of laying the ground.

Laura Kuenssberg is now interviewing Liz Truss on the BBC.

Michael Gove, the former levelling up secretary, is a guest on the programme. He says he wants to hear Truss reassure people. And he says Truss needs to show people she “shares their values”.

There were “a number of mistakes” made in the mini-budget, he says. But he says there is time to correct them.

Tory chair Jake Berry defends party holding champagne reception with City financiers on day of mini-budget

Sophy Ridge is now interviewing Jake Berry, the Tory chair, on Sky.

Q: Did you have a drinks celebration with Tory donors after the mini-budget?

Berry says he was there. It was an event for donors. It was not a specific event for hedge fund managers. But he knows that at least one hedge fund manager was there.

Q: The Sunday Times says, as the markets were crashing, you were at the home of a Tory donors, with hedge fund managers and financiers who may have made money from the fall of the pound. How was that right?

Berry says he does not know that anyone did make money from the fall in the pound. And by the end of the week the pound was up, he says.

Q: How was the chancellor’s mood as he was drinking champagne?

Berry says he does not think Kwasi Kwarteng was drinking champagne. He thinks he was having a soft drink.

Q: The Sunday Times says Kwarteng gave “insights” into future policy at the event.

Berry says he did not hear that. Kwarteng gave a speech at the event. In that speech, he did not give any insight into future plans. And Berry says he is “sure” Kwarteng did not do that in private conversations either.

Truss says she will extend number of firms qualifying as small businesses, allowing them to benefit from less regulation

Here are some more lines from Liz Truss’s interview with Edward Malnick in the Sunday Telegraph.

One of the things we’ll be announcing is raising the definition of a small business, in terms of regulation, from 250 employees to 500 employees.

Truss said this move would affect 40,000 firms, and “make it easier for them to get on with their business”.

The prime minister rejects claims that she wants to relax immigration rules to increase the number of low skilled migrants coming to the UK, as part of her plan to boost growth. “That’s not true,” she insists, with a frown.

But she appears to confirm that the government will increase the number of seasonal agricultural workers and other “high skilled people” given permission to work in Britain.

“What we want to do, and the home secretary will be laying out more details on this, is make sure we’ve got the right mix of people coming into the country. So the high-skilled people that will contribute to the economy – I have also mentioned previously seasonal agricultural workers, for example, to help with farming. But this is not about getting lots of low skilled workers in, it’s getting people who will contribute to the economy.”

This is confusing beacuse normally seasonal agricultural workers would be described as low-skilled immigrants (even though, done properly, their work requires considerable skill).

The Telegraph can also reveal today that one plan being worked up is to increase the number of childminders by boosting the number of specialist childminder agencies. The agencies are registered to be inspected by Ofsted, reducing the administrative burden on individual workers. Ms Truss championed the idea while childcare minister between 2012 in 2014.

Change is always something that people might find worrying. But what I’m fundamentally saying is we do have to change, and the status quo isn’t an option …

We made promises to people in 2019 that things would be different. And what does that mean? It means more opportunities, higher wages, more investment, and those are all the things that I am seeking to unlock.

Of course, there’ll be resistance to that. Because there is quite a strong consensus around what I describe as a high tax, low growth economy. But ultimately [with] a high tax low growth economy the country becomes poorer.

During Covid we acted quickly and decisively on things like the furlough scheme without an OBR forecast, because the situation was urgent. And I and the chancellor believe that the situation is equally urgent, now, and here.

But the OBR has said it would have had time to publish a forecast alongside the mini-budget, although it has conceded that it would not have been as detailed as normal, because of the lack of time.

The reason I’m going to Prague on Thursday is I want to be talking to counterparts across Europe, including ones that are in the European Union and ones that aren’t – it’s a wide variety of countries – about migration, and how we collectively deal with migration. It’s not a problem Britain can solve on our own.

We have a lot of countries people are travelling through to get to Britain. So we need a better solution on that, we need to deal with the problem upstream, so that’s what we’ll be talking about, but also energy.

Liz Truss arriving at the Tory conference in Birmingham yesterday. Photograph: Rui Vieira/AP

Liz Truss says her critics are ‘declinist’ before Laura Kuenssberg interview at opening of Tory conference

Good morning. During the Tory leadership contest an internal Labour party document, leaked to the media, said that the election of Liz Truss could deliver a 10-point boost in the polls. The briefing, which was received with some scepticism, was intended to stop Labour getting complacent, and it was based on historical figures showing that in the past having a new prime minister normally has resulted in a bounce in the poll. It is now clear that the memo was much more prophetic than anyone realised – only it is Labour that is benefiting from the bounce, not the Conservative party, and that the bounce is worth much more than 10 points.

Of course, it was the mini-budget, not Truss’s election as Tory leader, that made the difference, but that distinction won’t be much consolation to Conservative MPs as they start their conference today in Birmingham. The main divide in the party at the moment is probably between those who think that the damage done by the mini-budget to Truss’s premiership is terminal, and those who think there is some slight chance of recovery.

Here are the latest polling figures from Opinium, which are covered in the Observer.

The Conservatives have lost a huge amount of their economic credibility.

When we last asked this question on 9th Feb, the Conservatives led on ‘running the economy’ by 1 point, and led on bringing down the national debt and deficit by 4 points. Now Labour leads on both of these pic.twitter.com/y1yj0m1NPI

— Opinium (@OpiniumResearch) October 1, 2022

Truss will be on BBC’s Sunday with Laura Kuenssberg later. (The programme starts at 8.30am, but Truss will probably be on soon after 9am.) It will be her first in-depth TV interview since the mini-budget debacle, and she will be hoping it goes better than her local radio media round on Thursday.

She has given an indication of what she is likely to say in an interview with the Sunday Telegraph in which she insisted that she was going to retain all the measures announced in the mini-budget (many Tories want her to shelve, or abandon, the abolition of the 45% top rate of income tax) and said that Kwasi Kwarteng, the chancellor, was doing “an excellent job”.

Stressing her belief that economic change is necessary, and her desire to “bring people with me on this journey”, Truss also claimed her critics were “declinist”. She told the Sunday Telegraph:

It’s a declinist mentality, the idea that Britain’s best days are behind us and that all this is about is managing the distribution between people, rather than growing the size of the pie. I believe we can grow the size of the pie. But we need to take the tough decisions to do that.

Here is the agenda for the day.

8.30am: Jake Berry, chair of the Conservative party, is among the guest on Sky’s Sophy Ridge on Sunday.

8.30am: Liz Truss is interviewed on the BBC’s Sunday with Laura Kuenssberg. Rachel Reeves, the shadow chancellor, is also being interviewed.

From 12pm: Conference fringe events start.

3pm: Michael Gove, the former levelling up secretary, takes part in an ‘in conversation’ fringe event organised by the Tory thinktank Onward.

4pm: The formal conference proceedings start, with speeches from Penny Mordaunt, leader of the Commons; Andy Street, mayor of the West Midlands; Jake Barry, chair of the party; Chris Heaton-Harris, Northern Ireland secretary; Douglas Ross, Scottish Conservative leader; Andrew RT Davies, Welsh Conservative leader; Robert Buckland, Welsh secretary; and Ben Wallace, defence secretary.

Comments will be opened later today. I try to monitor the comments below the line (BTL) but it is impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer questions, and if they are of general interest, I will post the question and reply above the line (ATL), although I can’t promise to do this for everyone.

If you want to attract my attention quickly, it is probably better to use Twitter. I’m on @AndrewSparrow.

Alternatively, you can email me at [email protected]



Source: The Guardian

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