Liz Truss defends Budget but stops short of guaranteeing people’s pensions are safe

Liz Truss defends Budget but stops short of guaranteeing people’s pensions are safe

Liz Truss on Thursday defended the mini-Budget as the “right plan” despite it sending the pound into a nosedive and sparking market mayhem.

She also stopped short of guaranteeing that people’s pensions were safe.

During a round of media interviews, she firmly backed Chancellor Kwasi Kwarteng’s fiscal statement on Friday.

She said: “I am very clear the Government has done the right thing.”

“This is the right plan that we’ve set out.”

But appearing on BBC Bristol, Ms Truss was asked by presenter James Hanson whether she could guarantee to listeners that their pensions were safe.

She responded: “Well, the Bank of England does a very, very good job on delivering financial stability.”

Mr Hanson intervened, saying “that’s not an answer Prime Minister”, pressing her again whether she could guarantee that people’s pensions are safe.

Ms Truss said: “Well, the Bank of England do that and they do a very good job of it.”

The Bank of England was forced to intervene on Wednesday to stop a collapse in pension fund investments.

It stepped in with a £65 billion bond-buying programme to address what it described as a potential “material risk to UK financial stability”.

Shadow work and pensions secretary Jonathan Ashworth said: "The comments from the Prime Minister this morning are extremely worrying. People deserve to know what these market movements mean for their pensions.”

Liberal Democrat deputy leader Daisy Cooper added: “It beggars belief that Liz Truss repeatedly failed to guarantee that people’s pensions will be safe.”

Earlier on Thursday, a Cabinet minister claimed that there were no mistakes in Mr Kwarteng’s mini-Budget.

It has been heavily criticised by former Tory Chancellor Ken Clarke, ex-Bank of England governor Mark Carney, economists, as well as Tory, Labour and Liberal Democrat MPs.

But asked on BBC Breakfast if there were any mistakes in the mini-Budget, Mr Kwarteng’s deputy at the Treasury, Chris Philp said: “No, I don’t think so because we need to have a growth package which gets our economy moving.

“I’m not going to apologise for making an intervention in the energy markets, that is protecting every single household in this country from energy bills that could have been crippling.

“Nor am I going to apologise for having a growth plan designed to get our economy moving, increasing wages, creating new jobs.”

But Liberal Democrat Treasury spokeswoman Sarah Olney condemned Mr Philp’s denial of any errors in the mini-Budget.

She said: "This is completely tone-deaf at a time people are worried sick about the economic chaos caused by this shambolic budget. It is an insult to families facing soaring mortgage bills worried about how they will get through the months ahead.

"It’s about time Conservative ministers showed some humility, admitted their mistakes and fixed their botched budget that is causing misery for millions."

Some economists are warning that the damage to the economy caused by the mini-Budget has undermined growth prospects.

Earlier, former Chancellor Lord Clarke slammed the mini-Budget as a “mistake” which no modern-day Conservative government would have made.

In scathing criticism, the peer accused the current Chancellor of having “rushed out” his fiscal statement last Friday which send the pound plunging and caused mayhem on financial markets.

He accused Mr Kwarteng of delivering “rather pointless tax cuts” and urged him to swiftly make a new statement to reassure the markets, warning him against “rushing into something else more stupid”.

Lord Clarke, 82, who served in Margaret Thatcher’s Cabinet and was Chancellor under John Major, told Times Radio: “I’ve never known a budget to cause a financial crisis like this before.

“They rushed out the budget, building on all the hubris of the leadership election campaign and some of the rather wild things that had been said...through an overlong election campaign.

“They should have delayed their budget by a week or two, actually given it some thought, and not run up a very great deal of debt, all based on rather pointless tax cuts.”

The Bank of England was forced to intervene on Wednesday to stop a collapse in pension fund investments after the cost of public borrowing spiralled following the mini-Budget which included axing the top 45p rate of income tax.

Mr Kwarteng announced £45 billion overall of tax cuts, a £60 billion energy bills support package, and loaded Britain up with £72 billion more debt.

But his plan, which came without an update from the independent spending watchdog, the Office for Budget Responsibility, sent sterling into a nosedive against the dollar.

Calling for a swift statement to explain how the growth plan would be funded, Lord Clarke said: “Ideally, that statement should come in the next two or three days. But we don’t want rushing into something else more stupid.

“Basically, we can’t have both the government and the Bank saying that they’re not able to do anything more till November, that would be very, very worrying.”

He added: “If the pound sinks any further, then they will have to perhaps retract some of the measures.

“They’ve got no money to spend now, which is a great pity.”

He also stressed: ““I still hope in two years’ time, they might look like a normal, competent, Conservative government because no Conservative government in my lifetime would ever have made a mistake of this kind. Fiscal discipline or good housekeeping, as Margaret always used to say, was one of the very strong cards that the government had because it was regarded as good at running the economy by the public.”

Mr Kwarteng’s deputy at the Treasury, Chris Philp, rejected suggestions that the Chancellor should resign and defended the Government’s growth plan.