Keir Starmer: Recall Parliament and abandon mini-Budget

Sir Keir Starmer has called for Parliament to be recalled to address the financial turmoil that has followed last week’s mini-Budget.

The Labour leader urged Liz Truss to end the current recess after the Bank of England was forced to intervene on Wednesday in an attempt to avert a pension crisis.

Andrew Bailey, the Governor, hopes to break the current cycle by buying bonds to try to halt the markets turmoil.

It came after warnings from fund managers and investment banks that the sharp fall in bond prices had forced pension funds to sell bonds in order to meet margin calls.

Speaking at the end of Labour’s conference in Liverpool, Sir Keir told reporters Ms Truss’s administration had “clearly lost control of the economy”.

“The move by the Bank of England is very serious, and I think many people will now be extremely worried about their mortgage, about prices going up, and now about their pensions,” he said.

“What the Government needs to do now is recall Parliament and abandon this Budget before any more damage is done.”

Torsten Bell, the chief executive of the Resolution Foundation, described the mini-Budget as “by far the worst unforced economic policy error of my lifetime”.

“The scale of the destruction it is bringing is hard to comprehend,” he said. “Higher import prices, surging mortgage bills, higher deficits risking big spending cuts to come, pension funds taking big losses on forced asset sales, and likely lasting risk premiums for UK firms and the Government.”

In a nod to Black Wednesday in 1992, Mr Bell added: “At least there was an argument for joining the ERM.”

There was also the first public sign of discontent from Conservative MPs. Robert Largan, the MP for High Peak and a member of the 2019 Tory intake, said he had “serious reservations” about some of Ms Truss and Kwasi Kwarteng, the Chancellor’s, economic policies.

“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,” he wrote on Twitter. “In my view, this is a mistake.

“This is a deeply worrying time. Elected officials need to be honest about the choices we face and Government needs to take a pragmatic, fiscally responsible approach on the short-term support needed for people and long-term strategic thinking to ensure our energy security.”

In a call with MPs on Tuesday, Mr Kwarteng said things were “settling down” after acknowledging market volatility, according to one MP who listened in.

He also defended his decision to scrap the additional top rate of income tax, saying it was the “right” call despite attacks from Labour, which has said it would reverse it in government.