Labor leader Sir Keir Starmer accused Liz Truss of being “lost in denial” as the Prime Minister was mocked in the House of Commons for claiming she had “protected” the UK economy.
Ms Truss also claimed at PMQs that the government need not cut public spending – despite the market chaos sparked by the credit spree outlined in Chancellor Kwasi Kwarteng’s mini-budget.
Asked by the Labor leader if she would keep her campaign promise to the Tory leadership not to cut public spending, Ms Truss replied: “Absolutely.”
Despite fears of fresh austerity measures to tackle the black hole in public finances, the prime minister claimed the government will tackle the debt “not by cutting public spending, but by making sure we spend well”.
Amid negative growth, rising mortgage rates and pension fears, Ms Truss was mocked by the Labor MP after claiming ministers were making sure “we protect our economy internationally at this very difficult time”.
Sir Keir told the Commons that Ms Truss was “lost in denial … no wonder investors have no faith in her government”.
He added: “There’s no point in hiding it, everyone can see what happened. The Tories went on a credit spree and sent mortgage rates skyrocketing… [Homeowners] will not be forgotten and they will not be forgiven. Nor should they.”
The Labor leader said it was time the Prime Minister “stop shitting on shit” and roll back the Chancellor’s “kamikaze” mini-budget, adding: “The economy is in turmoil. “
Ms Truss replied, “What we’re seeing is that interest rates are going up worldwide… they’re going up worldwide in the face of Putin’s appalling war in Ukraine.”
Ms Truss also endured laughter from the opposition pews when she was forced to rule out a snap election.
When asked about polls showing a majority of the public wants to vote, the Prime Minister replied: “The last thing we need is a general election.”
Ms. Truss and Mr. Kwarteng face spending cuts of more than £60 billion
The Institute for Fiscal Studies (IFS) said it was not possible to make cuts of this magnitude through mere efficiency savings – and warned it could require 15 per cent cuts to Whitehall budgets outside the NHS.
Disgusted with her promise not to cut public spending, Ms Truss said: “What we are going to make sure is that the debt goes down in the medium term. We will do that not by cutting public spending but by making sure we spend public money well.”
Sir Keir told Tory MPs: “You can cheer. I hope you listened very, very carefully to that last reply, because other people will have listened very, very carefully to it.”
But Downing Street later said that “given some of the global challenges we face” “difficult choices” need to be made.
The Prime Minister’s official spokesman said: “The Prime Minister was aware that government spending will continue to increase, but beyond that it is really up to the Chancellor to come up with something on the spending that he will do [October] 31.”
Ms Truss faces opposition from many of her own MPs to a proposal to make real benefit cuts. Some have told it pleasemynews They would also be on the front lines fighting cuts in public services.
Business Secretary Jacob Rees-Mogg hinted earlier on Wednesday that the Bank of England’s interest rate decisions – and not the mini-budget – were the main reason for the market chaos.
But the bank’s former governor, Sir Charlie Bean, said the “original sin” of the mini-budget’s “uncovered tax cuts” has sent markets panicking as the central bank mulls whether to continue its emergency support for pensions beyond Friday.
Sir Charlie said the bank may have to keep its contingency bond-buying program longer to protect pensions – despite insistence from Governor Andrew Bailey that the program would end on October 14.
Despite Ms Truss’s defiance, a senior No. 10 official has said it pleasemynews that staff have been instructed to revisit the actions presented in the mini-budget to see if any changes or U-turns may be needed.