Liz Truss has apologised for her “mistakes” and pledged to lead the Tories into the next general election as she fought for her job after a bonfire of her tax-cutting plans.
The Prime Minister said she has “adjusted what we’re doing” after the Government’s fiscal policies spooked the markets, putting in place a new Chancellor with a fresh strategy to “restore economic stability”.
“I do think it is the mark of an honest politician who does say, yes, I’ve made a mistake,” she said.
Labour accused the Tories of sparking a crisis paid for by working people, and insisted “no sorry” could change that.
Liz Truss is battling to save her premiership, despite only being in the role for a short spell. Daniel Leal
The Prime Minister is battling to save her premiership after her economic agenda was left in tatters by the dismantling of her former chancellor’s landmark mini-budget.
Speaking after she sat silent in the Commons for roughly 30 minutes as Jeremy Hunt – the new Chancellor – told MPs he was scaling back the energy support package and ditching most of the tax cuts announced by his predecessor, Ms Truss said she wanted to “accept responsibility and say sorry for the mistakes that have been made”.
Screen grab of Prime Minister Liz Truss listening to Shadow Chancellor Rachel Reeves' response the Chancellor's statement in the House of Commons, London. Picture date: Monday October 17, 2022. House of Commons
“I wanted to act… to help people with their energy bills, to deal with the issue of high taxes, but we went too far and too fast. I’ve acknowledged that,” she told the BBC.
Ms Truss became Prime Minister after winning the Tory leadership contest on the back of promises to dramatically cut tax.
Screen grab of Chancellor of the Exchequer Jeremy Hunt (centre), along side the Leader of the House of Commons Penny Mordaunt (left) and the Prime Minister Liz Truss, speaking in the House of Commons, London. Picture date: Monday October 17, 2022. House of Commons
But she has been humiliated by a raft of U-turns after last month’s so-called “fiscal event” sparked chaos in the markets.
In the three weeks following the ex-chancellor’s mini-budget, the pound hit its lowest point in history, the interest rate on Government loans rose to its highest for 30 years, and London’s shares crashed to a 19-month low.
The turmoil ultimately led to Kwasi Kwarteng’s downfall, with Mr Hunt – a supporter of Ms Truss’s rival Rishi Sunak in the Tory leadership race – chosen to take the reins at the Treasury.
On Monday, he tore up the Prime Minister’s economic strategy, abandoning plans to cut the basic rate of income tax in April and freeze alcohol duty from February.
The Government had already axed plans to scrap the 45p rate of income tax for top earners and had U-turned on a promise not to increase corporation tax.
The pound and UK Government bonds rallied in response to Mr Hunt’s emergency statement, while economists suggested the Chancellor’s approach may reduce the need for dramatic interest rate rises.
Plans to cut national insurance contributions and a reduction in stamp duty, which are already going through Parliament, will continue.