LONDON (Parliament Politics Magazine) – PM Truss, her government “did the right thing” in its mini-budget to stimulate economic growth.
The prime minister said, speaking in a number of local radio interviews with the BBC this morning that “urgent action” and “controversial and difficult decisions” had to be made to improve the circumstances in the UKÂ
But she added that her government was ready to do what it took to make that happen. What was critical for her was they got the economy rolling and made sure that people could get through the winter.
After the announcement of the mini-budget on Friday, which featured a number of tax cuts including the scrapping of the 45p top rate, rolling back a rise in National Insurance, and cancelling a rise in corporation tax, the markets were rocked.
Economists were worried about the amount of borrowing required to pay for the policies, this resulted in the pound falling.Â
In order to prevent a “material risk” to the financial stability of the UK, the Bank of England was compelled to step in and start a temporary bond-buying programme in order to protect some pension funds from failing.
Despite the problems that have occurred, Ms. Truss said that the government had “done the right thing by taking action urgently.”
Reiterating the Bank of England’s independence, she stated that the Treasury was “working closely” with it, but she also asserted that there were tough markets throughout the world” as a result of the Ukraine war and that the problem in the UK did not root from here.
The average bill was capped at £2,500, and businesses received similar assistance, as the PM insisted was the largest portion of the government’s interventions. However, this was disclosed more than a week before the mini-budget and is not believed to be the primary cause of the market’s reaction.
When asked if the policy and others were fair to the general public, the PM responded saying that having lower taxes across the board helped everyone because it boosts the economy, and for too long in the country, the debate had focused on distribution rather than on growing the economy.
It was unfair to have a recession, it was unfair to live in a community that wasn’t getting investment, and it was unfair if their high tax load prevented them from getting high paying jobs in the future. That’s what was unfair, she said.
