On Monday, British Prime Minister Liz Truss apologized for her controversial mini-budget that sent the country’s currency plummeting, rocked financial markets and led her to fire her finance minister and closest political ally.
In an exclusive interview with the BBC, Truss insisted she would lead her Conservative party in the next general election, although her government has come under huge pressure from investors and party members since the unveiling of the mini- budget at the end of September.
The plan – which offered unfunded tax cuts, huge government borrowing and exempted energy companies from a windfall tax – sent the pound to its lowest level against the dollar in decades.
“I want to accept responsibility and apologize for the mistakes that have been made. I wanted to take action to help people with their energy bills deal with the problem of high taxes, but we have gone too far too fast” , Truss told the BBC’s Chris Mason.
“I have put in place a new chancellor with a new strategy to restore economic stability.”
Last Friday, Truss replaced Chancellor of the Exchequer Kwasi Kwarteng with Jeremy Hunt, a former multi-file minister who ran twice for the leadership.
Hunt has since rescinded many of his most prominent leadership campaign promises. Just four days after taking office, he said he would roll back “virtually all” of the tax measures announced three weeks ago by his predecessor. The stunning reversal would net £32 billion ($36 billion), he said.
A proposal to cut the basic rate of income tax from April 2023 has been postponed “indefinitely”. And although the government has said it will still guarantee energy prices for households and businesses through this winter, it will not commit to capping prices beyond next spring.
“No government can control the markets, but every government can provide certainty about the sustainability of public finances,” Hunt said. “The UK will always pay its share.”
Markets have stabilized somewhat in recent weeks, but only after major intervention from the Bank of England, rumors that the mini-budget would be scrapped and reports – which turned out to be true – that Kwarteng would be sacked.
These measures amount to gutting Truss’ flagship “growth plan” and leave her in a perilous political position.
The opposition Labor Party said Hunt’s statement underscored how the government had made life harder for ordinary people as mortgage rates and other borrowing costs soared in recent weeks.
“We need to make sure we have economic stability though, and that has to be my priority as Prime Minister. I acted in the national interest. I remain committed to the vision, but we will have to deliver it in a different way,” Truss told the BBC, after being asked if his vision of Britain was “dead”.
Truss said she still believed in the ‘high growth, low tax’ formula she campaigned on to win the Conservative Party leadership in early September – but said she recognized the UK was facing ‘ very difficult circumstances at the moment”.
Asked if she was ‘prime minister in name only’ after appointing a finance minister who ‘executes a plan a million miles from yours’, Truss replied: ‘I knew we had to act to protect economic stability, and that’s why I named Jeremy Hunt.
“I have worked closely with the Chancellor over the past few days to ensure we have the right package in place, but it would have been completely irresponsible for me not to act in the national interest in the way I have,” she said.
Truss added that it was “painful” to sack her “friend” Kwarteng as finance minister, but said she stood by her decision. She also apologized to her party’s lawmakers for her “mistakes”, but said she would “move on” and focus on delivering for the UK.
Constitutionally, the next general election does not need to be held until January 2025. There is no guarantee that Truss will survive that long, although eliminating the Tories’ fourth leader in just over six years would be difficult in the short term. due to party rules that shield her from a leadership challenge during her first year as premier.