- Truss says he regrets the mistakes
- He says he’s “staying”
- The economic agenda that caused the market crash was discarded
- Some Conservative MPs are calling for her to resign
LONDON, Oct 18 (Reuters) – British Prime Minister Liz Truss warned of tough times ahead after abandoning her sweeping tax cut plan and said she would continue to try to put the economy on a stronger footing, defying calls for his resignation.
After weeks of blaming “global headwinds” for investors dumping the pound and government bonds, Truss said on Monday he regretted going “too far and too fast” with his radical economic plan to get Britain out of years of tepid growth.
It was unclear whether the apology would quell a growing rebellion in her Conservative Party, with a handful of lawmakers urging Truss to resign just six weeks after becoming prime minister.
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Truss has said he will fight on and told his prime ministers he wanted to equalize with the public that there were tough times ahead.
A new YouGov opinion poll showed that even among Conservative Party members who backed her as prime minister, more than half of respondents said she should resign. A third wanted his predecessor, Boris Johnson, to return.
Markets, which slumped after Truss’s “mini-budget” on September 23, are still under pressure even after his Chancellor of the Exchequer, Jeremy Hunt, scrapped his plans on Monday.
“I want to accept responsibility and apologize for the mistakes that have been made,” Truss told the BBC on Monday afternoon.
“I wanted to act to help people with their energy bills, to tackle the issue of high taxes, but we went too far and too fast.” Truss said he was “hanging in” and would lead the Tories into the next election in two years’ time, although the statement was met with laughter.
In the early hours of Monday, Truss watched in silence in parliament as Hunt scrapped the plan he proposed less than a month ago, which led to a bond market crash so deep that the Bank of England had to act to prevent pension funds from collapsing.
“HONEST”
For some in the party, the sight of a humiliated prime minister in parliament provided little confidence on which to fight.
James Heappey, the armed forces minister, said Truss, his boss, could not afford to make more mistakes.
Truss was later due to speak to his pro-Brexit lawmakers, who are angry that he has abandoned his campaign for tax cuts. The government has urged members of parliament to refrain from any moves to oust her before it presents its medium-term fiscal plan on October 31.
“The prime minister said she wanted to be honest with the public that times would be difficult, but by addressing long-standing issues now, we can put the country on a stronger path for the future,” her spokesman quoted ministers as saying on Tuesday. .
Truss was elected by members of the Tory party, not the wider electorate, on a promise to cut taxes and regulation to boost the economy in a policy critics dubbed a return to the “trickle down” economy in the Thatcherite style of the 1980s.
But the markets reacted so dramatically that borrowing costs rose, lenders withdrew mortgage offers and pension funds plummeted.
Ryanair ( RYA.I ) chief Michael O’Leary described Britain’s economic situation as a “car crash” which he blamed on the country’s decision to vote to leave the European Union in 2016.
PREMIUM OF GASES
With Britain’s economic reputation in tatters, Hunt may have to go further to find public spending cuts than the government would have if Truss had not unleashed his economic plan at a time of rising inflation.
Truss’s spokesman said the government could not yet make commitments on individual policy areas, despite previous promises, but was focused on protecting the most vulnerable. He said Truss kept his promise to increase defense spending by 2030.
Torsten Bell, the head of the Resolution Foundation, a think tank, said the government may have to cut public spending by around 30 billion pounds ($34 billion), a politically very difficult task after successive governments Conservatives cut departmental budgets over the last 10 years. .
One area of spending already missing is Truss’ vast two-year energy support package expected to cost more than £100bn, which Hunt said would now run until April before being reviewed.
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Written by Kate Holton and Elizabeth Piper; Additional reporting by William James, Andrew MacAskill, Kylie MacLellan and Paul Sandle; Editing by Raissa Kasolowsky, Gareth Jones and Tomasz Janowski
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