Kwarteng says budget is ‘right plan’
BRITAIN’S chancellor of the exchequer Kwasi Kwarteng has admitted that with ‘hindsight’ his catastrophic mini-Budget – dubbed ‘Kamikwasi’ after it crashed the pound and spooked the markets – had been done ‘at very high speed’ and he was ‘shaken’ by the strength of the international reaction.
His surprise announcement of uncosted tax cuts for high earners sparked turmoil on the international currency and bond markets and caused a huge drop in the value of Sterling, prompting a massive Bank of England intervention to stabilise the UK economy. Mr Kwarteng conceded that the markets might have been mollified by more mention of spending restraint, but insisted that ‘the growth plan is the right thing’.
But as UK prime minister Liz Truss prepared to launch an advertising campaign to highlight the £150bn intervention to cap energy bills, Tory MPs gathering for their annual conference debated whether she would survive as prime minister until the next general election, with supporters of former chancellor Rishi Sunak lobbying for a ‘coronation’ for the failed leadership contender.
In an interview for the Mail on Sunday, Mr Kwarteng, 47, admits to being shaken by the market reaction to his budget, but added that he was ‘100% convinced that this was the right plan’.
He also denies that the markets would have been calmer if he had accepted the offer from the independent Office For Budget Responsibility to provide an economic forecast alongside his statement, arguing it was ‘too soon’.
He said: ‘We had to act quickly and we did but if we had a longer period, we would have talked to more people and engaged in the normal way. This was an emergency situation brought about by the fact that we were facing very, very high energy prices.’
He added: ‘Markets are moving and I want to stabilise them, I want to have a calm, reassured approach to this and I absolutely think this is the right thing we’re doing.’
Asked about a poll last week giving Labour a 33-point lead over the Tories, he said: ‘Of course we’re concerned about polls, we want to get back on our feet.’