Kwarteng vows to curb spending but doubles down on mini budget despite days of market turmoil
30 September 2022, 22:48
Chancellor Kwasi Kwarteng has promised to bring government spending under control after a week of financial turmoil sparked by his mini budget.
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Mr Kwarteng has pledged to publish a "credible" plan to reduce government debt - but he also doubled down on his controversial plan, writing in the Telegraph that he "had no other choice".
"There is no doubt that this is an expensive intervention, but what choice did we have?" wrote the Chancellor.
"Think about the cost to the British economy of mass unemployment, a collapse in consumer spending, and viable businesses going to the wall... doing nothing was not an option."
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He went on to say the government's next statement - a "medium-term fiscal plan" on November 23 - will include a "commitment to spending discipline".
"This will be alongside a full forecast from the Office for Budget Responsibility," he said.
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Special pressure will be brought to bear on reversing the abolition of the 45p top rate of tax.
Parliamentary sources confirmed that discussions have already taken place between Labour and potential Conservative rebels.
Although the government has a healthy majority, it would only take around 35 Conservative MPs to put any legislative proposals at risk.
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The government will try and ensure some elements do not go to a parliamentary vote, but that will not be possible for everything.
Budget measures are not usually subject to rebellion and are traditionally considered issues of confidence.
If voted against MPs risk losing the whip.
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But government whips face difficulty on a number of fronts.
MPs may argue that they are not bound by elements, like the 45p rate, which were not included in the Conservative 2019 manifesto.
They may also say that given this was not a full budget, traditional rules do not apply.
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On Friday the Prime Minister and the Chancellor met the Office of Budget Responsibility (OBR) for emergency talks after their mini budget spooked the markets.
But the meeting with the head of Britain's independent financial forecaster ended after 45 minutes.
Ms Truss and Mr Kwarteng are expected to release the UK's financial forecast within days.
A statement released by the OBR on Friday said: "We discussed the economic and fiscal outlook, and the forecast we are preparing for the Chancellor's medium-term fiscal plan.
"We will deliver the first iteration of that forecast to the Chancellor on Friday October 7 and will set out the full timetable up to November 23 next week.
"The forecast will, as always, be based on our independent judgment about economic and fiscal prospects, and the impact of the Government's policies."
