Labour to pile pressure on government for further U-turns over ‘disastrous’ mini-Budget
Party intends to use parliamentary processes to force the Tory chancellor to reverse his budget
Labour is calling on the government to undo more of its “disastrous” mini-Budget when MPs return to parliament on Tuesday after conference season ended.
PM Liz Truss and chancellor Kwasi Kwarteng have already been forced to abandon their plans to scrap the 45p top rate of tax and bring forward the date of the announcement of their fiscal plan.
But, now that MPs are returning to Westminster, Labour’s leadership said the party will use parliamentary processes available in an attempt to force the chancellor to reverse his whole budget.
Other measures Mr Kwarteng announced in his fiscal statement last month include axing the planned rise in corporation tax and scrapping the cap on bankers’ bonuses.
Mr Kwarteng’s multibillion-pound package of tax cuts – to be paid for by borrowing – had caused the pound to plummet against the dollar, and forced the Bank of England to step in to reassure the markets.
Concerns have also grown about the impact a sharp rise in interest rates could have on households – whose budgets are already being squeezed by the cost of living crisis.
Shadow chancellor Rachel Reeves said: “This is a Tory crisis that has been made in Downing Street, and that is being paid for by working people.
“Families worried sick about bills haven’t even had so much as an apology from the Prime Minister or Chancellor, the architects of chaos unleashed on the British economy and family finances.
“Labour have forced this Tory government to U-turn throughout the cost-of-living crisis and we will do all we can in our power to do so again to get them to reverse this disastrous, kamikaze budget.”
Labour is also calling on backbench Tory MPs to make their concerns about Mr Kwarteng’s plan public, after the Conservative Party conference was punctuated by infighting and market turmoil.
Ms Reeves also said: “We need stability for our economy now and a real plan for growth that only a Labour government will bring. It will be up to Labour to clean up the mess of the Conservatives once again.”
On Monday, Mr Kwarteng agreed to set out his medium-term fiscal plan alongside the Office for Budget Responsibility (OBR) predictions on 31 October, as opposed to the original date of 23 November.
Prior to that, he was forced to abandon his plan to scrap the 45 per cent rate of income tax on earnings over £150,000 after spooking the markets.
This week is set to be crucial for Ms Truss as she is expected to be working to dispel doubts about the direction of her premiership, and win over any would-be rebels in her party.
Ms Truss is reportedly considering a U-turn on her plans for a below-inflation rise in benefits.
She is facing mounting opposition from Tory MPs over any government plans to not increase benefits with inflation, a move that would amount to real-terms cuts to incomes for the most vulnerable.
Ms Truss will attempt a charm offensive this week to get MPs on her side. She is expected to hold policy lunches with groups of colleagues and address the 1922 Committee of backbenchers on Wednesday.
Additional reporting by PA