What did Liz Truss say on Laura Kuenssberg show? What PM said about Kwasi Kwarteng and tax cuts - key quotes

For the first time, Liz Truss has admitted she made mistakes with the way the government revealed its mini budget, saying that she “could have laid the ground better”.

In the week that followed chancellor Kwasi Kwarteng’s announcement that the government would be abolishing the 45p rate of tax for top earners as it focused on economic growth, the financial markets were spooked and the pound was sent crashing to a record low against the dollar.

Only the Bank of England’s mid-week intervention on buying government bonds stopped a run on pension funds.

After such a tumultuous week, the prime minister is now in Birmingham for what could be a painful Tory party conference. So how did she set the scene in her broadcast interviews this morning (2 October)?

On how the plans were communicated:

Asked by the BBC’s Laura Kuenssberg if she regretted the way the plans were communicated, the PM acknowledged she could have “laid the ground” better.

She said: “I’m afraid there is an issue that interest rates are going up around the world and we do have to face that. But I do want to say to people I understand their worries about what has happened this week.

“I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act.

“But I do accept we should have laid the ground better… I have learnt from that and I will make sure that in future we do a better job of laying the ground.”

On how the decision to abolish the top rate of tax was taken:

In one of the most surprising moments from her interview, Truss revealed that scrapping the top rate of income tax was a decision made by Kwasi Kwarteng rather than being agreed by the wider Cabinet. Indeed, she appeared to lay the responsibility firmly with her chancellor.

Asked if she discussed the controversial move with the whole Cabinet, the PM said: “No, no we didn’t. It was a decision the Chancellor made.”

On future cuts to public services:

There are reports that the government is about to embark on more austerity, a move which was signalled by Levelling Up secretary Simon Clarke in an interview yesterday.

Truss did not rule out cuts to public services, but simply said they will remain “excellent”.

She added: “What I’m going to do is make sure we get value for money for the taxpayer. But I’m very, very committed to making sure we’ve got excellent frontline public services.

“And I’m not going to go into what the Chancellor will announce in his medium-term fiscal plan. He’s going to announce that very shortly, it will come together with an OBR forecast.”

Pressed on whether her refusal to rule out cuts suggested that she will go down that path, she said: “No it doesn’t, because I can’t exactly set out what is going to be in this plan. What I can promise is we’re going to reduce debt as a proportion of GDP.”

On whether benefits will rise with inflation:

The new PM has remained tight-lipped on the question of whether benefits will rise with inflation, a commitment made by her predecessor Boris Johnson.

She said: “This is something the Department of Work and Pensions Secretary is looking at at the moment. She will make a determination on that and we will announce that this morning.”

On the question of departmental real-term cuts, the PM said: “I’m not going to write future budgets on your show. I believe in outcomes rather than inputs, so I believe in what people see and what people feel.”

On whether pensions will rise with inflation:

Unlike benefits, Truss said she would ensure pensions rise in line with inflation, saying: “I’ve committed to the triple lock. Yes.”

On Kwasi Kwarteng’s champagne party with hedge fund managers:

Truss said Kwarteng “meets business people all the time” when grilled about reports in the Sunday Times that the chancellor attended a private champagne reception with hedge fund managers who stood to gain from a collapse in sterling following his mini-budget.

She said: “The Chancellor meets business people all the time, that’s his job. I do not manage Kwasi Kwarteng’s diary, believe me.”

Asked whether it would have been better if he had not gone as people are struggling with the cost-of-living crisis, she said: “I get up every morning as Prime Minister thinking how can we make our country more successful, how can we reassure people, how can we help people get through these very difficult times and we do face difficult times…

“And that’s what I’m focused on. That’s what the Chancellor is focused on and that is what the whole Cabinet is focused on.”

On whether the mini budget had a democratic mandate:

Asked what democratic mandate she had for her plans, Truss said: “What people voted for in 2019 when they voted Conservative, sometimes for the first time in many years, is they voted for a different future.

“They voted for investment into their towns and cities, they voted for higher wages, they voted for economic growth.

“That is what our plan will deliver. I’m confident it will deliver, I’m absolutely confident that what we are doing on speeding up road projects, unleashing investment from the City, reducing taxes will deliver that.

“I’m not saying it’s not going to be difficult. We do face a very turbulent and stormy time but it will deliver, it will deliver on the promises we made.

“And in the circumstances I’m very clear that we had to act quickly to get this plan going.”

On whether the OBR will publish a forecast before the medium term fiscal plan:

Truss ruled out publishing forecasts from the independent Office of Budget Responsibility (OBR) ahead of the chancellor’s mid-term fiscal plan on 23 November.

She also said the government “simply didn’t have time” to publish OBR data alongside Kwarteng’s mini-budget: “It does take a while to produce those forecasts… We simply didn’t have time to go through that process because it was a very urgent situation.”

She promised that the OBR is “going to be a full part of the medium-term fiscal plan”.

But asked if she will publish a forecast before the end of November, Truss said: “Well, no, for the following reason, Laura, that it’s not yet ready.”