UK Prime Minister Truss pledges to carry on as his party’s support dwindles

  • Truss says she’s sorry for the mistakes
  • She says she “stick around”
  • The economic agenda that caused the market rout has been dropped
  • Some Tory MPs are calling on him to resign

LONDON, Oct 18 (Reuters) – British Prime Minister Liz Truss has warned of tough times ahead after scrapping her sweeping tax cut plan and said she would continue to try to strengthen the economy, defying calls for his resignation.

After weeks of blaming “global headwinds” for investors ditching the pound and government bonds, Truss said on Monday she was sorry for going “too far too fast” with his radical economic plan to lift Britain out of years of lukewarm growth.

It was unclear whether the apology would quell a growing rebellion within her Conservative party, with a handful of lawmakers urging Truss to quit just six weeks after becoming prime minister.

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Truss said she would keep fighting and told her top ministers she wanted to level with the public that there were tough times ahead.

A new YouGov opinion poll showed that even among Conservative Party members who backed her for prime minister, more than half of those polled said she should quit. A third wanted his predecessor, Boris Johnson, back.

Markets, which plunged after Truss’ “mini-budget” on September 23, are still under pressure even after his finance minister, Jeremy Hunt, tore up his plans on Monday.

“I want to accept responsibility and apologize for the mistakes that have been made,” Truss told the BBC on Monday night.

“I wanted to do something to help people pay their energy bills, to fix the problem of high taxes, but we went too far too fast.” Truss said she was “sticking around” and would lead the Conservatives in the next election due in about two years, although the statement was accompanied by a laugh.

Earlier on Monday, Truss watched silently in Parliament as Hunt tore up the plan she proposed less than a month ago, which sparked a bond market rout so deep the Bank of England had to act to prevent pension funds from collapsing.

‘HONEST’

For some party members, the sight of a humiliated prime minister in parliament provided little confidence to fight on.

James Heappey, Minister for the Armed Forces, said Truss, his boss, could not afford to make any more mistakes.

Truss was due to speak later to her pro-Brexit lawmakers, who are angry that she has abandoned her tax cut campaign. The government has urged MPs to refrain from any attempt to oust him before presenting its medium-term budget plan on October 31.

“The Prime Minister said she wanted to be honest with the public that times will be tough, but by tackling long-standing issues now, we can put the country on a stronger path for the future. future,” his spokesman told ministers on Tuesday. .

Truss was elected by members of the Conservative party, not the wider electorate, on a promise to cut taxes and regulation to revive the economy in a policy that critics called a return to the Thatcherite-style “trickle down” economy of the 1980s.

But the markets reacted so dramatically that borrowing costs soared, lenders withdrew mortgage offers and pension funds plummeted.

Ryanair (RYA.I) boss Michael O’Leary described Britain’s economic situation as a ‘car accident’ which he blamed on the country’s decision to vote to leave the European Union in 2016.

SPENDING REPRESSION

With Britain’s economic reputation shattered, Hunt may now have to go further in seeking public spending cuts than the government would have if Truss hadn’t unleashed his economic plan at a time of surge in inflation.

Truss’s spokesman said the government could not yet make commitments in individual policy areas, despite previous promises, but was focusing on protecting the most vulnerable. He said Truss is keeping 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 Tory governments successions have cut departmental budgets over the past 10 years. .

One area of ​​spending already up for grabs is Truss’ massive two-year energy support package expected to cost well over £100billion, which Hunt says will now last until April before being reviewed.

($1 = 0.8807 pounds)

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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

Our standards: The Thomson Reuters Trust Principles.

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