Conservatives disown Liz Truss’s mini-budget

The Conservatives will “never again” put the UK’s economic stability at risk by making “promises we cannot afford”, the shadow chancellor has said, as his party seeks to distance itself from former Prime Minister Liz Truss’s mini-budget.

In a speech, Mel Stride disowned Truss’s £45bn package of tax cuts, which spooked financial markets and led to the former Tory PM’s resignation in 2022.

Stride said “mistakes were recognised” but acknowledged “the damage to our credibility is not so easily undone”.

Hitting back, Truss said she had a plan to “turbocharge the economy” and accused Stride of bowing to “failed Treasury Orthodoxy”.

She accused Stride of being “a creature of the system,” adding: “When he served alongside me as Treasury minister, he always went along with officials.”

The mini-budget was delivered by then Chancellor Kwasi Kwarteng in September 2022, after Truss won a Tory leadership contest to become prime minister.

The plan, which included big tax cuts and subsidies to reduce energy bills, shook confidence in the UK’s financial credibility, led to a rise in mortgage rates and a fall in the pound’s value.

Truss, who did not ask the UK’s independent forecaster to assess her economic plans, admitted “parts of our mini-budget went further and faster than markets were expecting” and stood down after 49 days in office.

The mini-budget was scrapped and Rishi Sunak – who had criticised Truss’s promises to fund tax cuts with borrowing – succeeded her as prime minister.

Labour accused the Conservatives of crashing the economy in 2023 and has repeatedly used Truss’s mini-budget as an attack line.

Disavowing the mini-budget, Stride said: “For a few weeks, we put at risk the very stability which Conservatives had always said must be carefully protected.

“The credibility of the UK’s economic framework was undermined by spending billions on subsidising energy bills and tax cuts, with no proper plan for how this would be paid for.”

And ahead of Chancellor Rachel Reeves’s spending review next week, Stride accused her of “abandoning” financial responsibility.

The current Conservative leader Kemi Badenoch was trade secretary in Truss’s government in 2022.

Stride – who was a key ally of Sunak when he was PM – said it would take time and honesty for the Conservatives to rebuild trust with voters.

“So let me be clear: never again will the Conservative Party undermine fiscal credibility by making promises we cannot afford,” Stride said.

In a furious response, Truss argued her economic plan “provided the only pathway for the Conservatives to avoid a catastrophic defeat” in last year’s general election.

Truss added: “As it was, Mel Stride and too many fellow travellers in the Conservative parliamentary party supported an economic policy that backed high immigration, raised taxes to a 70-year high and pursued unaffordable Net Zero policies – and the electorate delivered a devastating verdict on that record last summer.

“Until Mel Stride admits the economic failings of the last Conservative government, the British public will not trust the party with the reins of power again.”

In his speech, Stride also took aim at Reform UK and its leader Nigel Farage.

Last month, Farage – whose party is leading in national polls – set out plans to restore the winter fuel allowance, scrap the two-child benefit limit and lift the salary level at which people start paying income tax to £20,000.

The shadow chancellor said Reform’s “economic prescription is pure populism”.

“It doubles down on the ‘magic money tree’ we thought had been banished with Jeremy Corbyn,” Stride said.

Responding to Mel Stride, Reform UK Deputy Leader Richard Tice said his party would “take no lectures on economics from a party” that raised “government spending to 70-year highs and shrank economic growth to 70-year lows”.

“Meanwhile we unearth Tory-run councils wasting £30m on a bridge to nowhere,” Tice said. They can never be trusted again.”

A Labour spokesperson said Badenoch had “spent the last six months making billions of pounds of unfunded spending commitments and promoting Liz Truss’s disastrous top team”.

The spokesperson said the Tories “inflicted mortgage misery and sky-high bills on working people and argued “their unfunded plans show they will do it all over again”.

The Liberal Democrats accused the Conservatives of attacking Farage’s party for “the same fantasy economics” they had pursued.

Deputy leader Daisy Cooper said: “It’s insulting that the Conservatives think a few warm words will fool people into forgiving them for all the damage they did to the economy and people’s livelihoods.”