Reeves demands Tory MPs back recall of parliament to reverse mini-Budget

Rachel Reeves has urged Tory MPs to back Labour’s demand for parliament to be recalled early to reverse the government’s mini-Budget, declaring that those who do not will be “complicit in this reckless bout of economic self-harm”.

The Bank of England was forced into emergency action on Wednesday amid concerns that the proposals set out by Kwasi Kwarteng last week could lead to mass insolvencies of pensions funds.

The Bank pledged to buy £65bn of government bonds over the next fortnight. It said its decision to buy the bonds at an “urgent pace” was driven by concern over “a material risk to UK financial stability”.

Liz Truss has resisted calls to reverse the plans set out in the mini-Budget. On a broadcast round with regional media this morning, the Prime Minister said: “I have to do what I believe is right for the country and what is going to help move our country forward.”

The Shadow Chancellor said: “The Prime Minister’s interviews this morning have made this disastrous situation even worse. Her failure to answer questions about what will happen with people’s pensions and mortgages will leave families across the country facing huge worry.

“It is disgraceful that the family finances of people across the country are being put on the line simply so the government can give huge unfunded tax cuts to the richest companies and those earning hundreds of thousands of pounds a year.

“This is a serious situation made in Downing Street and is the direct result of the Conservative government’s reckless actions.

“If the Prime Minister continues to prioritise saving her face over saving people’s homes, Tory MPs must join Labour in calling for parliament to be recalled so this kamikaze budget can be reversed. Failure to do so will make them complicit in this reckless bout of economic self-harm.”

Keir Starmer demanded on Wednesday that parliament be recalled early from conference recess to scrap the mini-Budget “before any more damage is done”.

The Labour leader declared that the “government has clearly lost control of the economy”, adding: “Unlike other situations where it may be a world event, an unexpected event that causes this sort of crisis, this is self-inflicted.

“This was made in Downing Street last Friday. And for what? For uncosted tax breaks for those earning hundreds of thousands of pounds.”

The mini-Budget, delivered by the Chancellor on Friday, set out a series of tax cuts, including scrapping the top rate of income tax for the highest earners, cancelling a planned rise in corporation tax and reversing the increase in National Insurance.

The International Monetary Fund criticised the government’s plans in a statement released on Wednesday, declaring that the measures will “likely increase inequality”.

The IMF said: “Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy.”

Speaking to BBC Radio Kent this morning, Truss said the current crisis is a “global problem”, telling listeners: “We’ve seen difficult markets around the world because of the very difficult international situation we face. And what our government has done is we’ve taken decisive action.”

She told BBC Radio Norfolk that the government had set out the “right plan”, adding: “Of course there will always be people who will oppose… particular measures. And it’s not necessarily easy. But we have to do it.”

Downing Street has rejected calls for MPs to return to Westminster early. Parliament is currently in recess for party conferences and is due to return on October 11th.