Labour: PM and Chancellor must “accept responsibility” for “economic chaos”

Labour’s Pat McFadden has argued that both Liz Truss and Kwasi Kwarteng must “accept responsibility” for the impact of the ‘mini-Budget’ and described them as the “architects of the economic chaos” seen over the past two weeks.

Commenting after Truss refused to say that she has trust in her Chancellor during an interview this morning, the Shadow Chief Secretary to the Treasury described the economic turmoil since the mini-Budget as a “Tory crisis made in Downing Street” and said Truss and Kwarteng “must both accept responsibility for it”.

“They have undermined trust in the UK economy and people will pay the price through higher mortgage payments. The fact that the Prime Minister can’t even say she trusts her Chancellor tells you all you need to know about the architects of the economic chaos into which they have plunged the country,” he added.

“Instead of disowning the problem and blaming one another they must put the country first and abandon their discredited trickle-down approach.”

The interview with the Prime Minister followed a government U-turn as Kwarteng confirmed on Monday morning that the government would be abandoning its plan to scrap the top rate of income tax. Truss had said during an interview on Sunday that Kwarteng made the decision to include the policy in the mini-Budget.

The government’s mini-Budget included £45bn in tax cuts funded by government borrowing, and revealed that the government expects its two-year scheme to fix energy prices will cost £60bn in the first six months.

Amid widespread criticism following the fiscal statement, Truss told the BBC on Sunday that the proposal to scrap the 45% rate of income tax for earnings over £150,000 was a “decision that the Chancellor made” – but she insisted that the package of tax cuts announced by Kwarteng represented the “right decision”.

Kwarteng released a statement on Monday, however, saying that the proposal had become a “distraction from our overriding mission to tackle the challenges facing our country”, adding: “We get it, and we have listened.”

Asked why she would leave “big decisions” to Kwarteng in the future and whether she trusts him, Truss said today that she works “very, very closely with my Chancellor”. She said the plans for the top rate of income tax were not a “core part” of the “growth plan” and that the government had “listened to what people said”.

“It was becoming a distraction so that’s why we immediately changed that policy and that’s the kind of government we are. We do respond when there are concerns and we act quickly,” she added.

Analysis by the Resolution Foundation reported that the richest households will still gain around 40 times as much as the poorest from the mini-Budget next year despite the government U-turn on the top rate of income tax.