Labour urges U-turn on “disastrous, kamikaze” Budget as parliament returns

Labour has said that it will demand that Kwasi Kwarteng take responsibility for his ‘mini-Budget’ and pressure the Chancellor to reverse the “disastrous” policies announced in the fiscal statement.

Commenting ahead of MPs’ return to Westminster on Tuesday, the opposition party said it will use the parliamentary processes available to it to force further government U-turns on what Labour has branded the “kamikaze” mini-Budget.

“This is a Tory crisis that has been made in Downing Street, and that is being paid for by working people. Families worried sick about bills haven’t even had so much as an apology from the Prime Minister or Chancellor, the architects of chaos unleashed on the British economy and family finances,” Rachel Reeves said.

“Labour has forced this Tory government to u-turn throughout the cost-of-living crisis and we will do all we can in our power to do so again to get them to reverse this disastrous, kamikaze Budget.”

The pound crashed to the lowest level to date against the dollar and government borrowing costs soared in the wake of the tax-cutting plans unveiled by Kwarteng in his fiscal statement last month. The measures announced include axing the planned rise in corporation tax and scrapping the cap on bankers’ bonuses.

The government was forced to abandon its plan to scrap the 45% rate of income tax on earnings over £150,000, unveiled in the mini-Budget, and Liz Truss is reportedly considering another U-turn on enacting a below-inflation rise in benefits.

The Shadow Chancellor added: “We need stability for our economy now and a real plan for growth that only a Labour government will bring. It will be up to Labour to clean up the mess of the Conservatives once again.”

Keir Starmer urged the Chancellor to reverse the “kamikaze mini-Budget” earlier today after Kwarteng told Tory backbenchers today that he would bring forward the government’s “medium-term fiscal plan” from November to the end of October.

In a letter to the Tory MP and chairman of the Treasury select committee Mel Stride, the Chancellor said the spending and borrowing plan would be announced on October 31st rather than the previously promised date of November 23rd.

Truss and Kwarteng caused confusion last week after government sources briefed journalists that the Chancellor would bring forward the fiscal statement to October, only for the Prime Minister and Chancellor to contradict this a day later.

Kwarteng told GB News that there had been no change, saying: “People have been reading the runes and the pauses, it’s going to be the 23rd.” Treasury sources, however, subsequently clarified that the statement would be brought forward and said he had been waiting to officially announce the change of date in parliament.

The Chancellor is expected to use the “medium-term fiscal plan”, alongside the release of fresh forecasts for the economy and public finances from the Office for Budget Responsibility, to reveal how the Conservatives will balance the books after promising more than £40bn in unfunded tax cuts in the mini-Budget.

Analysis published by the Resolution Foundation – following Kwarteng’s climbdown on the 45p tax rate – found that the richest households will still gain around 40 times as much as the poorest from the mini-Budget next year despite the U-turn.