Friday 30 September 2022 07:47 AM Liz Truss vows to stick to tax-cutting plans despite chaos trends now

Liz Truss is remaining defiant over her tax-cutting plans today as she holds crisis talks with the OBR over balancing the government's books after market chaos.

The PM and Chancellor Kwasi Kwarteng are meeting the watchdog's chair Richard Hughes after the lack of independent figures on the Emergency Budget helped trigger panic.

But Ms Truss has vowed to push ahead with the growth agenda despite rising anxiety on Tory benches - especially after a shock YouGov poll last night showed Labour with a 33-point lead. 

Anything like that result at an election would see the Conservatives wiped out, sparking open calls from some MPs for a rethink and setting a dangerous backdrop for the party's conference that starts in Birmingham this weekend. 

Allies have been urging the premier to stick to her guns - but insisting that she and Mr Kwarteng must improve the way they communicate their plans to voters and markets. The OBR has confirmed that it offered to provide preliminary forecasts in time for the Budget a week ago, but was rebuffed.

The Chancellor's tax cuts and energy bills bailout raised alarm that the UK's borrowing could spiral out of control, but it now appears ministers intend to slash spending. Benefits might not be uprated in line with rampant inflation as had been expected. 

In a round of interviews this morning, City minister Andrew Griffith told Sky News: 'It seems to me a very good idea that the Prime Minister and Chancellor are sitting down with the independent OBR – just like the independent Bank of England, they have got a really important role to play.

'We all want the forecasts to be as quick as they can, but also as a former finance director I also know you want them to have the right level of detail.'

Asked about reports the OBR could have carried out a forecast in time for the mini-budget, Mr Griffith said: 'That forecast wouldn't have had the growth measures in that plan. They were being finalised in the hours before the Chancellor stood up.'

On another tense day in the cost-of-living crisis: 

During a bruising round of local BBC radio interviews yesterday, the Prime Minister was repeatedly pressed to defend last week's mini-Budget, which was followed by a slide in the pound and a rapid rise in the cost of government borrowing.

Ms Truss acknowledged that many of the decisions were 'controversial' but said she had the 'right plan' for the economy - and hinted that abandoning the tax cuts could trigger a recession.

The Prime Minister's refusal to change course in the face of a torrent of opposition will inevitably raise comparisons with Margaret Thatcher's famous line - 'The lady's not for turning' - in the early difficult months of her premiership.

Miss Truss warned that the global economy was facing 'very, very difficult times', and said radical action was needed to restore economic growth. 'We won't see the growth come through overnight,' the Prime Minister said. 'But what's important is we are putting the economy on a better trajectory.

'We had to take urgent action to get our economy growing, get Britain moving, and also deal with inflation. Of course, that means taking controversial and difficult decisions, but I'm prepared to do that as Prime Minister.' The Chancellor also broke cover after days of silence.

Speaking during a visit to an engine plant in Darlington, Kwasi Kwarteng said last week's package was 'absolutely essential' if the economy was to generate the revenues needed to fund public services.

In a message to jittery Tory MPs last night, the Chancellor appealed for unity, saying: 'We need your support.' 

Mr Kwarteng told MPs yesterday the Government would 'show markets our plan is sound', adding: 'The only people who will win if we divide is the Labour Party.'

But last night a series of Conservative MPs broke cover to demand changes to the Budget, including dropping the plan to scrap the 45p top tax rate.

Former chief whip Julian Smith called for an immediate rethink, saying the Government should abandon the 45p change, 'take responsibility' for the collapse in the pound and 'make clear that it will do everything possible to stabilise markets and protect public services'. 

Former minister George Freeman called on ministers to bring forward a Plan B, adding: 'This is now a serious crisis with a lot at stake. ' 

Ministers deny that last week's mini-Budget was the trigger for the market backlash against the UK, saying that all countries are facing turbulence as a result of soaring energy prices caused by the war in Ukraine.