Senior Tory warns Truss economic U-turn must be ‘significant’
A senior Conservative MP has said that Liz Truss must not “nibble at the edges” but instead perform a “powerful” and “significant” U-turn with its so-far disastrous economic plan.
Mel Stride, the chair of parliament’s Treasury select committee, told the BBC’s Today programme: “My personal view is that it [a U-turn] should happen, we have reached a point where we need this very powerful and significant signal to the markets that fiscal credibility is firmly back on the table, and I think that means doing something right now and not delaying.
“Doing something very significant too – right at the heart of that will be unwinding the position on corporation tax.
“The danger here is the argument in the room lands in a place where they decide to nibble at the edges of this and I’m afraid I don’t think that will cut it, and you could end up in that circumstance in the worst of all worlds where you’ve U-turned but doesn’t settle the markets in the way we need to.”
Stride’s comments came as the chancellor, Kwasi Kwarteng, cut short a visit to Washington DC on Thursday, adding to signs that the government is preparing to announce a U-turn over its plan to scrap a rise in corporation tax, a centrepiece of its much vaunted “growth plan”. The chancellor was expected to land in London on Friday morning and head to talks with the prime minister.
Kwarteng’s so-called mini-budget, fully endorsed by Truss, sent shockwaves through the financial markets with its £45bn package of unfunded tax cuts.
Yields on gilts, UK government bonds, surged in the wake of the announcement on 23 September, a signal of a crashing investor confidence in the UK’s fiscal credibility.
Both bonds and the pound steadied at the start of London trading on Friday as the Bank
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