The Take: Treasury Chief Secretary bullish over surprise tax cuts

Chief Secretary to the Treasury Chris Philp MP says that the government will stick to its surprise tax cuts and additional borrowing, despite huge shocks in financial markets.

Today the british economy was hours away from what could have been one of the most serious financial crises in decades iran on pension funds and if the bank of england hadn’t intervened by buying up government bonds there could have been mass insolvencies by this afternoon do you take responsibility no the bank of england did its job the bank of england intervened

In the market to ensure financial stability that is exactly what the independent bank of england is there to do and i think the market has responded positively to that so i think we should all be very pleased the bank of england has done that what we’re focused on as a government is making sure the economy grows making sure that businesses do well making sure

People can get into better paid jobs that was the point of our growth plan last week and that’s what we’re focused on delivering i think everyone can agree that it is good news that there was an intervention but i guess the thing is why they felt the needs to intervene in the first place and in the five days since the budget a third of residential mortgages have

Been pulled from the market interest rates now predicted to double next year i mean that could mean people losing their homes and it’s self-inflicted it’s a budget that decided to prioritize helping the one people who the one group of people who don’t need help those on over 150 000 pounds a year are you going to change course well no we’re not let me just first

Of all take the point about what the uh event on friday the chancellor statement was designed to do so to be clear the abolition of the additional rate the 45p tax band uh constituted less than one twentieth less than five percent of the fiscal firepower that was deployed things like the national insurance tax cut uh bringing forward the cut to the basic rate of

Income tax and holding down corporation tax for businesses big and smaller like benefit everybody and there are 30 million workers who benefit from those national insurance and income tax decreases it were was a an event a statement designed to help everybody in the country directly and by getting the economy to grow it will help everybody as well now you made

A point before that about you know has this caused the volatility in the market and i think if you just take take a step back and look at the markets whether that’s currency markets or bond markets interest rates over the last year or so and the last nine months in particular globally we’ve seen quite a lot of i’m going to have to i’m going to have to come at you

There because you know you’re talking about global forces but it is clear that the uk is an outlier here let’s just look at the yield now 30 years just let me finish look at the yield on 30-year government bonds this is the cost of uk borrowing effectively the bedrock of these pension funds that the bank of england had to intervene to try and support well i’m not

Sure this is the uk is a clear outlier so i’m not sure this chart’s gonna be up today i checked looked at bond yields before coming in and the u.s bond rates and uk bond rates are pretty are pretty i don’t know where they got pretty close together right that is up today you can see it dropping a little bit but you can see the huge increase the red line is shooting

Ahead of the others you’re talking about global forces well you also talked about interest rates right i mean if you look at the interest rate cycle across the globe interest rates are increasing and actually higher in the united states than they are in the united kingdom so i think we are looking at global changes global volatility it’s been happening not just

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In the last few days it’s been happening in the last few months i mean the bank of japan made an intervention in their currency market just a few days ago and we’re responding to these same global forces but the government what the government is focusing on because obviously the monetary policy is the independent bank of england’s preserve but we’re focusing on

As a government is growth is making sure our economy is freed up to create the jobs of the future to create better paid jobs as well and that’s what the growth plan is designed to do we’ve also so you mentioned inflation interest rates we’ve also intervened decisively in the energy markets to make sure that households don’t face bills of three four five thousand

Pounds this winter which was forecast just a few weeks ago we’re making sure the average household doesn’t pay more than two and a half thousand pounds that is a huge intervention will help every single household in this country and every business as well as a huge intervention but this is partly why and it was markets are concerned as well because look you’ve

Got this huge intervention on the one hand you’ve got tax cuts on the other and you haven’t told them how are you going to pay for it why did you not publish the ovr why didn’t you even bother to get your sons done that’s why the chancellor of the exchequer has said very clearly he said it on friday and he said it again on monday just in case anyone missed it that

There will be a full uh medium-term financial plan medium term fiscal plan set out on the 23rd of november that will explain what his plans are but it will include getting debt over gdp down over the medium term it’ll be fully scored by the obr and we should also just keep in mind that we start today with the second lowest debt to gdp ratio of any g7 country and

Billing the question you just asked will get very clearly and comprehensively answered including an independent obr score on november the 23rd okay i i will i want to ask you a bit more about that in a minute but just before we do because it’s really interesting talking to you it’s pretty clear that you are not changing course you’re effectively pushing on there’s

Going to be no reversal of what the plan of the government not at all because getting because getting behind safety because getting britain’s economy growing is so important important to raise wages it might be important to pay the taxes my point is why do you think you were wrong and so many other people are you were right sorry yeah there we go why do you think

You were right and so many people are wrong i just want to look because here’s the international monetary fund they’ve said given the elevated inflation pressures in many countries including the uk your point we do not recommend large and untargeted fiscal packages at this juncture as it’s important that fiscal policy does not work at cross purposes to monetary

Policy and they go on to say the nature of the uk measures will likely increase inequality a really a clear message there from the imf against your plans and it’s not just them the former bank of england deputy governor charlie bean so the budget went catastrophically wrong the chief economist at capital economics the idea is going to spare on economic growth i find

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Difficult to believe even julie and jessup of the iea usually someone who’s quite pro liz truss even i can’t put a positive spin on this why is the government so confident that you’re right and everyone else is wrong what do you know that we don’t well first of all getting growth going is is critically important to our countries let me just answer the question look

If you look at our growth um in recent years it needs to be higher higher growth leads to more jobs better pay and it makes us more able to pay the tax bills of the future to fund the nhs health police and so on and that’s why the growth plan is so important it is of course also important to be fiscally responsible which is why the medium-term fiscal plan and the

Accompanying obr scoring is going to be set out in full on the 23rd you know if you look at the reaction to the statement the chancellor statement uh quasi-parting’s statement on friday and look at the response of people like the cbi the confederation of british industry look at the response of people like the federation of small businesses or the british chambers

Of commerce they all really strongly welcome these packages and these measures because they understand it will help their members the businesses who create jobs and who pay taxes it’ll help them grow and it is their opinion i think and it’s the way that their members respond to this that i think is the most important thing here quasi quantum on sunday there’s more

To come are you planning more tax cuts i think quasi-coating is planning to lay out our approach to getting the country’s finances responsibly managed in his uh fiscal uh medium-sum fiscal plan on november the 23rd um that is what we should be focusing on i don’t expect that to uh involve significant measures on the tax side it’ll be looking at a long-term fiscal

Uh prognosis okay so if you so if you’re looking at the long-term fiscal sustainability and it’s not going to be so much about tax the elephant in the room is spending are you going to be cutting spending look we’re going to beat so first of all it’s really important to say we are going to be sticking within the existing spending envelope that’s the comprehensive

Spending review 2021 envelopes set out a year or so ago that is very important because we’re going to live within those means that means they make sure well no you can look at it yourself you’ll see where what it sets out it means the public services are properly and but with inflation going funded tax changes that you want to see it means spending cards doesn’t

It well the comprehensive spending with you like set out the spending envelope we are going to stick to that spending envelope which makes your public services are properly and responsibly uh funded beyond that we’re going to make sure that in the medium term that debt to gdp figure which is already the second lowest in the g7 is on a downward trajectory over the

Median term that is the responsible thing to do and that’s what the chancellor quasi crossing will be doing on november the 23rd my colleague sam coat says the cabinet have already been asked to find efficiency savings is that true well the government always wants to operate more efficiently we want to make sure that our taxpayers money money paid by you know our

Neighbors my constituents is spent as well as possible and that it’s prioritized towards projects which deliver growth you know infrastructure for example we talked a lot about getting more infrastructure built so obviously we’re constantly looking at that but i was going to emphasize again we’re going to be sticking to the existing spending envelope which was set

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Out a year ago it covers a three-year period we’re in the first of those three years now it makes your public services are properly and responsibly funded and we’re sticking to that so it’s pretty clear that you say you’re sticking to the uh the envelopes but with inflation that is going to be a squeeze for many uh different uh departments real terms cut you’re also

Well don’t forget this spending review by the way it did entail um real-time increases when it was written so just keep that in mind but that was before inflation went to 10 yeah although inflation affecting the public sector isn’t as high as 10 for various reasons we can get into if you want okay um let’s let’s not do that although i’m sure that many headphones

And hospitals will still be looking at the energy energy bills that they’re facing but of course but of course hospitals and schools are beneficiaries of the business energy price guarantee as much as you and i as individuals are as well okay now you speak you’re not gonna i just want to have a little look at the recent polls that we’ve seen as well because this is

Something that a lot of your colleagues are going to be concerned about they’re going to have a look at the market reaction to the budget and they’re also going to be looking at things like this which is you know the latest uh polling showing a record at labor leads up at 45 for labor the conservatives on 28 you speak to your colleagues is it right that letters of no

Confidence the prime minister have already started going in well i’ve certainly haven’t heard about that and i’ll be astonished if that was if that was true like what matters isn’t a snap opinion poll done on a particular day of the week it’s not it it’s a longer term trend than that well i’ll tell you what the longer term trend is going to be the longer term trend

Is going to be getting growth going which the growth plan will deliver and when that delivers higher growth for this country we’re going to see wages going up we’re going to see more and better jobs getting created we’re going to see a more sustainable tax base to fund public services that is what i think the public wants and expect to see and when that growth plan

Delivers in the fullness of time i think the public will be enthusiastic about that as people like the british changes out well and as people like the british chambers of commerce the federation of small businesses and the confederation of british industry are enthusiastic about it already two very quick questions to end because we are out of time are you going to

Recall parliament uh well that’s not my decision i haven’t heard that being discussed we’ve got party conferences going on um so i mean that’s not my job to decide that but i haven’t heard that suggested and also where is listras well i met this trust in number 10 downing street about an hour ago do you not think that you should be out reassuring people when we’ve

About to see a run on pension funds when the bank of england had to step in why haven’t we heard from her well at least trust is busy you know running the country she’s busy setting our policies we were discussing uh the medium term fiscal plan uh with her the chancellor and i um and she’s getting on with her job as you would expect her to be okay thank you very much indeed thank you

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The Take: Treasury Chief Secretary bullish over surprise tax cuts By Sky News