LIZ Truss and the Chancellor should focus on easing the cost of living crisis rather than trying to save face over the recent economic turmoil, Labour’s shadow Treasury chief secretary has said.
Pat McFadden told GB News: “Last Friday, it was an act of recklessness that was unforced, the Government didn’t have to do this.
“They chose to implement a series of measures which have resulted in enormous financial and economic instability starting with the fall in the value of the pound spreading through the mortgage market, where we’ve seen banks and building societies withdraw hundreds of products.
“And yesterday, we almost had a situation where major pension funds were running into trouble, so this has been a reckless act of choice and not some tough decision that was necessary and it’s resulted in enormous instability for the country.”
In his interview during Breakfast on GB News, he continued: “It’s been the way that they’ve handled it since then. That has sent these ripples around the world with the Bank of England having to intervene, but that’s just a short term specific intervention.
“The Bank has still got to make their decision with regard to interest rates which will affect people’s mortgages in the weeks to come.
“And we’ve also had the extraordinary warning from the IMF, the kind of warning usually only issued to an emerging market country and not a major developed G7 economy like the United Kingdom.
“The important thing is to revisit the measures and not to try to double down on this and say that they’ll do even more of it in the future.
“That’s what’s needed to restore some stability right now and get credibility back on track.”
He added: “We (Labour) wouldn’t make the same mistakes because this was a crisis made in Number 10 and 11 Downing Street, and it’s important that people understand this because the country’s had to do quite a lot of borrowing in recent years first to get through Covid.
“And the markets understood, because other countries had to do it. We had two schemes like furlough and help to businesses and so on.
“And then with energy prices that needed to be more borrowing to and again, markets understood that governments had to intervene to protect consumers.
Mr McFadden said: “The thing that really triggered the reaction we’ve seen in the UK in recent days was this unforced reckless act of last Friday, so that’s why we’ve called for Parliament to be recalled for this package to be paused and revisited.
“And when I see the Prime Minister out today, saying that she’s going to carry on and dig in and so on, I’m really asking myself the question: what is more important here? The chancellor and the Prime Minister saving face or saving the mortgages of millions of people?”
