The Conservatives will never again put the economy at risk with unfunded tax cuts like those in Liz Truss’s mini-budget, the shadow chancellor has said, in the party’s clearest repudiation yet of the former prime minister.
In a speech on the economy, Mel Stride went beyond any comments made by the Tory leader, Kemi Badenoch, to accept that Truss’s September 2022 fiscal plans, which involved about £45bn in unfunded tax cuts and quickly unravelled, badly dented the party’s reputation.
“For a few weeks, we put at risk the very stability which Conservatives had always said must be carefully protected,” Stride said at an event in London on Thursday morning.
“The credibility of the UK’s economic framework was undermined by spending billions on subsidising energy bills, and tax cuts, with no proper plan for how this would be paid for. As a Conservative, of course I want taxes to be as low as possible. But that must be achieved responsibly through fiscal discipline.”
Stride admitted that while the Tories moved swiftly to limit the damage – the main tax cut was reversed in little more than a week, Kwasi Kwarteng was sacked as chancellor within three weeks, and Truss quit six days later – the party’s standing had taken a long-term hit.
“Back then mistakes were recognised and stability restored within weeks, with the full backing of our party,” he said. “But the damage to our credibility is not so easily undone. That will take time. And it also requires contrition. So let me be clear: never again will the Conservative party undermine fiscal credibility by making promises we cannot afford.”
Truss hit back, releasing a statement that called Stride “one of the Conservative MPs who kowtowed to the failed Treasury orthodoxy and was set on undermining my plan for growth from the moment I beat his chosen candidate for the party leadership [Rishi Sunak]”.
She added: “Until Mel Stride admits the economic failings of the last Conservative government, the British public will not trust the party with the reins of power again.”
Expressing a dim view of Truss’s record is not a particularly risky stance to take, with polling shortly before she resigned showing just 11% of voters thought she was doing a good job as prime minister. But previously Badenoch and her shadow team have avoided direct criticism of Truss.
When asked about Truss, Badenoch has generally said the party needs to move on from debates about her premiership, although in January it emerged that she had told her shadow cabinet “it would be best if Liz would shut up for a while”.
The bulk of Stride’s speech covered his thoughts on “rewiring” the UK economy through areas such as welfare reform and speeding up planning and infrastructure projects, although he gave no new policy details.
In praising Badenoch, Stride also urged people to have patience with her leadership, implicitly acknowledging that she has not always been the best performer in the Commons or on the media, likening this to Margaret Thatcher’s early struggles. “She will get better through time at the media,” he said. “She will get better through time at the dispatch box at PMQs.”
