LONDON — Kemi Badenoch warned Labour Prime Minister Andy Burnham on Tuesday not to repeat the economic mistakes of her former boss Liz Truss in his first budget next Wednesday.
The Tory leader said higher national debt, increased gilt yields and extra government spending are creating a gloomy economic picture — and demanded sharp spending cuts from the ruling Labour government next week.
“The lessons of the mini-budget are: if you don’t balance your budget, if you give away £150 billion in subsidizing people’s energy bills, but you don’t cut spending, then the markets will react,” Badenoch said, citing former Tory leader Truss’ ill-fated mini-budget in 2022, which triggered a sharp sell-off in U.K. government bonds and saw the value of the British pound fall.
Truss — Britain’s shortest-serving prime minister, who spent just 49 days in Downing Street — announced Tuesday she is publishing a new book setting out “what really happened” during the mini-budget in 2022, according to a press notice issued by her spokesperson.
“Bank Job: A short book on how the Bank of England broke the bond market and brought down the government” will be published later this month.
The ex-PM has blamed the mini-budget’s consequences on the Treasury, the Bank of England and the Office for Budget Responsibility watchdog.
Badenoch told a press conference in London she does not believe Labour is paying attention to the consequences of that Conservative budget by failing to reduce spending: “They are the ones who want to repeat the mistakes of four years ago, we are not going to be making that mistake again.”
“We need to live within our means,” she said. “We have to stop borrowing so much, but instead, Labour are taking out more loans to pay the interest on our existing loans.”
Questioned on why the public should trust her judgement on economic competence, Badenoch, who served as Truss’ international trade secretary, told POLITICO: “I am not Liz Truss and I think that the public can tell the difference.”
Badenoch said she only saw the mini-budget when it was presented and collective responsibility “doesn’t mean that you agree with all of the decisions that are made.”
“She needs to take responsibility for it, one way or another,” Badenoch said. “That is her issue.”