Jacob Rees-Mogg has insisted pensions are not at risk and claimed the BBC is breaching its impartiality guidelines by suggesting the financial market turmoil is linked to the government’s mini-budget. After another turbulent morning for the markets, the business secretary was accused of “denying economic reality” by the Liberal Democrats, as he said there was no systemic problem and claimed the economy was in a “good state”.
Rees-Mogg also denied that his intervention in the electricity market to recoup more money off renewable and nuclear providers was a windfall tax, despite it being widely seen as such. He gave a round of broadcast interviews after the Bank of England governor ruled out more interventions to bail out pension funds after Friday but then appeared to reverse that position early on Wednesday morning. At the same time, new official figures showed the economy is believed to have contracted by 0.3% in August, raising fears of a recession. Speaking to BBC Radio 4’s Today programme, Rees-Mogg said global factors may have been to blame for the fall in pound and low investor confidence as much as the unfunded tax cuts in the mini-budget. Despite an immediate market reaction to Kwasi Kwarteng’s fiscal event in September, Rees-Mogg said: “You suggest something is causal which is a speculation. What has caused the effect in pension funds … is not necessarily the mini-budget. I think jumping to conclusions about causality is not meeting the BBC requirement for impartiality.” With another fiscal statement due on 31 October, the government is scrambling to come up with plans to make its billions of tax cuts affordable through spending cuts. Speaking to broadcasters, Rees-Mogg made the case that benefits should not necessarily rise in line with inflation, despite having been one of those in cabinet to argue in favour of uprating in line with prices rather than wages. He also said it was not affordable to give public sector workers such as nurses pay rises in line with inflation in case it caused a further inflationary spiral. The Lib Dems said Rees-Mogg’s “bluff and bluster will do nothing to reassure people worried about their mortgages, pensions and living standards”. “He’s admitted his own mortgage has gone up, but won’t take the action needed to help the millions terrified of losing their homes as interest payments go through the roof,” said Daisy Cooper, the deputy Lib Dem leader. “It shows Conservative ministers are refusing to take responsibility for their actions and are totally out of touch with struggling families and pensioners. It’s time this government U-turned once and for all on this out of touch and reckless mini-budget before it does any more damage.” Rachel Reeves, the shadow chancellor, said GDP figures showed the UK economy was still in a “dire state because of this Tory government”. “Mortgage costs are soaring leaving families worrying about making ends meet. Borrowing costs are up. Living standards down. And we are forecast to have the lowest growth in the G7 over the next two years,” she said. “That the IMF yesterday described the UK as ‘like a car with two people each trying to steer the car in a different direction’ leaves us an international laughing stock.”