Kwasi Kwarteng’s claims that he tried to get Liz Truss to slow down her financial plans have been challenged by her allies. In his first interview since he was sacked as chancellor by Truss, Kwarteng said he had told the then prime minister to be more cautious with their £45bn programme of tax cuts. The overhaul triggered economic turmoil, with government borrowing costs soaring, the pound plummeting to a 37-year low against the dollar and the Bank of England intervening to rescue £65bn worth of pension funds. However, in the interview with Rupert Murdoch’s TalkTV, Kwarteng said the administration could not be blamed by his and Truss’s successors for the “fiscal black hole”. “The only thing that they could possibly blame us for is the interest rates and interest rates have come down and the gilt rates have come down,” he said. “The black hole and structural problems are already there. I mean, it wasn’t that the national debt was created by Liz Truss’s 44 days in government.”
On Friday, an ally of Truss said it was not the case that Kwarteng was trying to act as a brake on her. “That wasn’t what was going on at all, although he was more cautious on the top rate,” they said. In broadcast interviews on Friday, the current chancellor, Jeremy Hunt, appeared to disagree with Kwarteng’s analysis. He said: “When we produced a fiscal statement that didn’t show how we were going to bring our debts down over the medium term, the markets reacted very badly and so we have learned that you can’t fund either spending or borrowing without showing how you are going to pay for it, and that is what I will do.” Hunt was speaking in broadcast interviews as official figures showed the UK gross domestic product, a broad measure of the size of country’s economy, contracted by 0.2% in the three months to September. “I am under no illusion that there is a tough road ahead – one which will require extremely difficult decisions to restore confidence and economic stability,” he said. “But to achieve long-term sustainable growth, we need to grip inflation, balance the books and get debt falling. There is no other way.” Hunt said he had sympathy with nurses after they voted for strike action, as inflation was “eating away at everyone’s earnings”. “Nurses are working incredibly hard, as is everyone on the NHS frontline. It’s an area that I know well and I have a great deal of sympathy for them,” he said. “And the reasons that they are feeling so frustrated is because inflation is more than 10%, and that is eating away at everyone’s earnings and making everyone worry about the cost of the weekly shop. “The best thing that I can do as chancellor is produce a plan that brings down inflation, brings down the upward pressure on interest rates, that also means that those nurses are having to pay more for their mortgages every month. “So what we need is to put that plan in place. It’s not going to be easy. There are going to be some very difficult choices. “I’ve used the word ‘eye-watering’ before, and that’s the truth. But we’re going to make those choices to give nurses, public sector workers, actually all families and businesses who are worrying at the moment, that certainty there’s a plan in place.”