Kemi Badenoch, the leader of the Conservative Party, warned Andy Burnham, the Labour Prime Minister, to avoid the economic mistakes of Liz Truss, the former Prime Minister, in his first budget on Wednesday. She emphasized that high national debt, rising bond yields, and additional government spending paint a bleak picture of the UK economy.
Warning about the consequences of a small budget
Badenoch said at a press conference in London: "The lessons of a small budget are that if you cannot balance your budget and spend £150 billion subsidizing people's energy bills without cutting costs, the markets will react." She referred to Liz Truss's unsuccessful small budget in 2022, which led to a widespread sell-off of UK government bonds and a drop in the value of the pound.
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Liz Truss's responsibility and its consequences
Liz Truss, who experienced the shortest premiership in UK history at 49 days, announced on Tuesday that she will publish a new book detailing "what really happened" in the small budget of 2022. The book, titled "Bank Work: A Short Book on How the Bond Market Was Broken by the Bank of England and the Government's Collapse," will be released later this month. Truss placed the blame for the consequences of the small budget on the Treasury, the Bank of England, and the budgetary oversight body.
Badenoch also expressed doubts about ignoring the consequences of the Conservative budget during Burnham's time, saying: "They are the ones who want to repeat the mistakes of four years ago; we do not want to make that mistake again." She added: "We must live within our means. We need to stop borrowing excessively, but instead, workers are taking out more loans to pay the interest on their existing loans."
When asked why people should trust her judgment on economic competence, she, having served as International Trade Secretary in Truss's government, replied: "I am not Liz Truss, and I think people can tell the difference." She also stated that she only saw the small budget when it was presented and that collective responsibility does not mean agreeing with all decisions made.
Badenoch emphasized: "She must take responsibility for it in any way. This is her issue."
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