Rachel Reeves’ deputy sought to reassure the markets that Labour’s £32 billion borrowing in the Budget was not excessive, stressing: “We have all got PTSD from Liz Truss”.Darren Jones, Chief Secretary to the Treasury, emphasised that on borrowing the Government does not “think that we are pushing it to the limit”.
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00:00Well, look, as I say, the markets will always
00:01respond to a budget.
00:02And there's been a change in an approach to the economy here.
00:06Under the Conservatives, you had 14 years of cuts
00:08to investment on public investment,
00:10as well as cuts to private sector investment
00:12for a whole host of other reasons.
00:14This budget chose to invest in our country,
00:15as opposed to continue down the path of decline.
00:18And markets respond to that, because that
00:20means that we will be borrowing money
00:22to pay for things like schools and hospitals and transport
00:25infrastructure.
00:26But importantly, because of that tough investment rule,
00:28making sure that investment as a size of the economy
00:31is managed and is under control and falls
00:33as a size of the economy over the years ahead.
00:35Again, come back to it one more time.
00:38Are you watching it closely?
00:39If it continues to rise, if it did get more disorderly,
00:43would that be a very clear sign that the markets are telling
00:46you, in fact, this borrowing is a little bit too much?
00:49I think we've all got PTSD from Liz Truss.
00:52And just let's compare the two different scenarios,
00:54because they're very, very different.
00:56So under Liz Truss, as we saw, they
00:58sacked the Permanent Secretary, they
01:00ignored the Independent Office of Budget Responsibility,
01:03they announced £45 billion of unfunded tax cuts
01:05and said they're only just getting started.
01:07And then the market went mad.
01:08And we all know what happened then.
01:10Completely different in contrast to now.
01:12We've got verified reports from the Independent Office
01:14for Budget Responsibility that say
01:16we meet our fiscal rules earlier than had been planned
01:18originally, 2027, 2028.
01:21Those tough fiscal rules means there
01:22is a fiscal consolidation and a strong approach
01:25to public spending.
01:26We're in a very, very different world.
01:28But I understand why you asked the question,
01:30because everybody suffered as a consequence of the way
01:32the Conservatives managed the economy.
01:34I agree.
01:34In 2022, it was disorderly.
01:37This has been orderly, but it's nonetheless
01:39pushing up borrowing costs.