The Chancellor said the Government has a duty to look after vulnerable people.
04 October 2022
Kwasi Kwarteng has stressed his attachment to “compassionate conservatism” while refusing to comment on the row over raising benefits in line with inflation.
The Chancellor also told a Conservative Party conference fringe event that things were going “very well” since he took on the job, and suggested his party could win the next general election despite Labour’s massive lead in the polls.
Amid bitter infighting at the annual gathering, members of the Cabinet were publicly urging Prime Minister Liz Truss to raise benefits in line with inflation rather than the lower measure of wages.
In a possible hint of his opinion on the matter, Mr Kwarteng said: “Compassionate conservatism I thought was a good phrase and it’s something that I always think about in terms of policy and I think we do have a duty to look after very vulnerable people.”
He said his mother, a Methodist, had inspired him.
But asked whether he would support uprating benefits in line with inflation, he replied: “I’m not going to get drawn into a debate about what we’re going to do on benefits.”
The Chancellor complained that “nobody’s talking about the energy intervention”, which he said was “critical” because of the Government’s “obligation to help vulnerable people”.
He told the event, hosted by the free-market Institute of Economic Affairs and TaxPayers’ Alliance think tanks, that his U-turn on abolishing the 45p tax rate for the highest earners was the right decision, as it was “drowning out too much of what I think was a very strong package”.
Earlier, Mr Kwarteng said the Queen’s death added to the “high-pressure” environment around the preparation of the mini-budget last month.
The Government was plunged into crisis in the wake of his plan being announced in the House of Commons, as the pound plunged to historic lows and the Bank of England was eventually forced to intervene to calm the markets.
Mr Kwarteng, in an interview with GB News, said it was important to place the mini-budget in the “context” of the Queen’s death and funeral.
He spoke about the frenzied few days ahead of the mini-budget when asked if he would have done anything differently.
He said: “It was a very quick time that we did it. And you have got to remember the context.
“What was extraordinary about that month was that we had a new Government and also we had the sad passing of Her Majesty Queen Elizabeth II, so we had a nation in mourning and then literally four days I think after the funeral, we had the mini-budget.
“It was high-speed, high-pressure environment and we could, as (former prime minister) David Cameron used to say, have prepared the pitch a bit better.”
But Mr Kwarteng also sought to downplay concerns, suggesting that stability could return to the UK economy in the next few weeks.
He denied that the policies contained in the £45 billion tax-cutting budget were “extreme”, instead labelling it a “bold” package that has helped to “shift” political debate.
He said: “No-one is arguing we should put up corporation tax, no-one is arguing that we shouldn’t have reversed the national insurance increase.
“I think we have shifted the debate and I am hopeful that over the next few weeks things will stabilise.”
The Government had succeeded in getting “everyone to talk about growth”, he told the conference fringe event.
“Not everyone agrees with some of the elements of the plan but everyone’s talking about growth.”
Striking an optimistic tone, Mr Kwarteng said he was “very proud” of his mini-budget.
Asked how his job as Chancellor was going three weeks in, he told the packed room: “Very well.”
He said the Conservatives could win the next general election despite Labour’s 33-point lead in the polls if his plan to grow the economy works.
“Polls do go up and down,” he said, adding that “two years is an eternity” in politics.
“I never predict victory because that’s hubris”.