The chancellor Rachel Reeves is under pressure to cancel a controversial trip to China as the UK economy faces another tumultuous day on the markets.
Shadow home secretary Chris Philp blamed Labour for the soaring cost of government borrowing and said she “should stay in the UK fixing the mess her Budget has created”.
Liberal Democrat leader Ed Davey hit out at the Tories’ handling of the economy but also said Ms Reeves should cancel her visit and instead make an emergency announcement scrapping her national insurance hike, which his party has dubbed a ‘jobs tax’, and rebuild trade links with Europe.
On Thursday the pound tumbled to its lowest level against the US dollar for over a year as borrowing costs continued to surge, heaping more pressure on the government’s economic and spending plans.
Chancellor Rachel Reeves is scheduled to visit China this week (Peter Byrne/PA) (PA Wire)
Treasury minister Darren Jones told MPs that UK gilt markets were continuing to “function in an orderly way” and there was no need for any kind of emergency intervention.
But he faced jeers from opposition MPs who demanded to know where Ms Reeves was, with shadow chancellor Mel Stride hitting out that she was “nowhere to be seen” and one Tory accusing her of already having “fled” to China.
Ms Reeves is due to jet off with a delegation of City grandees as Labour seeks closer links with Beijing as part of its bid for economic growth.
Mr Philp, who served in the Treasury under former Tory MP Liz Truss, also suggested the Chancellor should be fired.
“Bond yields are higher than when Kwasi Kwarteng got sacked,” he said. “The whole government should be fired, frankly, including Rachel Reeves, because they jacked up taxes, they crushed pensioners, they’re crushing farmers. They’re crushing businesses with their high taxes. And this is the result, because the bond market can see that our economy is being squashed by this Labour government.”
Sir Ed said that instead of jetting off to China, the chancellor should “urgently” tell MPs she will “cancel her counterproductive jobs tax and set out a real plan for growth”.
But he also hit out at the Tory party for the turmoil saying the country was paying an “ever-higher price for the total mess the Conservative Party made of our economy”.
But he added: “The chancellor needs to realise that she’ll never dig us out of this hole without a far more ambitious plan to grow our economy, including rebuilding trade with Europe.”
Responding to an urgent question in the Commons Mr Jones said UK gilt markets “continue to function in an orderly way”.
He told MPs: “There should be no doubt of the Government’s commitment to economic stability and sound public finances; this is why meeting the fiscal rules is non-negotiable.”
He also went on to accuse the Conservatives of having “crashed the economy” when in power.He also defended the China trip sayihg it was “important” for UK trade and would continue.