Minister Darren Jones rejected claims that the UK is back in “Liz Truss” territory two days after Labour unveiled its historic Budget.
The new government wants to raise £40bn through tax hikes, which has left the markets a little unsteady.
The cost of government borrowing has gone up and the value of the pound has fallen.
The economic wobble has quickly drawn comparison to the complete chaos former Tory PM Liz Truss unleashed with her £45bn of unfunded tax cuts – but chief secretary to the Treasury Darren Jones just laughed off such comparisons.
LBC presenter Nick Ferrari put it to Jones that “the Budget’s unravelling” amid concerns about the markets’ response.
But Jones said no, laughing, adding: “It’s a normal thing for the markets to react to a Budget.”
Ferrari replied: “We now have the pound at the lowest level against the [US] dollar for two months.”
But the minister stood by his assessment from earlier this week, where he promised the UK would not return to “Liz Truss territory”.
He added: “We’re absolutely not in that territory!”
Ferrari replied: “No we’re not, but why have the markets taken the turn that they have?”
“Markets always respond to Budgets, Nick,” the minister said. “It’s right to say that this Budget takes the country down a different path.
“We’ve chosen to invest in our country, not to continue down the path of decline, but we’ve done so on the basis of strong fiscal rules.”
“How else would you interpret the headline, ‘Markets Take Fright’?” Ferrari asked.
Jones said he does not believe that is right, because Labour has “strong and robust fiscal rules in place”, pointing to the way day-to-day spending is covered by tax receipts not borrowing every month like the last government.
He also said the government would be in surplus by 2027, and debt is is falling “even though we are choosing to invest”.
“I think people will recognise that our diagnosis around the economy falling, public services not performing over the last decade was because of cuts,” the minister said.
So Ferrari asked Jones if he thinks the UK is therefore “bottoming out” and there will not be any further issues.
Jones replied: “It would be an unwise minister to give a running commentary on the Budget, but am I confident in the fiscal rules and the chancellor? Absolutely I am.”
Jones also told Sky News this morning that “I think we’ve all got PTSD from Liz Truss”, and that the two scenarios are “very different” because the former Tory government ignored the spending watchdog the Office for Budget Responsibility.