‘It’s extraordinary’: Liz Truss’s low-tax gamble has yet to convince Tory MPs
In the hyperbole-fuelled theatre of Westminster, where breathless rhetoric and implausible spin are so often the defining qualities, few events can truly be said to live up to a big billing. Yet when allies of the chancellor, Kwasi Kwarteng, promised a “game-changing” address in the run-up to Friday’s economic announcement, for once the performance matched the promise.
In fact, officials who had been billing the announcement as a mere “fiscal event” or “mini-budget” had been engaging in a rare piece of political understatement. What emerged was a package so large, bracingly expensive and unapologetically ideological that it looks certain to set the terms not just of the next election, but the country’s economic fortunes for years.
The surprise abolition of the top rate of tax – saving those earning more than £150,000 an average of £10,000 each a year – was merely the coup de grâce in a statement that pledged more than £400bn of extra borrowing over the coming years to fund the biggest giveaway in half a century, on top of the removal of the bankers’ bonus cap installed to tackle the City’s excesses. Promises of deregulation and the end of a fracking ban were mere footnotes in an economic pitch that was described as “shock and awe” by insiders.
Earlier in the week, those observing the prime minister as she flew home from the UN general assembly in New York had been taken aback by her ostentatious confidence in telling reporters: “Lower taxes lead to economic growth, there is no doubt in my mind about that.” Kwarteng was equally strident in that belief, even as the pound tanked to its lowest level against the dollar since 1985 following his announcement.
Among many Conservative MPs, however, confidence is the scarcest of
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