In a final blow to so-called Trussonomics, the chancellor, Jeremy Hunt, has announced he is reversing almost all the tax measures in his predecessor’s mini-budget. In less than four weeks, it damaged the UK’s reputation across the world, caused untold carnage on the financial markets and left the prime minister clinging on by her fingertips. Although many warned the budget was doomed from the start, there were also plenty of cheerleaders who greeted it with breathless enthusiasm in late September. Here is a reminder of the greatest champions of Liz Truss and her former chancellor Kwasi Kwarteng’s economic project. ‘At last! A true Tory budget’ – the Daily Mail
The Mail trumpeted its enthusiasm for Kwarteng’s mini-budget across two front pages. The first headline, on the morning of the announcement on 23 September, heralded the “biggest tax cuts in 30 years!” – which the paper predicted would “turbo-charge growth” rather than precede a sterling crash. The following day, the Mail front page said: “At last! A true Tory budget.” The newspaper’s City editor, Alex Brummer, wrote: “The boldness and courage of Kwasi Kwarteng’s debut budget is seismic,” and erroneously predicted it would result in “lifting confidence and sparking a surge in consumption and investment”. ‘The best budget I have ever heard a British chancellor deliver’ – Allister Heath, editor, Sunday Telegraph Heath declared Kwarteng’s ill-fated mini-budget to be the greatest in his lifetime “by a massive margin”. “The tax cuts were so huge and bold, the language so extraordinary, that at times, listening to Kwasi Kwarteng, I had to pinch myself to make sure I wasn’t dreaming, that I hadn’t been transported to a distant land that actually believed in the economics of Milton Friedman and FA Hayek.” Heralding the end of “the neo-Brownite consensus of the past 20 years, the egalitarian redistributionist obsession, the technocratic centrism, the genuflections at the altar of a bogus class war, the spreadsheet-wielding socialists”, Heath predicted there would be “a new big bang in the City” and “dozens of new Canary Wharfs on steroids”, with money and jobs flowing in from the eurozone to follow. ‘Trussonomics is already slaying the demons of stagflation’ – economist Patrick Minford
Minford, Margaret Thatcher’s former economic adviser who Truss praised as the inspiration for the package, wrote a defence of Truss and Kwarteng’s economic plan, arguing it had already resulted in stable inflation, moderate interest rates and higher growth. He said detractors’ “gloating has not been a pretty sight” and diagnosed the main problem as being that Truss and Kwarteng “could have banged the drum harder” in defence of their budget. He said “Truss must, like [Margaret Thatcher], be the ‘lady not for turning’” on her economic project, and has stuck to his guns on this assertion, telling the Express that civil servants were “trying to undermine the government’s policy”. ‘Mini-budget WILL boost growth and everyone will benefit’ – economist Gerard Lyons Although he has taken a more circumspect tone in recent weeks – suggesting in the Financial Times that Kwarteng should have been clearer on the details of his economic plan – Lyons was initially a key cheerleader for what he described as Truss’s “pro-growth economic strategy”. He wrote in the Daily Express on 25 September: “While all governments want higher growth, few take the actions needed to achieve this. Truss is different.” In a similar vein to Minford, he suggested the only problem was the “misplaced criticism [that Kwarteng and Truss] are gambling with the public finances” from commentators, the International Monetary Fund and the markets, insisting that the mini-budget would “boost growth” and “everyone will benefit”. ‘This isn’t a trickle-down budget, it’s a boost-up budget’ – Mark Littlewood, the Institute of Economic Affairs Littlewood, the director general of the free market thinktank the IEA, said he was looking forward to the “maxi” budget that would follow the mini-budget. “It’s refreshing to hear a chancellor talk passionately about the importance of economic growth and supply-side reforms, rather than rattling off a string of state spending pledges and higher taxes,” he said on the day of the statement last month. “Only by bearing down on the amount of tax the state collects across the income spectrum, and reducing the regulatory burden, can we create better conditions for growth.” Not so, it would seem. Instead, the government is reverse ferreting at full speed.