Liz Truss has had a historically bad start to her new job, and we’re all paying the price. To appreciate the full scale of what went wrong, I think it’s useful to provide a quick recap.
The Friday before last, Kwasi Kwarteng stepped up to the Despatch Box to deliver a ‘mini-budget’, which would set out Liz Truss’ economic policies to tackle the cost-of-living crisis. I know that many people across Tameside would have tuned in hoping to see the Government take action to provide families with the support they need, to tackle stagnant wages and to build a resilient and forward-thinking economy.
What they did was the exact opposite. The Chancellor announced enormous, unfunded tac cuts to those who earn millions and the very richest companies. He lifted the cap on banker’s bonuses and did away with the top rate of income tax.
The reaction of the markets was almost instant, the value of the pound dived, and instead of changing course, Truss ploughed on. The following week, the Bank of England had to spend £65bn to prevent pension funds from going bust. Mortgage lenders pulled offers and increased interest rates, and trust in the Tory Government plummeted to historic lows.
Yesterday morning, the Government performed a screeching U-turn. It declared that it wouldn’t scrap the top rate of tax (but stayed noticeably quiet on banker’s bonuses). Unfortunately, by the time the U-turn came, the damage to the UK economy had been done. Millions of people – already struggling with the cost-of-living crisis – will see higher mortgages and higher prices for years.
Let’s be clear. This shambles was no accident. The Government wilfully ignored expert advice. When the Office for Budget Responsibility came to the Chancellor before the mini-budget, and offered to carry out an independent assessment as is typical, he refused. The people of Tameside are now paying the price for incompetence, ideological arrogance, and downright neglect.
Politics isn’t a game. The British public are not test subjects in a bizarre Tory economic experiment. When a Chancellor stands up in Parliament, they have lives, livelihoods, and security in their hands. It is an extraordinary responsibility, and one that the Tories just don’t understand.
Enough is enough. The Tories are the party of economic irresponsibility and instability. Labour are the only party which will provide responsible finances, strong fiscal rules and fair, long-term growth for the people of Tameside.