Divisions of leadership contest return to the fore as some MPs criticise extra borrowing to pay for tax cuts
Kwasi Kwarteng’s mini-budget will prove “politically toxic and economically dubious”, Conservative MPs have said as they lambasted the extra £72bn of borrowing needed to pay for swingeing tax cuts that will disproportionately benefit the very wealthy.
The divisions of the Tory leadership campaign roared back to the fore after Kwarteng’s statement, with critics claiming the chancellor was trying to avoid scrutiny by refusing to publish economic forecasts from the independent budget regulator. Kwarteng’s “plan for growth” was also compared by one senior party figure to the ill-fated “Barber budget” of 1972, which emulated a similar aim but ended in boom, soaring inflation and ultimately the demise of Ted Heath’s premiership. “I’ve never known a government that has had so little support from its own backbenches, just four sitting days in,” observed one MP. The normally ebullient benches that roar behind a chancellor as they make a fiscal statement to the Commons were more hushed on Friday. Several present said few order papers were waved and there was only a smattering of comments of “hear, hear”, allegedly orchestrated by party whips. “I completely despair, because I’m a member of a party that stands up for the squeezed middle not the very rich. This will be politically toxic and economically dubious,” said another MP present for the statement.rose in the Commons chamber to aim barbed and hostile interventions at Kwarteng. Mel Stride, the chair of the Treasury select committee and former campaign manager for Rishi Sunak’s leadership bid, said there was a “vast void” in the mini-budget. Stride criticised the Treasury’s refusal to publish fresh economic forecasts from the Office for Budget Responsibility based on the measures unveiled this week, saying the markets were getting “twitchy” and “now is the time for transparency” to “provide a calmness”.against the dollar, the former attorney general Jeremy Wright said growth depended on confidence, and that would “evaporate” if the benefits of tax cuts were outweighed by mortgage repayments rising due to higher interest rates. Others were gloomy about how the abolition of the highest tax rate and lifting the cap on bankers’ bonuses would play in poorer constituencies, particularly among the so-called red wall. “It’s the richest we’re helping while the poorest are suffering the most,” was one northern MP’s stark assessment. Liz Truss’s ruthless reshuffle which ousted most Sunak supporters also hung like a dark cloud over the statement. “Everybody is distraught at the reshuffle and the way it’s been handled,” said one person recently ousted from the government. “Looking ahead, you’re going to have a situation where, unless some goodwill is extended, people will look for a cause to lay a marker down to make clear their unhappiness.” Sunak’s supporters said they were more likely to boycott the Conservative party conference and ruminate over WhatsApp with other frustrated colleagues over the following few weeks of recess. Roger Gale, a veteran thorn in the side of Boris Johnson’s administration, said: “Fortune favours the brave, but not the foolhardy,” and added that Kwarteng’s “not-so-mini-budget is certainly brave but also looks very high risk indeed”.Archie Bland and Nimo Omer take you through the top stories and what they mean, free every weekday morningNewsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our
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