Kwasi Kwarteng’s mini-budget will prove “politically toxic and financially questionable”, Conservative MPs have said as they rejected the extra £72bn. in loans needed to pay for floating tax cuts that will disproportionately benefit the very wealthy.
The division 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 a senior party figure to the ill-fated “Barber Budget” of 1972, which emulated a similar goal but ended in booms, rising inflation and ultimately the demise of Ted Heath’s premiership.
“I have never known a government that has had so little support from its own backbenchers, just four days into the session,” remarked one MP.
The normally boisterous backbenches, roaring behind a chancellor as they deliver a fiscal statement to the Commons, were quieter on Friday. Several attendees said few order papers were waved and there was only a smattering of “hear, hear” comments, allegedly orchestrated by party whips.
“I am completely distraught, because I am a member of a party that stands up for the oppressed middle class, not the very rich. This will be politically toxic and economically questionable,” said another MP present for the statement.
As a sign of the level of dissatisfaction are several Conservatives rose in the Commons chamber to target barbs and hostile interventions against Kwarteng. Mel Stride, the chairman of the Treasury committee and former campaign manager for Rishi Sunak’s leadership, said there was a “huge void” in the mini-budget.
Stride criticized the Treasury Department’s refusal to release new economic forecasts from the Office for Budget Responsibility based on the measures unveiled this week, saying markets were getting “jittery” and “now is the time for transparency” to ” give a rest”.
As sterling fell further against the dollar, former attorney general Jeremy Wright said growth depended on confidence and would “disappear” if the benefits of tax cuts were offset by rising mortgage payments due to higher interest rates.
Others were gloomy about how the abolition of the top tax rate and the lifting of the cap on bankers’ bonuses would play in poorer constituencies, especially among the so-called red wall. “It is the richest we help, while the poorest suffer the most,” was the stark assessment of a northern member of parliament.
Liz Truss’ reckless reshuffle, which alienated most Sunak supporters, also hung like a dark cloud over the statement.
“Everyone is dismayed by the reshuffle and the way it has been handled,” said one person who was recently removed from the government. “Looking forward, you’re going to have a situation where unless some goodwill is extended, people are going to look for a reason to put down a marker to make their unhappiness clear.”
Sunak’s supporters said they were more likely to boycott the Conservative party conference and brood over WhatsApp with other frustrated colleagues during the following few weeks of recess.
Roger Gale, a veteran thorn in the side of Boris Johnson’s administration, said: “Fortune favors the brave but not the foolhardy,” adding that Kwarteng’s “not-so-mini-budget is certainly brave but also sees very high risk out. “.
However, some Tories were willing to give what they called Truss’s “gambling” a chance. “This is certainly driven by ideology, and politics is supposed to be – to some extent – about ideology,” said one. “She clearly has the view that she’s not winning from the middle, but a clear distinct position.”
Ardent Truss backers said it would force Labor into the difficult position of having to oppose the tax cuts and face uncomfortable questions about whether it would then reverse them. They also said it would strengthen support for the right among voters who previously floated to support Ukip. Nigel Farage proclaimed that it had been “the best Conservative budget since 1986”.
David Jones, a former minister who backed Truss for leadership, said: “Tax cuts were very necessary because we were overtaxed in the past. Kwarteng has clearly marked a clear break with the Rishi regime and I personally think he had not option but to do so. If it had been stable the way she is going, according to the OECD, we would have had zero growth next year.”
Opposition parties tried to paint the mini-budget as a giveaway to the ultra-rich that would provide little support for those at the sharp end of the cost of living crisis.
Rachel Reeves, the shadow chancellor, attacked Kwarteng’s “casino economy”, which she said was “gambling the mortgages and finances of every family in the country”.
Ed Davey, the leader of the Liberal Democrats, called it a “billionaire budget” that had shown the Conservatives were “completely out of touch with families struggling to pay the bills”.