The Chancellor can’t play games with the economy, especially at times of crisis

Chancellor of The Exchequer Kwasi Kwarteng leaves 11 Downing Street on September 23, 2022. PIC: Carl Court/Getty Images

The Government’s U-turn on the 45p tax rate cut should be a wake up call to the new Liz Truss led administration that you can’t play games with the economy, especially at times of crisis.

Kwasi Kwarteng’s about turn helped settle markets, which went into freefall not long after the Chancellor stepped back from the despatch box after delivering his mini-budget. But there is still a long way to go for this Government to win back trust on the economy.

The U-turn on the 45p tax rate won’t make much of a difference, representing around £2bn of the £45bn in tax cuts promised at the mini-budget. There is still a question of who pays for the rest of the tax cuts.

During his speech at Conservative Party Conference, Mr Kwarteng promised the Government’s approach would be backed by an “iron-clad commitment” to fiscal discipline.

If that is the case then why did the Prime Minister and her Chancellor cut the Office of Budget Responsibility (OBR) out of the equation before delivering the disastrous mini-budget that saw the pound crash and left families paying higher mortgages.

It was an announcement that forced the Bank of England into drastic action with a £65bn bond-buying programme. An expensive mistake for a Chancellor committed to fiscal discipline to make.

The credibility of the Liz Truss’ Government has been undermined before it has even got going. And this serves as a reminder that student politics don’t work in the real world, even if those attempting to execute them attended prestigious schools.

It also leaves a Chancellor who has been roundly humiliated and left a PM, who has pledged to take unpopular decisions, exposed.

The Chancellor can’t play games with the economy, especially at times of crisis - The Yorkshire Post says