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Britannia unhinged

Britannia unhinged

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What happened in the 17 days between Kwasi Kwarteng becoming chancellor, sacking the Treasury’s top civil servant and his fiscal event which crashed the British economy?

Why this story?

When Liz Truss arrived in Number 10 in early September she promised to usher in a new era. Exactly what that meant became clearer when her chancellor, Kwasi Kwarteng, delivered a fiscal statement to the commons on 23 September. In the wake of the statement sterling slumped against the dollar, the cost of borrowing soared and some pension funds came close to going bust. Although the statement was billed as a mini-budget it turned out to be one of the biggest fiscal events in recent history. And by any measure it’s gone down badly. The PM’s poll ratings, which were never that high in the first place, have nosedived. The government was forced into an embarrassing u-turn over the proposal to cut the top rate of tax for people earning over £150,000 and there are now audible mutterings among some Conservative MPs wondering how long this PM and her chancellor can last. One of the first things Kwasi Kwarteng did when he entered the Treasury was to sack the department’s top civil servant, Sir Tom Scholar. What we’ve tried to piece together is what happened in those 17 days from the moment Kwasi Kwarteng arrived at the Treasury to the moment he got to his feet in the House of Commons. Jasper Corbett, Editor

Transcript

“I now call the Chancellor of the Exchequer to make a statement…

Lindsay Hoyle, Speaker of the House

“Thank you, thank you. Thank you Mr Speaker. Mr Speaker let me start directly…”  

Kwasi Kwarteng

James Harding, narrating: We all know what happens next. In the days that followed Kwasi Kwarteng’s mini-budget on 23 September, the bottom fell out of the UK market.

Well. As we’ve been hearing, the financial markets have reacted badly to the Chancellor’s announcement with the pound falling to a fresh 37-year low against the dollar… ”

BBC News

James Harding, narrating: Sterling slumped. Investors dumped British bonds. The cost of borrowing multiplied. Pension funds came within hours of going bust. And the Bank of England promised £65 billion to calm things down. 

The IMF’s message to London was, in short it was this: WTF, kiss kiss, the IMF. 

Conservative poll ratings fell to some of their lowest in living memory… 

Clip, James O’Brien, LBC: I mean that, that these are not normal numbers this is a lead the like of which the Labour party has never seen before. And it’s sort of come from nowhere. 

James Harding, narrating: Tory MPs started submitting letters of no confidence in Liz Truss, PM for just three weeks. And the Party conference in Birmingham was a humiliation.

“… And now the lady not for turning has announced a massive u-turn on a policy. This is surely the worst start of any prime minister?

Beth Rigby, Sky News

James Harding, narrating: It’s not over. Interest rates are set to rise; people will pay for these mistakes in their mortgages. 

Paul Krugman, the nobel-prize winning economist, described this as “the moron risk premium”. Martin Wolf, the FT columnist and the most respected economics commentator in the country, wrote: “These people are mad, bad and dangerous. They need to go.” 

Now, the housing market is preparing to fall. Economic growth will be hit. The government needs to make a run of cuts to public spending. 

It seems like the only people having a good time are comics and social media meme-makers… 

“New prime minister Liz Truss who announced that she was gonna get Britain back on track. She just didn’t mention which way the track would be going…

Trevor Noah, The Daily Show

James Harding, narrating: We all know what happened after the Chancellor spoke. But what happened in those 17 days from the moment Kwasi Kwarteng arrived at the Treasury to the moment he got to his feet in the House of Commons? How did the new Prime Minister and her Chancellor produce what even their friends call the “Trussterfuck” budget? 

While the daily papers and evening bulletins have been full of the mayhem in the markets, a trio of us at Tortoise – Sebastian Hervas-Jones, Claudia Williams and me, James Harding – have been calling around. Calling Government ministers, Downing Street advisers, Treasury officials and Bank of England employees – past and present – to try and piece together the fortnight before the fiasco. 

What happened behind closed doors in those first couple of weeks in Downing Street to leave people now wondering how many days Liz Truss has left in office? How did they come to make such catastrophic decisions on the national debt that has left the Prime Minister and her Chancellor on borrowed time. 

In this week’s Slow Newscast… Britannia Unhinged: Kwasi Kwarteng’s take over of the Treasury.

***

James Harding, narrating: Tuesday 6th September was an historic day for two reasons. At Balmoral, Queen Elizabeth II was conducting her last public act as monarch, bidding farewell to Boris Johnson… 

Good morning, good morning… hello prime minister… 

Boris Johnson arriving at Balmoral

James Harding, narrating: … and ushering in Liz Truss, her 15th prime minister. 

“Good afternoon. I have just accepted Her Majesty the Queen’s kind invitation to form a new government. Let me pay tribute to my predecessor…” 

Liz Truss speaking outside Downing Street after becoming PM

James Harding, narrating: Two hours later, at 7:07pm, a tweet went out from Downing St confirming what everyone knew was coming. Kwasi Kwarteng was appointed Chancellor: hashtag reshuffle. As she’d promised, Liz Truss had hit the ground running.

Kwarteng was taken first to the Chancellor’s study in No.11 Downing Street for the standard security briefing that is the first appointment of every new Chancellor. And he was then whisked across the road to the Treasury, where he immediately instigated his own changing of the guard: Sir Tom Scholar, the most senior civil servant in the Treasury, was removed from his post that day.

This was a pointedly savage sacking. Civil servants – when they’re moved or removed – typically see out a carefully-managed transition. None of that usual kindness was extended to Tom Scholar. He was out with immediate effect. 

And he was not alone. Sir Stephen Lovegrove, the Prime Minister’s national security adviser, was summarily fired too. 

There are three senior civil servants in the British government: the Cabinet Secretary, the Permanent Secretary at the Treasury and the National Security Adviser. As one former senior Government official put it to us, rather archly: 

“She has sacked two of them and left the wrong one – the Cabinet Secretary Simon Case – in place.”

Quote voiced by an actor

James Harding, narrating: Other Downing Street officials who had closely served Boris Johnson were told to clear their desks immediately. Truss, they were told, did not want to see them in the building. 

Of course, the PM had not won a landslide election; she had the backing of the majority of Conservative party members – not even the majority of Conservative MPs – but she swept in as if she had a mandate for radical change. The Old Guard, all of whom she’d served with during 10 years in Government, were out. 

But to Treasury officials, it was much more than that. It was a signal: Tom Scholar’s head was on a spike. But, for the time being – on that evening of September 6th – only a handful of people knew it had been chopped off. The news that he’d been removed in such an abrupt way – which “sent shock waves through the Treasury” says one former minister – wouldn’t come out until nearly 48 hours later. 

It was Thursday, 8th September. The Government was just beginning to roll out its plan to cap energy bills. But then came that commotion in the Commons… 

“I wish to say something about the announcement which has just been made about Her Majesty. I know I speak on behalf of the entire house when I say that we send our best wishes to Her Majesty the Queen and that she and the Royal Family are in our thoughts at this moment. If there’s anything else we will update the house accordingly.” 

Speaker of the House, Lindsay Hoyle

James Harding, narrating: That was just after half past twelve. In the febrile hours that followed, Tom Scholar sent a message to some of his close colleagues. At 4.30 that afternoon he wrote to say that the Chancellor was looking for new leadership and he was leaving the Treasury with immediate effect. 

With the benefit of hindsight, one of those colleagues thinks Tom Scholar was keen to get the news out because – like the rest of us – he had a strong sense of what was coming, and he knew that the guidelines governing Whitehall would soon stop any sensitive announcements being made…

“A few moments ago Buckingham Palace announced the death of her majesty Queen Elizabeth II.

BBC News

James Harding, narrating: …and he knew that the guidelines governing Whitehall would soon stop any sensitive announcements being made

The Palace has just issued this statement, it says: The Queen died peacefully at Balmoral this afternoon. The king and the queen consort will remain at Balmoral this evening and will return to London tomorrow.

BBC News

James Harding, narrating: It was half past six. By this point, one Treasury official told us, he was “punch drunk” on the day’s news.

+

James Harding, narrating: There were signs that something like the sacking of Tom Scholar was coming. During the long Tory leadership campaign a new enemy emerged. It was no longer recalcitrant remainers or metropolitan elites… the enemy was right in the heart of Whitehall. 

“This whole language john of unfunded tax cuts implies the static model the so-called abacus economics that the treasury orthodoxy has promoted for years but it hasn’t worked for our economy because what we’ve ended up with is high tax high spending and low growth and that is not a sustainable model for Britain’s future.”

Liz Truss

James Harding, narrating: “What the hell is the Treasury orthodoxy?” one official asks, with real passion. It was never spelled out. But if it could take human form, to Liz Truss at least, it would probably look a lot like Tom Scholar. 

His sacking was a signal that Truss didn’t want to hear what the Treasury had to say. 

“The common thread is arrogance…” 

Quote voiced by an actor

James Harding, narrating: … says one former Treasury official, who draws a line from the sacking of Tom Scholar on Day One to the blow up in the markets on the day of the mini-budget. 

“All the people in charge or advising are people who have been on the fringes of Conservative thinking for a decade – the Institute for Economic Affairs, the Britannia Unchained lot and the Taxpayer Alliance – people who disdain the experts.

Quote voiced by an actor

James Harding, narrating: It was quite a moment to ignore expertise and fight consensus. Because, as more than one person has pointed out to us, we didn’t need to rely on the markets to tell us what was staring us in the face. Urged on by all those fringe voices, what Liz Truss and Kwasi Kwarteng were embarking on was the most radical rethink of British economic policy in decades. And they were doing it – relatively speaking – on their own.

+

James Harding, narrating: The new prime minister and chancellor had long seen Sir Tom Scholar as the epitome of the deep state, a one-man roadblock to change. He had all the attributes. He was the son of a venerated civil servant and he rose through the ranks in Gordon Brown’s Treasury. He’d spent years at the International Monetary Fund drinking from the well of balanced budget orthodoxy. He’d delivered austerity as Permanent Secretary to George Osborne. 

As another former Government official explained: Truss and Kwarteng “think of themselves as genuine radicals who believe that what these people – [i.e. the Treasury] needs is a thoroughly good kicking.” 

But eyes rolled at the way they went about things. One senior official told us the sacking of Tom Scholar was “childlike”. It was: “Aren’t I big and tough, without thinking through the consequences.”

“With Tom Scholar it was also personal,” someone else told us. Liz Truss, he says, had felt shut out of key discussions by Tom Scholar when she worked under Philip Hammond as Chancellor in Theresa May’s government. And, interestingly, that wasn’t paranoia. The fact is that back in 2016-17 she was actively shut out of key meetings in the run up to the Budget and critical Treasury decisions.

But Tom Scholar wasn’t to blame. 

According to another former Treasury official, it was Philip Hammond who didn’t want Truss in the meetings. He suspected she leaked. (An official from the Theresa May government said the PM always felt that Gavin Williamson, Michael Gove and Liz Truss were the leakiest members of the cabinet.)

And so, in order to keep Liz Truss out of the Budget deliberations, Philip Hammond ruled that no junior ministers could attend. Tom Scholar was tasked with relaying this decision to the then Chief Secretary; years later, Liz Truss shot the messenger.

Kwasi Kwarteng had served as Philip Hammond’s PPS at the time – a very junior position – and knew well that Liz Truss disliked Tom Scholar. Personally and ideologically, he was also eager to have him out. 

Kwarteng’s friends like to say that he and Truss had precedents: Gordon Brown and Ed Balls had pushed out Terry Burns; Margaret Thatcher had ousted Douglas Wass, the Tom Scholar of his day, who she saw as an obstructive Keynesian, when she wanted to lower taxes and deregulate for growth.

But as with so much of the Thatcher myth, this is ideologically true but historically inaccurate. Mrs T didn’t sweep in and sack the top Treasury official, she gradually eased him out years after she got into Number 10.

***

James Harding, narrating: The decapitation of the Treasury civil service left the most powerful department in government headless. Even before it happened, some people on the inside were worried that it was getting thin at the top – and you can see why. 

Charles Roxburgh, the other permanent secretary at the Treasury and the top official most plugged into the markets, had left at the start of the summer. Katharine Braddick, widely seen as the number three, had left at the beginning of the year for a job at Barclays. 

“An awful lot of good people have gone,” said one former Treasury official. “And the people who are left are yes men… the willing courtier.” 

The lack of the people as well as a plan to deliver the new agenda troubled officials who were left inside. 

“If you want bold, radical change,” one of them told us, “you need an organisation which can deliver it, functionally.” 

And that didn’t seem to be in place. In fact, there were no experienced Special Advisers – either to sense-check the politics or the economics of the Chancellor’s decisions. George Osborne had had Rupert Harrison; Rishi Sunak had Liam Booth-Smith. Kwasi Kwarteng didn’t have any trusted or respected figure at his side. 

“I speak to you today with feelings of profound sorrow. Throughout her life, her majesty the queen, my beloved mother, was an inspiration and example to me and to all my family…

King Charles

James Harding, narrating: For the 11 days that followed the death of the Queen, the government disappeared behind the shadow cast by the Palace. 

“Hello and good morning from Westminster where her majesty the queen is lying in state all through the night thousands of people have been queuing for hours to file past the coffin and pay their respects…”

BBC News

James Harding, narrating: Nick Macpherson, the former Permanent Secretary to the Treasury, had taken the unusual step of tweeting out his disapproval of Kwasi Kwarteng’s sacking of Tom Scholar on Thursday afternoon, just before the Queen’s death was announced…

“Tom Scholar is the best civil servant of his generation. Sacking him makes no sense. His experience would have been invaluable in the coming months as government policy places massive upward pressure on the cost of funding. As Gordon Brown used to say “they’re not thinking…”

Quote voiced by an actor

James Harding, narrating: … but the message was largely lost. 

Kwasi Kwarteng, who’d originally planned to announce his emergency budget on 19 September, saw that date bumped by the Queen’s funeral. It was rescheduled for Friday 23 September. 

The Queen’s death cast a blanket of quiet over Westminster. Political coverage disappeared; the Labour party took a vow of silence; and the Chancellor was free to put in place his plans, largely unchecked by senior Treasury officials, and unbothered by the usual speculation from the press, the opposition or lobbyists. 

Here’s Lord Robin Butler, who served three prime ministers as cabinet secretary, speaking on the BBC’s World This Weekend about the sacking of Scholar… 

“Very unusual, and very regrettable for all sorts of reasons… well, if there was ever a time that one needed experience and continuity, which is what the civil service, our system, provides, it’s now. We have a new sovereign, we have a new prime minister, and we really need the cement that can hold this system together.” 

Lord Robin Butler, BBC’s World This Weekend

James Harding, narrating: If Tom Scholar’s sacking had removed the only credible individual to challenge their plans, the decision that Liz Truss and Kwasi Kwarteng took next removed the only institutional check on their calculations. 

Richard Hughes, the chairman of the Office for Budget Responsibility – the OBR, which independently scores the Chancellor’s claims of growth, spending and revenues – had written to Parliament at the end of July. He wrote to say that, knowing a new Prime Minister and Chancellor were likely to want to announce some kind of Budget in September, that they, the OBR, were ready to produce a meaningful analysis of the numbers. 

While the Queen was lying in State, the OBR was informed that it wasn’t needed. 

In the early days of Kwasi Kwarteng’s time in Number 11 Downing Street, a Treasury official told us, it became common knowledge that the Chancellor didn’t think it necessary to score this “fiscal event”; it wasn’t a full Budget, it was billed as a ‘mini-Budget’; and at the time, he was aiming to get the scores in next Spring. 

According to one official…

“[Truss and Kwarteng] wanted to have more time to persuade the OBR that their policies were going to have a big impact on growth. They won’t persuade them… Kwasi Kwarteng is the most intellectually arrogant person you’ve ever met.”

Quote voiced by an actor

James Harding, narrating: The decision to sideline the OBR was the Chancellor’s. 

One former Downing Street official says: “The OBR gave the Treasury a forecast, but they ignored it. That was an entirely political decision; the officials [ie. in the Treasury] are hugely frustrated, having warned these guys that a fiscal event of this magnitude without a forecast would just tank.”

And there’s a point here that’s easily lost: whatever the market response was going to be, this was not a mini budget. It was a huge fiscal event: an historic change of economic tack. 

Truss and Kwarteng were rewriting economic Conservatism. 

And in their minds the ‘anti-growth’ coalition had, for a decade, been enabled by their own party – the Governments of David Cameron, Theresa May and Boris Johnson. Governments that, awkwardly, they’d served in.

In the place of OBR analysis, the Treasury was tasked with producing an unusually slim report that in effect marked its own homework. The Growth Report – by the count of one former Cabinet minister, the Government’s fifth growth report – was “mostly cut and paste”. 

Within it, there was one table in particular that stood out: it’s on page 28, table 4.3. And it’s labelled “Illustrative effects on tax receipts of higher GDP growth”. 

It seems to show that, five years after you start growing the economy faster, as Liz Truss and Kwasi Kwarteng were promising to do, you could forecast an extra £47 billion a year in tax receipts. And that’s handy, perhaps, when you’ve just given away £45 billion in unfunded tax cuts. 

Table 4.3 justified and distilled Kwasi Kwarteng’s radical redirection of economic policy – tax cuts leading to growth leading to increased tax revenues. All in a way that was plausible, but entirely untested. 

In fact, the slide is mocked by its own smallprint which says: 

“The figures in Table 4.3 are purely illustrative; they do not provide an assessment of what effect the policy package will have.”

Quote voiced by an actor

James Harding, narrating: Former Treasury officials damned it as flimsy, unserious; worse, magic realism. 

Cutting out the OBR from making an assessment of the mini-budget had a knock-on effect in the process itself. It cut out the Debt Management Office as well. 

The DMO – or the Treasury’s treasury as it sometimes calls itself – looks after the financing of government debt; buying and selling gilts. As we’ve discovered in the past few weeks, it’s a relatively obscure part of the forest until suddenly it’s not.

In the normal run of things ahead of a budget, the DMO works with the OBR on the forecast that accompanies the budget, so the impact of the full package of measures goes under the microscope. If it’s likely to cause a significant rise in interest rates on government debt, for example, the DMO would flag that up for the forecast. But then, that just didn’t happen this time.

That’s not to say that the lack of number-crunching caused this…

“We’ve just heard from the Bank of England, just now, with a rather extraordinary statement – saying they are planning a gilt market operation, which is an intervention from the Bank of England, they say, to try to restore orderly market conditions…

Sky News

James Harding, narrating: But there was no process in place which could have raised the alarm.

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James Harding, narrating: In the weeks before Liz Truss won the contest to lead the Conservative Party and the country, Kwasi Kwarteng had started having meetings with people who had experience of financial markets and economic policy making. 

Two people that he met then refer to his self-confidence; both his confidence that Truss would appoint him chancellor; and his confidence in a libertarian tax-cutting, pro-growth agenda. 

One former Bank of England official quoted John Maynard Keynes: 

“Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.”

Quote voiced by an actor

James Harding, narrating: So if he wasn’t being guided by the Treasury, who was Kwarteng’s economic inspiration? 

The most powerful voice in his ear has, well – perhaps obviously – been Liz Truss. One former Cabinet minister points out the way in which she put together her cabinet. “She doesn’t want debate; she wants them to deliver for her.” 

In that sense, Kwarteng set about delivery of what was her budget. 

And her political philosophy, according to one former colleague, is that to cut through, particularly as a woman, requires a clear, consistent message: 

He says that her thinking is this: “Obstinacy is a virtue; stubbornness is power. This is the way The Lady did it. Liberate the markets. Go for growth. She does not believe in a complex plan.” 

In reporting politics, there’s a magnetic pull to the idea that there is someone in the shadows putting words in the mouths of the principals; someone offstage pulling the strings. 

And, sure enough, Truss and Kwarteng listened to their fellow travellers. 

Matthew Sinclair of the Taxpayers’ Alliance was appointed Chief Economic Adviser to the Prime Minister in Downing Street. 

Here he is, a decade ago, discussing the moral case for lower taxes…

“ … We talk about the economics of tax policy, we talk about various social effects of tax policy all the time. But there’s also that related question of the morality of tax and is it fair, is it fair to be levying ever-higher rates on people…

Matthew Sinclair

James Harding, narrating: Then there’s Mark Littlewood, director of the free-market think tank, the Institute of Economic Affairs, and a long-term Truss ally…

Clip, Mark Littlewood: Thanks for joining us for this Joint Institute of Economic Affairs Taxpayers Alliance briefing on what’s been one hell of a fiscal event day and a mini-budget day… all looks pretty good I think from a free market point of view…

James Harding, narrating: Back in the day, Truss had drawn inspiration from John Redwood MP. Here he is in 2016 – speaking with the IEA – about whether UK taxes are too high… 

“And over the years ahead of conservative administration I hope we will have fewer taxes, simpler taxes, and taxes at rates that make people contribute more. One of the good things I think about the IEA’s work is that you’re constantly stressing that if you put the tax rate up too much you collect less money, and that is just stupid.” 

John Redwood MP

James Harding, narrating: In the words of one former Downing Street adviser: 

Quote voiced by an actor: These were people who have been drifting around slightly crappy think-tanks for the past decade, and have finally got their hands on the levers and didn’t know what they were playing with.

James Harding, narrating: But the role of the IEA and the Taxpayers Alliance can be overdone. It doesn’t take much detective work to discover the intellectual blueprint for the Truss and Kwarteng budget. They’d written it themselves. 

A decade ago, they had established the “Free Enterprise Group” and, together with fellow Thatcherite MPs Priti Patel, Dominic Raab and Chris Skidmore, they’d set out a vision tackling Britain’s pessimism and perception of its own decline in a book, Britannia Unchained. 

It was a recipe for restoring the British work ethic – in their words, “the lost virtue of hard graft” – and unleashing Britain’s buccaneering spirit, by, among other things, cutting taxes. As they wrote: “Those in work are put off working any longer than they have to be the excess size of their tax bill.”.

The book brims with historical references and flourishes that flowed from the pen of Kwasi Kwarteng, the historian. Kwarteng’s inspiration was himself. 

“Hello, I’m Kwasi Kwarteng from Cambridge, and I’m reading classics.” 

Kwasi Kwarteng on University Challenge, 1995

James Harding, narrating: By the time Truss and Kwarteng arrived in Downing Street, the Budget – says one former Cabinet minister – “was all pre-cooked” 

In the second half of August, as Tim Shipman reported in the Sunday Times, the two of them had hashed out their growth plan in Truss’s living room in Greenwich and the nearby Richard I pub in the second half of August. 

One depressed former Government official says it’s like this: “The thing about the British system is that the PM and the Chancellor can do what they like.”

But there remains a mystery. One that played out in the week before the Queen’s Funeral. 

“From across the United Kingdom, and around the globe, they came, and they waited, and they queued. A chance to say goodbye, not just to a monarch…

BBC News

James Harding, narrating: Thursday 15th September should have been the day that the Treasury closed its decision-making process and passed its fiscal plan to the OBR, giving them a week to finalise its analysis. 

But without the OBR, the Treasury had most of the rest of the week to make any further changes or additions. So the question, then, has been whose idea was it to scrap the 45p rate – the highest rate – of tax? And when did it form part of the Budget?

Kwasi Kwarteng revealed it on the day of that mini-budget with a particular flourish… 

“… But I’m not going to cut the additional rate of tax today, Mr Speaker. I’m going to abolish it altogether [cheers]. From April 23rd we are going to have a single higher rate of income tax of 40 per cent. This will simplify the tax system and make Britain more competitive…

Kwasi Kwarteng

James Harding, narrating: But the cheers didn’t last. It blew up politically. In the days since, it has been suggested that the 45p tax cut was Chris Philp’s idea, the Chief Secretary to the Treasury. Or that it was Kwarteng’s. 

Laura Kuenssberg: Can I ask you, did you discuss scrapping the top rate with your whole cabinet?

Liz Truss: No, no we didn’t it was a decision that um… the chancellor made. 

James Harding, narrating: “That,” says one person closely involved, “is total bollocks. There is no way a Chancellor can slip in a measure of that magnitude without the involvement of the PM.” 

On Tuesday 20th September, the Treasury’s scorecard of the coming Budget went to No 10. As with all fiscal events, the Prime Minister is asked to sign off all the key measures three days before the Budget. The PM, after all, is the First Lord of the Treasury. 

And it didn’t come as a surprise to her. As one person told us: “They – Truss and Kwarteng – spent the last two weeks of the campaign knocking this thing together. I don’t think there was much Treasury involvement.” 

***

James Harding, narrating: One of the ironies of the “mini”-budget was that it was sold to us as both small and enormous at the same time: a little thing that ushered in a whole new era. 

“We need a new approach, for a new era.

Kwasi Kwarteng

“I will lead a New Britain for a new era. Firstly this begins with growth and building a British economy that rewards enterprise and attracts investment…

Liz Truss’ speech at the United Nations

James Harding, narrating: One person we spoke to, who’d been at the heart of Downing Street a few years ago, thought it was smaller-minded than that: actually, not much more than a checklist of policies that Liz Truss and Kwasi Kwarteng hated under previous Conservative prime ministers and couldn’t wait to get rid of.

Things like the 45p rate, of course. As well as the cap on bankers bonuses (although I should say one of the country’s leading bankers described that as idiotic).

“The government is considering removing a cap on bankers’ bonuses as part of a shake up of financial service regulations. Sources close to the new chancellor Kwasi Kwarteng have confirmed reports in the Financial Times that he sees removing the cap as a way of making London more attractive to global banking operations.

BBC Today Programme

James Harding, narrating: The move on bankers’ bonuses was a kind of motif for Liz Truss. It was proof that she meant it when she said she would be the prime minister not just willing to do “unpopular things” but almost revelling in them.

Chris Mason, BBC: So you’re willing to do unpopular things if you think it can contribute to a bigger economy? 

Liz Truss: That’s right.

Beth Rigby, Sky: You’re prepared to be unpopular aren’t you? 

Liz Truss: Yes, yes I am.

James Harding, narrating: And yes, yes she is. She’s made herself unpopular faster than we’ve ever seen before in a prime minister. Unpopular with the public and her own backbenchers (who mostly didn’t vote for her in the first place). 

It’s unpopularity on a scale that matters. 

Because they’ve squandered political capital, good will, and credibility, the smart money at the moment says that Liz Truss and Kwasi Kwarteng just won’t have the muscle to open the door to their “new era”. 

It’s possible – probable, a lot of the people I’ve talked to would say – that when we look back from a greater distance at those 17 days from Tom Scholar’s sacking to the mini-budget, we might be more interested in what they tried to do than what they achieved.

Because what’s being tried is staggeringly audacious. Without a mandate, without evidence, without even the backing of their own party, the new prime minister and chancellor are trying to press-gang the country into signing up for a completely new, risky economic model.

It’s possible that the smart money is wrong, of course. Liz Truss and Kwasi Kwarteng are still staking everything on their new era in spite of the setbacks.

Perhaps one of their mistakes has been to rely on the fact that, traditionally, taking control of the Treasury would have been like seizing the presidential palace in a coup in a faraway country. Just seeing it captured would put you half-way to victory. 

It hasn’t gone that way in Whitehall so far. But the real fight goes bigger and wider than the mightiest department in the land. As one senior Treasury person put it to me, “This is a battle between ideology and pragmatism”. 

Pragmatism has notched up the first win, but the war goes on.

Thanks for listening to this episode of the Slow Newscast. It was made by me, James Harding, Sebastian Hervas Jones, Clauda Williams and Ceri Thomas. Jasper Corbett was the editor. Sound design by Mau Loseto.

How we got here

The aftermath of Chancellor Kwasi Kwarteng’s not-so-mini budget was hard to ignore – what with the wall-to-wall coverage, global attention, and non-stop memes. But at Tortoise, we couldn’t help thinking that this story had another half. It was a puzzle: what happened in the 17 days between Liz Truss becoming prime minister and crashing the UK economy? What was going on behind the scenes while the country was looking the other way – focussed instead on the death of the Queen? Was it a rush job? Sebastian Hervas-Jones, Ceri Thomas, James Harding and I got on the phone – to officials, ministers, Bank of England employees and civil servants – and set to finding out. Claudia Williams, Reporter