Kwasi Kwarteng’s mini-budget was a chance to demonstrate the government recognised the threat posed by rising energy prices and to set out further measures to stave off the growing storm.
Instead, by dogmatically sticking to the economic fairytale of trickle-down economics that Liz Truss insists is real, the Chancellor made the country’s situation dramatically and spectacularly worse. No wonder then that thinking Conservatives find themselves hoping for a Labour government.
The fostering of a home-owning society is meant to be one of the party’s most fundamental principles, but the current leadership’s economic illiteracy has led experts to warn that soaring interest rates – in a bid to control inflation – could see house prices fall by as much as 15 per cent. The 2008 financial crash saw a similar decline.
Today in the Scotsman we report on a number of deeply concerning issues that demonstrate just how dangerous a situation we were already in and how much worse things could now get.
For example, research by the Abrdn Financial Fairness Trust, carried out before the mini-budget, found a staggering 21 per cent of people in Scotland were experiencing “serious financial difficulties”, such as struggling to pay for food, having no savings or being behind on their bills. As interest rates rise, their ranks will be swelled by people unable to pay their mortgages.
And a senior police officer, expressing concern about current levels of social unrest, warned there was “undoubtedly more to come as the cost of living continues to rise”.
There is no politically elegant way out of the mess created by Truss and co, albeit in difficult circumstances. But their embarrassment pales into insignificance when compared to the damage that would be caused if they press ahead on this road to ruin.
The government simply must try again and this time come up with a fully costed budget plan, developed with input from the Office for Budget Responsibility, that restores confidence, to the markets and to the country.