Tory MPs were in an anxious mood as they returned to the Commons this afternoon after weeks of conference recess and government meltdown. Their first session in parliament was, appropriately enough, Treasury questions, where they had a chance to air some of their anxieties with the Chancellor and his team. It could have been a much worse session for Kwasi Kwarteng, given the way things have gone recently. But the number of MPs seeking reassurance won’t have left him feeling very relaxed.
Kwarteng told the Commons that his mini-Budget had been ‘really strong’
Kwarteng told the Commons that his mini-Budget had been ‘really strong’ and that MPs constituents would have been pleased with many of the ‘strong measures that we have introduced.’ The response of the markets, of course, was largely that it was a bit too strong, and so other MPs were quick to ask how the market’s would react to his ‘fiscal plan’, now due at the end of this month. Mark Harper, one of the most effective backbench campaigners in the Conservative party, asked about this morning’s warning from the Institute for Fiscal Studies that there would need to be at least £60 billion of fiscal tightening (cuts to you and me) over the next four years in order to get debt falling as a percentage of GDP. Kwarteng replied that it was not ‘right to pre-judge or anticipate the measures’ he was going to announce. Julian Smith asked for reassurances that ‘the government will not balance the forthcoming tax cuts on the back of the poorest people in our country.’ His question was answered by Chief Secretary to the Treasury Chris Philp, who said ‘of course we are going to balance considerations of fairness, the cost of living pressures that people suffer, along of course with interests of taxpayers who are working hard to pay tax as well.’ It’s worth noting that all these MPs supported Rishi Sunak in the leadership election. Sunak wasn’t in the Commons today, but his supporters were. Perhaps it will come as some relief that there were not any openly critical questions from those who backed Truss.
Kwarteng had a slightly more bad-tempered exchange with Labour’s shadow chancellor Rachel Reeves, who called this a ‘British crisis made in Downing Street,’ and asked whether the Prime Minister and the Chancellor were the ‘last people left on earth who actually think their plan is working.’ The Chancellor retorted that the IMF had today said his plans meant higher growth (he didn’t mention that the IMF also said the measures would ‘complicate the fight against inflation’). Reeves then called on Kwarteng to ‘reverse the Budget’ – to which he had the reasonable comeback of asking which tax cuts Labour wants to reverse anyway. But he seemed rattled, which is hardly a surprise given how badly the past few weeks have gone.
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