Senior Treasury officials have insisted they raised alarm bells with Kwasi Kwarteng ahead of his disastrous mini-Budget.
James Bowler, the leading civil servant at the department, told the Treasury select committee that it ‘wasn’t sensible’ of Kwarteng to announce tax giveaways separately from the spending cuts that were also needed to balance the books.
The mini-Budget in September saw the biggest round of tax cutting in 50 years but prompted a collapse in the value of the pound and a huge sell-off in bonds.
Kwasi Kwarteng’s mini-Budget in September saw the biggest round of tax cutting in 50 years but prompted a collapse in the value of the pound and a huge sell-off in bonds
The maelstrom was only brought under control by a £19billion Bank of England intervention.
It resulted in Kwarteng and Prime Minister Liz Truss losing their jobs – and the mini-Budget being unwound by new Chancellor Jeremy Hunt.
Bowler said the departure of Sir Tom Scholar – his predecessor as permanent secretary – earlier in September ‘wasn’t normal’ as he was sacked by Kwarteng.
The job was shared temporarily between Beth Russell and Cat Little, until Bowler took over in October.
Russell told MPs there was a ‘mismatch’ between market forecasts for giveaways worth £25billion to £30billion and the £45billion total announced by Kwarteng.
Asked by Labour’s Rushanara Ali whether officials had raised alarm bells, Russell said: ‘We did.’
When asked whether the advice had been ignored, Russell said: ‘That’s your words rather than mine.’
