From Truss to Bailey to panicking MPs, the blame for this mess spreads wide

Turns out the orthodoxy is stronger than ever Liz Truss or Kwasi Kwarteng realised. Already it appears government policy is headed towards higher taxes and delays to supply side reform. We have ended up back at square one, but with a discredited government and no obvious plan for the growth that the now-departed Chancellor rightly identified as vital to our country’s future. 

The guilty parties are myriad. Truss and Kwarteng made a Horlicks of the communication around the budget. The asleep at the wheel Governor of the Bank of England, who finally issued a new culpa this weekend for his and his colleagues miserable forecasting performance over the past 18 months, laid the ground for the market reaction. Westminster’s allergy to anything radical led to headlines that no government could survive. 

What next? More of the same? At our current rate Britain is set to resemble an unreformed health service with a country attached. 

It is worth remembering the real culprits of this mess: an economically ruinous lockdown imposed for longer, and far harder, than was ever necessary. And a badly targeted, panicked energy price guarantee that is going to cost more than it needs to as a response to Vladimir Putin’s disruption of global energy. 

The common theme there? Massive state handouts, crushing the public finances. Many will say that the last few weeks have discredited free market economics, and they’d be right. It will be harder for taxes to be cut in future. Truss will be unable to get through supply side reforms thanks to her standing in Parliament. Pro-growth policies like research and development tax breaks and infrastructure spending will be sacrificed so we can throw another couple of billion into the various black holes across public spending. 

The tragedy of the last few weeks is that the Prime Minister and the Chancellor identified Britain’s problems. Solving them is now even harder. A sorry mess, indeed.