It wasn’t supposed to be like this. In his first Conservative conference speech as Chancellor, Kwasi Kwarteng wanted to double down on his budget and set out a vision for a growing, thriving economy. But since its announcement ten days ago, a poor market reaction and soaring borrowing costs have diminished the Chancellor’s reputation. So much so that this morning (3 October) he dismantled a key pillar of the Budget: the abolition of the 45p top rate of tax.
Nonetheless, Kwarteng’s speech made clear that he would continue in the same vein. He acknowledged there had been a “little turbulence” in recent days but said “we need to focus on the job in hand; we need to move forward. No more distractions.” Is the Bank of England’s emergency £65bn intervention last week a mere distraction?
This was a speech riddled with contradictions. Kwarteng sauntered towards the podium with a jaunty confidence, but then his delivery was nervous. He compared the government’s “growth plan” to the Industrial Revolution, but then spoke about tax cuts, not industry and infrastructure. He recommitted to reducing government debt as a share of GDP in the medium term but wouldn’t explain how that will happen. He said his plans would lead to “more money for public services” but wouldn’t increase public-service budgets in line with inflation – potentially costing them £18bn a year.
Still trying to blame today’s problems on the last Labour government, Kwarteng said the Conservatives had reversed a “story of national decline”. But then said his policies were necessary because, after 12 years of Tory rule, “the path ahead of us was one of slow, managed decline”. Which is it?
The atmosphere in the conference hall was stunted, nervous. Standing ovations came hesitantly. The applause was sparse. After the unexpected announcements in the Budget, there was a sense Kwarteng could produce another surprise. “Absolutely anything is possible,” the Chancellor said at one point, the sweat sparkling on his head. Yes – that is part of the problem.
[See also: Liz Truss’s tax U-turn has emboldened Tory rebels]
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