The damning evidence against Kwasi Kwarteng's budget

Too late, far too late but finally we have it. The advice that the Office for Budget Responsibility sent to the then Chancellor Kwasi Kwarteng, just before his disastrous budget which cost tens of billions of pounds, crashed the pound, sent borrowing costs soaring and almost destroyed the pensions industry.

This was the report that the Chancellor refused to publish at the time, and now we can see why. It basically warned that the finances were stretched, a recession on the way, borrowing off target and bound to get worse as fuel prices soared and inflation about to take off.

And so the Liz Truss government decided to borrow even more in order to throw money at the very wealthy, in a mad experiment.

Those totally unfunded tax cuts were hailed at the time by the right-wing media, as the first real Thatcherite budget in years. Which seems to suggest that none of them lived through Margaret Thatcher’s time in No.10 or have ever read a book on the period.

The whole thing was the culmination of decades of lobbying, campaigning and “research” by ultra-libertarian think tanks, which have tried to convince the nation that trickle-down economics is a real thing and that the Laffer curve really means that tax revenues always rise the more you cut taxes.

Both are just the fantasies of millionaires who think tax is paid by the little people but finally, for just a few months, they found in Liz Truss and Kwasi Kwarteng two politicians of such arrogance and ignorance that they actually believed this stuff and tried to implement it.

Not only that but they tried to implement it during an energy crisis, a flatlining economy and a war in Europe and when the Office for Budget Responsibility was telling them that the economy was in a hole.

It predicted that borrowing was going to be £122 billion above target in 2022 and £22 billion a year worse than previously thought for years to come.

And this is the time that Liz and Kwasi decided to throw unfunded billions at the richest, in the hope that somehow it would turn the UK into a powerhouse of growth.

Of course, they did this without publishing the advice and research of the OBR, which was what spooked the markets the most. No Chancellor can bet the house on unfunded tax cuts, refuse to publish the advice of the people he pays to mark his homework and still reassure the markets his numbers add up.

Having created the OBR, you have to let it have its say, or everyone will want to know what you have to hide. In this case what the government had to hide was that the numbers did not add up. The killer fact from the OBR report was that even without a mad tax giveaway total government debt would peak at 89.8% of GDP, which was a full 9.5% higher than it had predicted only a few months earlier. Even that figure did not take into account the fact that many expected tax rises on fuel duty for example, were very unlikely to be possible in the middle of an energy crisis.

In short, the government was heading for an economic crisis that made borrowing recklessly, absolutely unsustainable. They did it anyway and they were destroyed for it.

It would be nice to think this will be the last such experiment, but we cannot be sure. The idiots are gathering their strength, appearing in the media spreading their crackpot theories, convincing the gullible that you can have your cake and eat it.

They will be back but at least it is almost impossible to imagine a Chancellor who will ever again try to deliver a budget without publishing the analysis of the OBR.

What an appallingly expensive lesson that has been.