Britain’s main opposition Labour Party criticised the Conservative government’s economic plans on Friday, describing the new prime minister and finance minister as “two desperate gamblers in a casino” who had run out of ideas.
Prime Minister Liz Truss has long signalled she wanted to rip up what she calls the “orthodoxy” in the finance ministry to try to spur economic growth, but the scale of spending in her government’s mini-budget caught many by surprise.
Lauded by many of her supporters for returning to what they said was true Conservative thinking on the economy to prioritise tax cuts and tax breaks, others raised concerns over the lack of detail on how much it would cost and who would pay for it.
Rachel Reeves, Labour’s finance policy chief, said finance minister Kwasi Kwarteng had prioritised big business and “bankers’ bonuses” over working people struggling with rising prices by turning to what she called a discredited theory of “trickle-down economics”.
“The prime minister and chancellor (finance minister) are like two desperate gamblers in a casino chasing a losing run,” she told parliament.
“The argument peddled by the chancellor today isn’t a great new idea, or a game-changer … It’s all based on an outdated ideology that says if we simply reward those who are already wealthy, the whole of society will benefit.”
Ed Davey, leader of the Liberal Democrats, called the plan “the billionaire’s budget, showing the Conservatives are completely out of touch with families struggling to pay the bills”.
Reeves also repeated U.S. President Joe Biden’s comment saying he was “sick and tired of trickle-down economics”, rejecting the notion that tax cuts for the rich can benefit everyone.
Taking aim at the lack of independent scrutiny of the government’s plans, Reeves described Kwarteng’s statement as “a budget without figures, a menu without prices”.
“What has the chancellor got to hide?” she said, a point echoed by Conservative lawmaker Mel Stride, who also questioned why the government had gone ahead with the plans without new forecasts from the Office for Budget Responsibility.
Truss’s team has explained the lack of input from the independent OBR by saying the crisis with spiralling energy prices meant the government had to move quickly, meaning there was no time for the body to complete its analysis. They also argued a “fiscal statement” did not require such forecasts.
Kwarteng said an OBR forecast would come by the end of the year, when the government will outline a fuller budget.
While Labour and others were biting in their criticism of the government’s fiscal statement, the Conservative Party largely backed the mini budget, although some lawmakers expressed concern over the scale of the package.
John Glen, a former junior finance minister, pointedly asked Kwarteng about market reaction, which saw sterling and British government bonds in freefall, saying “there is a clear concern” over the finance ministry pursuing fiscal loosening when the Bank of England was raising interest rates.
Some said previous Conservative governments, in power for 12 years with five of them in coalition with the Liberal Democrats, should have adopted the policies a long time ago.
Praising the radicalism, Conservative lawmaker David Jones told Reuters: “We actually need that because ‘Steady as she goes’ wasn’t going to cut the mustard.”