Since no one else is doing it, let me try to put the case for the defence. First, most of the individual proposals in the mini-budget and Growth Plan were good ideas and remain good ideas — at least if you want Britain to be a more dynamic and business-friendly country.
Second, the measures announced were hardly slash and burn: as the Institute for Fiscal Studies points out, they took the tax burden back to the level of 2021-22. Imagine a scenario in which, with recession looming and the Bank of England tightening rates, a chancellor confirmed whacking great tax rises on business and employment — the de facto alternative.
Third, as Albert Edwards of Société Générale notes, the government had already announced the really big spending decisions — the energy price guarantee (and imagine the economic carnage without that) and the cancellation of rises in corporation tax and national insurance. The markets were already primed to punish the UK, he argues, because of the Bank of England’s decision the previous day to raise rates at a slower rate than the US and to keep trying to dispose of the assets accumulated under quantitative easing. So Kwasi Kwarteng’s decision to throw in a few more tax cuts just gave an extra push to a boulder that was already rolling.
Fourth, the Centre for Economics and Business Research consultancy has suggested that the costs of Kwarteng’s measures have been dramatically overstated, not least by the Treasury.