I think the 45p tax rate cut was politically disastrous, irresponsibly expensive and economically pointless. But the one thing worse for Liz Truss than associating her agenda with such a suicidally bad policy, was U-turning on it.

U-turns aren’t always a mistake, they’re generally the least worst option for a government that risks throwing good political capital after bad. When you’ve made a huge howler, admitting it and rethinking may have you accused of incompetence but at least it puts you back in touch with public opinion in the eyes of voters. And so, this morning, the Chancellor duly tweeted (yes this is apparently how we announce things now):

We get it, and we have listened. pic.twitter.com/lOfwHTUo76

— Kwasi Kwarteng (@KwasiKwarteng) October 3, 2022

Kwasi Kwarteng’s announcement didn’t leave much up to interpretation or imagination — “it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle challenges facing our country.” In other words (but not very other) he’d like to disassociate this very unpopular tax cut for the rich from the rest of his supply-side economic reforms. 

The problem with this U-turn is that it is not associated with an isolated policy at the midpoint of an initially popular government’s agenda. This was a massive multi-billion pound plank in Liz Truss’ flagship policy programme at the very outset of her time in office, and it is her introduction to the voters. Everything the new Prime Minister does and says in these first few weeks and months will define her in the mind of the public, and be used to frame every subsequent decision and event. 

Her first impulse of going for growth, even if I fundamentally disagree with the Reaganite economics she thought would get it done, was entirely the right one. Unfortunately for her, the country largely agrees with me, and its appetite for tax cuts for the rich during such a severe crisis was non-existent. 

Shell-shocked by bad reactions from the market, media and opinion polls, Truss and her team clearly lost their nerve. The growth package must be salvaged, the unpopular policy cut off like mold from a block of cheese (we all know how much Truss loves cheese) and better sooner than later. 

She and Kwarteng may not realise it yet, but this, rather than the tax cut, marks the death knell of their government. It may shamble on, even for years, but any hope they had to get anything done has just expired. 

When inexperienced politicians feel the shells falling around them for the first time, its easy, like conscripts on the front line, to panic and run out of the bunker. What they should have done is take stock of everything that they had communicated to the public good and bad, and played to their strengths rather than rushing to defend weak spots already overrun by the enemy. 

What amidst all the rubble of the emergency budget was still salvageable? Certainly they had made a bad impression, but this could also have been their salvation. Austerity was hardly popular — nobody likes their library or hospital closing, fewer cops on the streets, no new schools, frozen public sector wages — but Cameron was undefeated at the ballot box running on exactly that agenda. Why? Because he told voters that if they took their medicine and eat their vegetables the economy would recover, the lights would stay on and the house would stay standing. 

The one thing Truss had going for her was that she had, in spectacular, car crash manner, made an impression as a committed, determined free marketeer. She could have sold the tax cut, as she must sell dozens more hard-to-swallow measures, as unfair but effective. One of the most potent currencies in politics, especially for a woman seeking to emulate Thatcher, is conviction. 

It’s what Truss and Kwarteng believe in

The most fatal aspect of all this U-turn is that the tax cut was not a mistake, nor is it separable from the other aspects of the budget. It’s what Truss and Kwarteng believe in, and its consistent with their ideology and approach. Going against public opinion in their very first weeks might have been dangerous, but it would also have communicated strength, conviction and determination. 

The only way out for Truss  was through — her one hope was following the example of the Iron Lady and driving a tank through the serried ranks of public opinion and hostile media. But by U-turning she has added weakness and a lack of faith in her own policies to the already dangerous impression of an uncaring and elitist government. This was a U-turn off a cliff.