MP Alan Campbell column: Kwarteng had a chance and he blew it

Tynemouth MP Alan Campbell.Tynemouth MP Alan Campbell.
Tynemouth MP Alan Campbell.
New Chancellor Kwasi Kwarteng had the chance to do the right thing.

Everyone agrees that after the last 12 years, we need economic growth.

Scrapping the NIC’s increase and reducing basic rate of income tax to 19p make sense in a cost of living crisis.

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Action is needed to help with energy bills though less agreement over who should pay. The Chancellor wants the debt to fall on future generations, Labour proposes a windfall tax on energy companies.

But then the Chancellor showed his true colours and moved to scrap the higher rate of income tax for people earning over £155K a year.

The markets took fright. It cost the Bank of England £65 billion to raise interest rates to save the pound and stop a run on pension funds.

By the time the Chancellor backtracked – fearing losing a vote and his job – the damage was done.

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My constituents were already seeing their mortgage payments float up and now they are set to soar. That comes on top of rising inflation and increased prices in the shops.

Property and construction and hospitality are two important employers locally but they are likely to feel the effects from the economic fallout.

We all stand to lose when the Chancellor cuts public spending, including on schools, the NHS and already struggling council budgets, even though he has no mandate from the electorate to do so.

Governments rarely survive such economic turbulence particularly where the damage is self-inflicted.

The government’s reputation for economic competence has gone, and may prove impossible to get back.