Is Liz Truss really to blame for £30 billion of austerity?

Plain-speaking Economics

Sunday’sObserverled with the dramatic headline ‘Revealed: the £30bn cost of Liz Truss’s disastrous mini-budget’. Apparently, the former PM is responsible for half of the estimated £60bn fiscal hole that Jeremy Hunt intends to fill on Thursday with tax increases and spending cuts. But if you are suspicious about this claim, then you are right to be.

The £30bn figure comes from analysis by the Resolution Foundation (RF). In reality, there is not much analysis here, and little new.

Some £20bn of the £30bn is simply a (high) estimate of the direct cost to the Treasury of those tax cuts in Kwasi Kwarteng’s mini-budget that have survived. This £20bn is mainly accounted for by the reversal of the increases in National Insurance (NI) contributions, and partly by the reductions in Stamp Duty.

However, these measures were widely welcomed at the time, in part because they made a…

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