A prominent Conservative lawmaker in the House of Lords said decisions around the time of the Sept. 23 fiscal statement represented a “breakdown at the heart of government” that contributed to a panic in markets.
Lord Bridges of Headley, who leads the Economic Affairs Committee in the upper chamber of Parliament, said the episode represented a failure in the system that went beyond the Treasury’s decision not to involve the Office for Budget Responsibility in making the statement.
The lawmaker who previously served as a minister in the Brexit department for the government until 2017 was reacting to testimony on Tuesday by Bank of England Governor Andrew Bailey, who said he wasn’t briefed on the contents of what the Treasury announced at the time. That plan, which since has been reversed, included large unfunded tax cuts and prompted investors to dump the pound and government bonds.
“It was quite a jaw-dropping moment when (Bailey) revealed that the Treasury official clearly didn’t know what was going on in the Treasury itself,” Lord Bridges said Wednesday in an interview on Bloomberg Radio.
He said it’s normally “just basic” to have Treasury officials briefing the BOE about what’s coming in major fiscal statements. That protocol was in place even before the OBR was established in 2010.
The government “proceeded far too fast, and clearly in a very haphazard and disorganized way,” Lord Bridges said. “It really does call into question, just what was going on in Downing Street in the run-up to that mini budget.”
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