Image source, Getty Images
- author, Paul Seddon
- role, Political reporter
Civil servants have amended the document to describe Chancellor Liz Truss’ mini-Budget as “disastrous” after she complained it showed political bias.
An explanatory memo for the King’s Speech, published earlier on the government website, said the previous prime minister’s approach had undermined the UK’s financial credibility.
He added that Labour’s plans to make forecasts mandatory before the Budget would ensure that the “mistakes” made by the government “are not repeated”.
Ms Truss, who lost her seat in elections earlier this month, called it a “flagrant breach of the rules of impartiality” and a “personal and political attack”.
She has written to Britain’s top civil servant, Simon Case, asking him to remove the material and give “an appropriate warning to those responsible”.
The Cabinet Office said the document had been “corrected and updated”.
The spokesman added that Mr Case had “responded to Liz Truss and instructed her to remove these references”.
The King’s earlier address to Parliament outlined his legislative plans for the coming year following a landslide victory in the general election earlier this month that returned Labour to power.
This includes a new ‘Budget Responsibility Bill’ which will legally require the Office for Budget Responsibility (OBR) to produce forecasts of the impact of major tax and spending decisions.
Ms Truss did not publish such forecasts from the watchdog ahead of a mini-Budget in September 2022 in which she will announce billions of dollars in tax cuts and plans for grants to reduce energy bills for homes and businesses.
This meant that no formal assessment of the impact on future government borrowing was carried out, which is widely thought to have contributed to the negative market reaction to the measures, which resulted in the end of her prime ministerial term after just 49 days.
‘Massive violations’
A background memo accompanying the King’s Speech said Labor’s bill would stop budget measures “being announced without adequate scrutiny”.
The original document said the move would “avoid announcements similar to Chancellor Liz Truss’s disastrous ‘mini-budget'”, adding that it had “damaged the UK’s credibility with international lenders”.
Moreover, the plan, which the Labour Party has labelled “fiscal lock-down”, [the] Liz Truss’ “mini-budget” cannot be repeated.”
In a letter to Case, the former prime minister argued that the statement was “a clear breach of the Civil Service Act and that such personal and political attacks have no place in a document prepared by a civil servant.”
She added that the explanation was included in a section headed “Key Facts,” making the “error even more egregious.”
She said the summary was “untrue”, adding that it made “no mention whatsoever” of the “LDI crisis” or the Bank of England’s “regulatory failure”.
The “LDI crisis” alludes to so-called liability-driven investment, which is thought to have made some pension funds more vulnerable to changes in government borrowing rates.
Ms Truss recently accused the Bank of England of failing to inform the Treasury about the risks to the financial system, adding that she had “never even heard of” LDI until the mini-Budget was announced.
Civil servant rules
The Civil Service Law stipulates that civil servants must maintain “political impartiality” and may not use public resources for “party political purposes.”
More specific rules on government communications say official documents should “seek to provide a balanced and objective account of the decisions of the current administration” without attacking critics.
It adds that while civil servants can explain and defend government policies, they should not do so “from a party political perspective”.
Ms Truss’s letter is the latest attack in a long-running battle with bureaucrats.
As she runs for Conservative leader in 2022, she frequently blames “Treasury orthodoxy” for slowing economic growth in recent years.
Since leaving Downing Street, she has also accused the OBR of being part of the “economic establishment” which has been too pessimistic about the potential benefits of tax cuts to the economy.
