Former Treasury minister hits out at Liz Truss’s ‘endless crazy tax cuts’ and ‘laughable’ public sector U-turn

A former Treasury minister who worked under George Osborne has criticised Liz Truss’s “endless crazy tax cut” plans and described her now abandoned regional pay proposals as “laughable”.

The scathing comments from Jim O’Neill — a crossbench peer and economist — comes after the foreign secretary dropped a major policy barely 12 hours after it was launched after facing a significant backlash.

The foreign secretary had proposed a £8.8 billion “war on Whitehall waste” that included plans to introduce regional pay boards for civil servants and could have led to cuts in public sector wages outside the southeast.

Tim Montgomerie, a former No 10 aide and founder of the Conservative Home website, said the U-turn was not the foreign secretary’s “finest hour” — but Lord O’Neill said the description was “generous”.

He told BBC Radio 4’s Today programme: “Laughable really, given that the guy she’s still quite happy to align herself with signature policy was supposedly levelling up. The optics of that: Dear, dear, dear.

“I guess some kind of vague academic study might be out there, or might even be worthy of a PhD thesis, as to whether same pay for civil servants all around the country might be looked at.

“But the idea someone in a [Boris] Johnson cabinet would seriously suggest something like to me — I should laugh because it’s so important”.

Describing himself as “close” to the concept of levelling up — the flagship policy of the outgoing prime minister – Lord O’Neill said: “I don’t get it.”

“The idea of somebody that wants to be the prime minister coming out of a Johnson government that is a sign of her commitment to levelling — I’m sorry it’s very disappointing.”

Asked about her justification to save billions of pounds to fund other proposals, he added: “Well if you’re gonna come up with endless crazy tax cuts to keep yourself popular for the small number of people who vote for the new leader then that’s the sort of thing that follows — one crazy idea results in another.”

In an attempt to defend Ms Truss, her supporter and former cabinet minister Brandon Lewis suggested it was “never the case” the leadership contender planned to cut public sector pay.

“That was never suggested in anything,” he added.

However, Ms Truss’s team had made clear when the proposal was unveiled that a signficant amount of the money she set out to save – £8.8 billion of £11 billion – would have to cut from the public sector.

“This is the potential savings if the system [regional pay boards] were to be adopted for all public sector workers in the long term,” a press release said.

Ms Truss, the frontrunner in the race to replace Boris Johnson in No 10, also claimed after the U-turn on Tuesday her policy had been “misrepresented” amid growing blue-on-blue tacks.

Speaking to the BBC in Dorset, Ms Truss said: “I’m afraid that my policy on this has been misrepresented. I never had any intention of changing the terms and conditions of teachers and nurses.

“But what I want to be clear about is I will not be going ahead with the regional pay boards, that is no longer my policy.

“I’m being absolutely honest, I’m concerned that people were worried, unnecessarily worried about my policies and therefore I’m being clear that the regional pay boards will not be going ahead.”