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Trussonomics was abandoned after Simon Case told PM it was causing market chaos

Liz Truss announced a swathe of tax giveaways in her only budget as prime minister - AP
Liz Truss announced a swathe of tax giveaways in her only budget as prime minister - AP

Liz Truss abandoned her tax-cutting agenda after being warned by the head of the civil service that it was causing market chaos, it has emerged.

Simon Case, the Cabinet Secretary, wrote a memo to the former prime minister urging her to abandon the measures announced in last year’s mini-budget.

The claims, reported by The Spectator magazine, will reignite the debate over how much sway Whitehall mandarins have to dictate Government policy.

It comes after civil servants at the Home Office threatened to go on strike rather than implement Downing Street’s migration policies.

Ms Truss announced a swathe of tax giveaways in her only budget as prime minister last September, including abolishing the 45p income tax rate.

But the statement, which was not accompanied by an OBR forecast or any money raising measures like spending cuts, sparked chaos on the markets.

Government borrowing costs soared by a record amount in a single day as investors sold off UK assets over fears the pledges were unaffordable.

Simon Case has been head of the civil service since 2020 - GETTY IMAGES
Simon Case has been head of the civil service since 2020 - GETTY IMAGES

Ms Truss was forced to sack Mr Kwarteng just three weeks later and bring in Jeremy Hunt, who immediately reversed almost all of the measures.

The involvement of Mr Case in delivering the death blow to ‘Trussonomics’ will further fuel the battle between the Tories and the civil service.

Tensions have been heightened by threats from the Public and Commercial Services union to lead Home Office and Border Force staff on strike.

It says that demoralised workers fear they are being forced to break international law by implementing migration policies like the Rwanda plan.

Jacob Rees-Mogg, a former business secretary, said that “a civil servant who refuses to implement a lawful policy must resign or be fired”.

Priti Patel, an ex home secretary, added that Whitehall officials must “respect the policies and legislation of a democratically elected government”.

Special advisers working for the Government also complained to The Spectator of civil servants “go-slowing” to kill off policies they don’t like.

This included a tactic whereby “officials run down the clock when they know a reshuffle is coming”, one former ministerial adviser told the magazine.

A former Cabinet minister revealed how, when they tried to make a change, they were told: “That may be the minister’s policy but it is not the department’s”.

Senior Tories have also clashed with the civil service in recent weeks over their role in the ‘Partygate’ investigation into Boris Johnson.