Mini-budget debacle likely to create tension between Truss and Kwarteng

<span>Photograph: Christopher Thomond/The Guardian</span>
Photograph: Christopher Thomond/The Guardian

They are neighbours in the same small corner of Greenwich, and now live next door in Downing Street – but the alliance between Liz Truss and Kwasi Kwarteng goes back more than a decade to their entry into parliament as new MPs in 2010.

Back then, as part of a new Free Enterprise Group of Tory MPs, the pair were trying to push the coalition government towards a more free-market approach to Conservative politics.

“If you look at opinion polls, the concept of the free market is more popular in China, Germany and America than it is in Britain. We want to have a more positive attitude towards making profit, wealth creation,” Truss said in 2011.

Kwarteng was making the same argument, but with an added message about the need to “engage in a public debate, with journalists, with the fourth estate, and put the case across”.

A decade later, they are at the very top of government and banging the same tax-cutting drum, but have failed to follow the now chancellor’s own advice about bringing the public along with them.

The pair were so ideologically aligned that they co-authored two books together, along with others: Britannia Unchained, which famously referred to British workers as some of the “worst idlers in the world”, and After the Coalition.

Related: Ten days that shook the British political world: the inside story of Tory collapse

But while Truss’s career progressed as a junior minister under David Cameron, and cabinet minister before long, Kwarteng was left in the cold. He did not start on the ministerial ladder until 2018, before rising to business secretary under Boris Johnson.

Truss and Kwarteng are believed to have teamed up as partner candidates to be prime minister and chancellor early in the campaign. They planned their programme for the first 100 days of government together with meetings in Greenwich.

And as Kwarteng delivered his controversial mini-budget, Truss was alongside him, smiling and nodding along.

However, the fallout has tested even such a long political friendship. The first signs of tension between Truss and Kwarteng emerged last week with reports that she was resisting a statement to calm the markets, which the Treasury believed was necessary. Downing Street sources insisted there was no row and that Truss and Kwarteng are so close that they meet every day.

Related: Kwarteng is sticking to his guns on tax and spending cuts. But what he really needs is luck

But a further hint of a fracture also appeared on Sunday, as Kwarteng told the Mail on Sunday that they had both signed off the policy to abolish the 45p top rate of tax. “I think we were agreed on that. We worked closely together to come up with the policy. I speak to the prime minister every day. We get on very well and we share ideas all the time. We are absolutely as one and we have come through a challenging period,” he said.

But Truss went on to suggest to the BBC’s Sunday with Laura Kuenssberg that it was ultimately Kwarteng’s call, saying: “It was a decision that the chancellor made.”

A spokesperson for the chancellor was quick to dismiss any talk of friction, saying the pair were in “lockstep”. But the history of No 10 and No 11 relations shows even the most seasoned political allies can have trouble keeping to the same script, let alone at a time of such unprecedented economic pressure.