Liz Truss has put a seasoned Treasury official in charge of the department, despite previously saying she wanted to challenge the “orthodoxy” around the government’s economic policy.
In yet another U-turn, the prime minister decided that James Bowler should become permanent secretary at the Treasury instead of Antonia Romeo.
Romeo, the permanent secretary at the Ministry of Justice, had been widely-tipped to get the job, and was initially Truss and chancellor Kwasi Kwarteng’s preferred candidate.
But in a dramatic about-turn, the PM over-ruled Kwarteng and opted for Bowler, who was at the Treasury for more than 20 years before more recently working at department for international trade.
His appointment is seen as another attempt by the government to calm the money markets in the wake of last month’s disastrous mini-budget.
Bowler replaces Tom Scholar, the previous Treasury permanent secretary who was sacked by Kwarteng on his first day as chancellor.
That was seen as a sign that the new government wanted to dump traditional Treasury thinking and adopt a new approach - as shown by the expected appointment of Romeo as his replacement.
At a Tory leadership hustings in August, Truss said: “This whole language of ‘unfunded’ tax cuts implies the static model, the so-called abacus economics that the Treasury orthodoxy has promoted for years, but it hasn’t worked in our economy because what we have ended up with is high tax, high spending and low growth.
“That is not a sustainable model for Britain’s future.”
Bowler’s appointment came shortly after Kwarteng announced that he was bringing forward his medium term fiscal plan - when he is expected to set out how he plans to pay for £43 billion of tax cuts announced in the mini-budget - from November 23 to October 31.
That followed pressure from Tory MPs and leading economists for the chancellor to give more details on his plans to boost economic growth as soon as possible.
Truss and Kwarteng were also forced to abandon their plans to abolish the 45p tax rate paid by the highest earners following a backlash from Tory rebels.