A review of the Truss premiership

19/10/2022

In what has possibly been the most turbulent first six weeks for a new Prime Minister, there is huge uncertainty over Liz Truss’s future and whether she can save the reputation of the Conservative Party

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Image by Tim Hammond / No 10 Downing Street

By Max Abdulgani

On Tuesday 6 September, Liz Truss officially became Prime Minister of the United Kingdom. Following her predecessor's somewhat chaotic departure, she was elected by Conservative Party members with a 57 percent figure equating to 81,326 votes. Despite being the ultimate winner amongst the membership, Liz Truss achieved the lowest mandate from the membership in recent history. Less than William Hague, Iain Duncan Smith, Michael Howard, David Cameron, Theresa May and Boris Johnson. This aside, however, Truss marks the third female leader of the Conservative Party and the third female Prime Minister of the UK.

At the very beginning of her premiership, it was clear that a markedly different tone had been set from previous governments. Truss wanted to base her legacy on her mandate from Tory members. This meant pursuing a course of ideological purity over a more internal party consensus. Her mantra was and still is to “grow the economy”, but her strategy on how to do this has rapidly changed even within the last week.

At first she appointed Kwasi Kwarteng as her Chancellor, a figure with a reputation for being on the right of the party. In a mini-budget on 23 September he announced he was planning to scrap the bankers’ bonus cap and pledged a multitude of tax cuts across the board, including a reduction of corporation tax. He said he aspires for the city to experience “big bang 2.0”, aided by an exodus of corporate red tape that he perceives as holding back the potential of Britain. The government was seen to be harking back to the Thatcherite era of trickle-down economics and neoliberal growth with its rhetoric on this, and the ideological gap between the two mainstream political parties was becoming increasingly clear.

Over time, however, hostility to this economic approach was too much to bear; perceived as both reckless and ill-judged by opposition parties, the media and the public respectively. This became no clearer than when the Bank of England announced an expansion of its emergency bond-buying operation to calm the markets, setting aside up to £65 billion to spend on long-dated UK government bonds following an unprecedented sell-off.

Despite vowing to strive forward with her plans for government, Liz Truss tripped at the first hurdle. Political consensus prevented her from pursuing anything of substance in the original mini-budget proposed by the now former Chancellor Kwasi Kwarteng. His replacement by Jeremy Hunt is meant to appease the moderate wing of the party and act as a reassurance mechanism for markets.

I had the privilege of being in the House of Commons this week to see Jeremy Hunt’s statement from the gallery. His rhetoric was a notable contrast to Kwarteng’s tough economic talk on fiscal responsibility. Hunt revived the phrase: ‘compassionate conservatism’ from his days in the Cameron government to distinguish his approach to his predecessor. Whilst Liz Truss promised just a few days ago that there would be “absolutely” no spending cuts, Hunt seemed to suggest otherwise. He said there would have to be ‘“more difficult decisions”’ made and that “some areas of spending will be cut”. This was met with an uproar from the chamber, and it is not expected that Hunt’s decisions will restore confidence in this government despite reassurances. He also reversed the decision to cut the basic rate of income tax to 19 percent, as well as reversing the proposed abolition of the top rate of income tax. The new approach from Truss’ second Chancellor marks a full-blown rejection of Kwarteng’s bold plans for a more right-wing mini-budget and is a reflection on the amount of pressure the Prime Minister has faced to ditch her plans.

It is fair to say the government is in disarray in its current form. A Tory government way past its mid-term point facing huge unpopularity, while Labour advanced to a 33-point poll lead. Even on Monday, the Prime Minister failed to be present to answer crucial questions on why she had sacked her own Chancellor just 38 days into the job. Leader of the House Penny Mordaunt was forced to take her place instead, answering questions on her behalf.  The line from opposition parties and repeated by The Daily Mail is that she is a PM ‘“in office but not in power”, suggesting her new Chancellor is pulling the strings.

In a recent interview, the Prime Minister stressed that her government had “gone too far and too fast” with making economic changes, acknowledging that her approach had now changed and she had succumbed to political and economic pressure. The phrase ‘not worrying the horses’ comes to mind when considering the government’s change in direction. The priority seems to be stabilising the pound against the dollar as well as appearing to be a fiscally responsible Conservative Party.

Talks of Truss leaving office have begun to surface even this early, clearly suggesting the new PM will face immense challenges over the coming weeks and months of what remains of her premiership. What remains certain is that the Tories will face an uphill struggle to stay in power and continue to be the default government across the country. Time will tell whether they can detoxify their woeful reputation in time to win a fifth successive general election and once again form a mandate to govern.