Liz Truss is no radical and is certainly not a political outsider, but her very slight deviation from political norms and Treasury orthodoxy has been so harshly punished by the markets and the media just 38 days in we witness the unedifying spectacle of a brand new Prime Minister throwing her brand new Chancellor to the wolves to save herself.
The Chancellor of the Exchequer Kwasi Kwarteng rushed back from Washington DC to London Friday morning for what were euphemistically called ’emergency talks’ only to be sacked by the Prime Minister, the BBC reports. At 38 days, Kwarteng is the shortest-engaged Chancellor of the Exchequer since Iain Macleod in 1970, who was rushed to hospital the same day as his first speech and later died of a heart attack exactly one month after being appointed.
It is reported Truss will follow up this defenestration of her key lieutenant from government, one of her oldest political allies, with a major rise in corporation tax from 19 per cent to, it is claimed, as high as 25 per cent. This is the demolition of the Truss-Kwarteng cut government and go for growth strategy which is barely six weeks old.
As if the previous massive U-turn on cutting the punitive highest rate of taxes for those on larger incomes wasn’t already, the events of today — sacking the most consequential government minister to delivering her stated vision for government, and apparently making more tax U-turns at the same time — probably marks the end of the Truss era.
Even if she limps on as Prime Minister for the coming weeks, months, or even to the next general election in 2024, her attempt to run the country only slightly differently to the previous Prime Minister has been comprehensively crushed. That one of the names mooted to replace Kwarteng is globalist, covid-era bullyboy Sajid Javid underlines the degree to which the establishment is moving in on Truss.
While Truss was not the leader the majority of Conservative MPs wanted — they preferred to replace tainted Boris Johnson with his tainted left hand man-Rishi Sunak — it remains the case that Truss was really barely discernible from many of the other candidates. A former liberal and an opponent of Brexit, while she talked big on tax cuts it was only back to levels known in very recent history, or preventing new tax rises announced by the previous government being brought in.
Real radicals who would have considerably changed the direction of the British government in a new direction like Tom Tugendhat from the left and Suella Braverman and Kemi Badenoch from the right were blocked from making the final cut at all by MPs.
But nevertheless, Truss and Kwarteng did try to move the dial slightly. The reaction to moderate tax cuts was one of abject horror from central bankers, the financial establishment, and the establishment media, the same institutions which waved through colossal and uncosted spending during the coronavirus era without a blink.
To some, Truss and Kwarteng have had the misfortune of being in the wrong place at the wrong time: the exchequer has been mismanaged for many years and now, unable to resist external shocks due to wild spending and borrowing, the hammer blow of Covid-Ukraine is bringing the house of cards down just as they try to start fixing the problem. Allister Heath in The Telegraph — a Conservative Party-adjacent paper — notes, for instance:
For years now, the world economy has resembled a ludicrously high-stakes game of Jenga. Politicians and central bankers kept taking it in turns to remove blocks from the tower, adding them back to the top of the stack and congratulating themselves on their brilliance… While almost everybody else in Britain remained in denial, [Truss and Kwarteng] correctly identified this absurd game for the con-trick that it truly was, warned that it was about to implode and pledged to replace it with a more honest system…
Contrary to the Left’s propaganda, they didn’t crash the economy – it was about to come tumbling down anyway – but they had the misfortune of precipitating and accelerating the day of reckoning. They were outmanoeuvred by better, more ruthless players, and are now incorrectly blamed for all that is wrong with the economy while the real culprits attempt to get off scot-free.
Then again, while Truss does clearly represent a fractionally different course for the Conservatives — one her own party colleagues are pretty loudly rejecting and are even actively plotting against — there is no getting away from the fact the Conservatives have failed, through approaching 13 years of government, to competently manage the national budget, promote growth, and cut the burden of tax on individuals and business.
Brexit’s Nigel Farage, who at the start of the Truss government told Breitbart News that critics should give her a chance to deliver on her rhetoric — and then recanted just days later when it became immediately clear she would not deliver at all — embodies that view, and is calling for wholesale change to save the country. He said Friday:
The big U-turn is coming. Yes, she’s going to reach corporation tax to 25 per cent, to make us completely uncompetitive. [It’s] wholly unconservative. Kwasi Kwarteng will go, all he was doing was following her instructions. She now has no validity. 12 years of Tory misrule. We need a realignment of British politics under a new electoral system. This lot have betrayed us, let us down completely and utterly, we’re becoming the laughing stock of the world.
Whatever happens, one thing is certain now. Whether it was bad timing or incompetence, the fiery end of the Truss era at the hands of the media and financial establishment means — tragically for anyone who recognises the system is deeply broken and needs root and branch reform — the treasury orthodoxy, the blob, business as usual or whatever you want to call it has won and hope for meaningful change is dead, probably for a generation.
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