Liz Truss’s premiership is off to the worst possible start, with the budget sparking meltdown in the economy and the Tory Party, argues Terina Hine
The Kamikwasi budget, as it is now being dubbed, has so far caused a run on the pound, the suspension of new mortgages by some of the largest UK lenders, and the worst headlines the Tories have had for quite some time. The Daily Star provided the most memorable with 'Honey, I shrunk the quids’, and insightfully called Kwarteng a 'fiscal clown’. Now we have backbenchers threatening once again to send letters to the 1922 Committee. This level of chaos, even after adjusting for the Johnson years, is quite an achievement.
It is hard to imagine how Truss’s first three weeks could have been worse: there was the Queen’s death, a snub from President Biden at the funeral, swiftly followed by the much-coveted US trade deal collapsing completely. All hopes of the new administration being scandal free instantly trashed with revelations that Truss’s new Chief of Staff is embroiled in an FBI bribery investigation, is employed by a lobbying firm, and only 'seconded’ to Number 10 in arrangement suggesting tax-avoidance. The final straw was her Chancellor’s mini-budget which has destabilised the economy and crashed the pound to an all-time low.
That the Tories were known for sound economic management was always laughable; now it is beyond a joke.
Tory MPs accuse Truss’s team of being drunk on power, others say the new administration is trying to do too much too fast, in the knowledge that their time will be short-lived. Others still, and not just Sunak allies, claim the newbies simply lack expertise, having sacked the few grown-ups there were in favour of ideologues willing to swear blind allegiance to the new regime. But whatever the cause, the chaos is clear to see.
The new Prime Minister always had an uphill struggle with few supporters among her own MPs, but after the vicious mudslinging during the leadership election, Tory grandees had hoped for a period of calm. No such luck. The Sunday papers reported brewing rebellions, with MPs threatening to vote against the mini-budget. The division between the Tory right and the rest of the party is widening, and the hollowing out of the old guard is continuing with some of the more centrist MPs whispering they will stand down at the next election.
But it’s not just on the backbenches where there is friction. Following the near collapse of the pound, Truss and Kwarteng were at loggerheads over their next move. United for years in their shared ideology, outlined in the now infamous book Britannia Unchained, written when they first entered politics, the crisis has unleashed divisions between No.10 and 11.
In the wider Cabinet, Suella Braverman, Jacob Rees-Mogg and Kemi Badenoch are resisting Truss’s move to relax immigration rules to boost the economy; the hardline Brexiteers are clearly flexing their muscles.
Producing policies unpopular with the City, in order to placate the party, or woo voters, is one thing, but it is quite the hat trick to make a series of policy announcements that have proved unpopular with all Conservative constituents. Barely three weeks into her premiership, Liz Truss is not just facing dire headlines but a backlash from the banks, including the Bank of England, and the prospect of a rebellion among her own MPs. Truss must have had the shortest honeymoon period in history for a new prime minister, regardless that her first week was a reprieve because of the death of the Queen.
The last twelve months have seen the Tories implode; we had partygate, Covid contracts and endemic corruption, followed by a self-indulgent leadership contest which laid bare the deep divisions within the party. Now we have the spectacle of a small clique of right-wing ideologues crashing the markets they claim to hold so dear, and within only a few days of governing, the divisions are apparent even within the clique. So much for Britannia unchained, it’s more like Britannia unhinged.
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