Lindsey German on the Tory shock-and-awe implosion and the action plan our side needs

Liz Truss and Kwasi Kwarteng have achieved something unique: they are the first prime minister and chancellor to be utterly discredited and even to have their political obituaries written within weeks of taking office. Even more remarkably, two of those weeks saw politics in abeyance following the queen’s death. So practically as soon as they did anything, they managed to crash the economy, cause fear over mortgages and pensions, and slump in the opinion polls. Truss claims that she is sticking to her original plans but that isn’t going to happen. The Bank of England is spending an incredible £65 billion to avoid a crash of pension funds, but there are already fears on the money markets about what happens when the BoE intervention ends later this month.

The sense that Truss hasn’t much contact with reality has been confirmed by her chancellor’s budget, which is justified by them in terms of growth but will only be able to achieve this through impoverishment of millions, further attacks on trade unions, environmental destruction and allowing the rich to get even richer. Even then the state of the British economy is such that the predicted growth is unlikely. Big increases in mortgage payments will lead to falling house prices, negative equity and increases in rents from private landlords. The upset to the casino economy which is the housing market will hit those renting and younger people on big mortgages very hard.

Comparisons with previous tax-cutting booms don’t look promising and a crucial difference this time is the hostility coming from the Bank of England and the money markets, from large sections of the capitalist class and from the political establishment, including many Tory MPs. Whoever thought it a good idea to elect a new prime minister on the votes of Tory members, overwhelmingly old and well off, and against the wishes of the majority of MPs, must now be having second thoughts.

Truss’s car crash interviews on BBC local radio were also evidence of her weakness, as presenters asked forceful but reasonable questions that she could not answer. Her default position was to blame it all on Putin’s war and to claim that she had stopped people worrying about their energy bills. All the budget achieved however was to make people worry about housing, pensions, food prices, as well as energy prices (which will still be at least double those of a year ago). And energy prices were rising before the war, while it is hard to see how the Russian leader could be responsible for crashing the pound.

There are no easy solutions for Truss. There is a lot of talk of delaying or even reversing the tax cuts, especially the top rate cut, which even many of those who would benefit from it are against, but that would almost certainly see the end of Kwarteng. Instead the desperate duo are talking about further cuts in public spending. This will yet again hit the poorest hardest – especially as one proposal is not to upgrade pensions and benefits in line with inflation. But it will also hit every public service, already struggling with over a decade of austerity and now facing inflationary costs for heating buildings. It will mean further closures of libraries, cuts in wages and jobs, and cold schools, hospitals and care homes. Even many Tory voters use these facilities – hence the dramatic fall in support for the party in recent days.

Which explains the dramatic rise in Labour’s fortunes over the past week. According to a number of polls, Keir Starmer’s party is on course to beat the Tories decisively and even to form a majority government. These numbers have much less to do with any positive appeal from Starmer than it has to do with revulsion at the Tories. Indeed some polling details show no substantive increase in those intending to vote Labour but rather a slump in those planning to vote Tory, including many who did so in 2019. Still, this means that for the first time Starmer looks as though he could win, and this coincided with the party’s conference which therefore ended on a high note.

Let’s think a little about what this means however. He has spent the past two years savagely attacking the left, many of whom voted for him, and suspensions of left delegates took place on the eve of conference, including that of newly-elected NEC member and Jewish activist, Naomi Wimborne-Idrissi. The conference itself was drenched in flag waving and patriotism, including opening with a rendition of the national anthem. A delegate who dared to criticise Nato and sending arms to Ukraine was booed and heckled and then summarily suspended. Starmer has made clear since the war began that any such criticism is verboten in Labour. So uncritical support for an escalating war will continue.

In terms of economic crisis, Starmer has no intention of standing up to the money markets and hedge funds. His whole argument is that Labour would be fiscally responsible in a way that Truss is not. Faced with a worsening economy, he will implement cuts, insist that everyone has to sacrifice and that we have to ‘balance the books’. In periods of acute crisis (and we are in the middle of one) the ruling class turns to its plan B – a Labour government in the hope that workers will accept conditions of austerity better in these circumstances. There are still many doubts about whether Starmer can deliver the goods or has any ideas, but faced with the Truss alternative, large sections of the ruling class will prefer him. It never is totally sure with a Labour government, but now it has defeated Corbynism in the most brutal way, it will take the chance.

It’s remarkable then how much of the Labour left found his speech at conference so positive. His modest proposals for a publicly-owned energy company are hardly a threat to capital. And whatever he can propose in terms of decent policies should be put into the overall context of his witch-hunting and warmongering.

The solution to the crisis can only lie with working class people taking action themselves and forcing back the attacks on them which are going to intensify. The increase in strike action is a welcome sign but needs to be built on much more systematically and turned into a political strike against the government. The protests are growing and the past weekend has seen thousands out on the streets. Again we need to see much bigger numbers in the coming months and a real focus for the People’s Assembly demo on 5 November and protests at the chancellor’s next foray into a budget on 23 November. The scale of attack on us requires a major response which can get rid of the Tories but also ensure that whoever follows them does not continue their dirty work. That means very big movements but also the growth of the organised socialist and Marxist left. The time to organise is now.

This week: I will be helping organise to get the vote out for the UCU strike ballot at my university, and will also be demonstrating by surrounding parliament in support of Julian Assange on Saturday 8 October.