Liz Truss- Where Did It All Go Wrong?

“I am a fighter, not a quitter!” Those were the words of Liz Truss to the Leader of the Opposition in PMQs on 19th October. But keeping with the pattern of U-turns made over her 45-day tenure as prime minister, the very next day she announced her intention to resign from office. In doing so, she broke not one, but two records; one as the shortest-serving prime minister in the history of the UK and second as the least popular prime minister in the history of polling. Exactly how did the former prime minister go from winning the Tory leadership race with a 57.4% majority to being ousted by her own party in under two months?

The mid-campaign blunder that threatened Anglo-French relations

Yet when asked whether the French President Emmanuel Macron was Britain’s “friend or foe” at a Conservative leadership campaign on 26th August, Truss’ answer – “the jury is out” – was met with criticism from both Labour and Conservative politicians as it seemed only to heighten tensions with France, a long-standing military ally of Britain. It was certainly a surprising comment, given the diplomatic skills and knowledge the country might have expected from Truss, who was still Foreign Secretary at the time. 

Liz Truss went on to defeat rival Rishi Sunak to become prime minister in the Tory leadership race. 

But with UK inflation at a 40-year high, the war in Ukraine indirectly driving up energy bills and the country facing a general strike, there was no doubt that the new Prime Minister was facing a monumental task

Parliament’s reaction to the Mini-Budget announcement

It was in this socioeconomic climate that Truss and her newly appointed Chancellor of the Exchequer, Kwasi Kwarteng, presented the fiscal statement of September 2022 to Parliament, announcing billions of pounds in tax cuts that would be funded via borrowing. The plan was met with cross-party condemnation, including from within the Prime Ministers’ own party. The Leader of the Opposition, Sir Keir Starmer, accused the Tories of ‘taking the p**s’ with the tax cut plans and urged Truss to rethink the mini budget after the IMF’s warning that it could have serious negative consequences on the UK’s economy.

It was this that was arguably the beginning of Truss’ downfall. She insisted that the tax cuts outlined were the “right plan” to “grow the economy,” pedalling the ‘fantasy’ of ‘trickle-down economics’; the ideology that cutting the 45% tax on those earning over £150,000 would “help stimulate growth” and be reinvested into the economy, benefitting workers in the long-term. How realistic this  is highly controversial, but with both the IMF and the Bank of England warning against the implementation of the budget, you have to consider whether it was a wise course of action. Once again, the Conservative leadership was ignoring the experts.

Deaf to all warnings and under instruction from Truss, Kwasi Kwarteng insisted that the government would be “sticking to the growth plan”. Meanwhile, Truss, defending the so-called Growth Plan in an interview, insisted that it is wrong to view all economic policy through the “lens of redistribution”, telling Laura Kuenssberg that it was “fair” to reward the richest with £1,800 in tax cuts per annum and the poorest with just £7.66, benefitting highest earners 250 times more than the poorest. 

The devastating impact of the Mini-Budget’s announcement

But Truss’ budget was not to be. The proposed sweeping tax cuts funded by government borrowing sent investors into a panic. Subsequently, the markets went into meltdown, interest rates skyrocketed and the Bank of England was forced to spend £5bn a day for 13 days on buying up government bonds over the threat to pension funds. Within three days, the pound had hit an all-time low against the dollar. 

Truss’ response to this catastrophe? To sack her political soulmate Kwasi Kwarteng and in one of the most astonishing U-turns in living memory, rip up the entire budget that they had designed together in a last-ditch attempt to regain support among her party.

But the damage done was irreversible. Saying “I’m sorry for the mistakes, but I fixed them” as she did in a Guardian interview unfortunately wasn’t going to bring back the additional £537 per month families will now be spending on the average property mortgage or save the pension funds at risk of crashing.

Kwarteng had declined the OBR’s offer to model the effects of the Mini-Budget

It subsequently emerged that the former Chancellor Kwasi Kwarteng refused the Office for Budget Responsibility’s (OBR) offer of modelling an economic forecast based on the mini budget. A  letter from OBR chair Richard Hughes reads as follows:

“We offered, at the time, to update that forecast to reflect the economic and fiscal impact of any policies announced in the ‘fiscal event’ planned for later in the month. We were not commissioned to produce an updated forecast alongside the Chancellor’s Growth Plan on 23 September.”

The fracking vote – chaotic scenes and claims of ‘bullying’ and ‘manhandling’

The last step taken on the ladder towards Truss’ resignation was on the 19th of October when the government forced MPs to break a manifesto pledge and vote to overturn the ban on fracking as Truss’ “solution” to rising energy bills. 

The vote quickly dissolved into chaotic scenes when Tory Ministers were widely reported to have dragged wavering MPs into the division lobby to vote on the side of the Government while colleagues screamed at each other. The reports paint a damning and blasé affront on British democracy. Meanwhile, Prime Minister Liz Truss was seen chasing after her Chief Whip Wendy Morton who had allegedly quit amidst the mayhem, leading to both of them to miss the vote. She later promised to take disciplinary action against Conservative MPs who abstained or failed to vote with the party.

Speaking to the BBC following the vote, Conservative backbencher Sir Charles Walker called “the whole affair” a “shambles and a disgrace”. Speaker Sir Lindsay Hoyle has since opened an investigation into the alleged incidents in the House of Commons that night.

The beginning of the end for Liz Truss

The following morning, Chairman of the 1922 Committee Sir Graham Brady entered Number 10 for an unplanned meeting with Truss amid mounting calls for her to resign. A few hours later, a podium was wheeled out into Downing Street. In an address to the nation, Lis Truss stated that she could not “deliver the mandate” before announcing her resignation.

Despite shattering public trust in Whitehall, crashing the markets and furthering the divide of the classes in the UK, her farewell speech on the 25th of October was unrepentant with no concern or ‘contrition’ shown for the political decisions she made over her 44 day premiership.

Liz Truss – was she worth it?

Ultimately, Liz Truss’ short-lived premiership as Prime Minister was tumultuous at best. Propped up by those who put her in Number 10, she was allowed to run an ill-advised Thatcherist-style experiment on the British economy that crashed and burned before it even began, leaving tens of thousands of households paying higher mortgage bills for years to come, pension funds at risk and our international reputation in tatters. 

Stability from a democratically elected government headed by a leader with a good degree of common sense and a thorough understanding of the economy with empathy for society’s most vulnerable is needed now more than ever.

Image Credit: Flickr