What’s behind Truss’ downfall and the UK’s political instability?

Barely six weeks after Liz Truss stood outside Number 10 Downing Street upon becoming prime minister and said “together we will weather the storm“, the waves finally overwhelmed her.

In her 45 days in office, her central economic plan was ditched, she lost two senior ministers, her poll ratings nosedived, her authority was destroyed, her parliamentary party rose in mutiny, and the UK’s international reputation was left in shreds.

All this despite a large government majority and a desire to turn the page on the rollercoaster ride under Boris Johnson’s premiership.

How did it come to this?

A ‘bold plan’ blows up big time

She took office promising to “deliver a bold plan to cut taxes and grow our economy”. But when Liz Truss and Kwasi Kwarteng threw caution to the wind, it whipped up a hurricane.

The ex-finance minister’s “mini-budget” pledged billions of pounds of unfunded tax cuts, with no accompanying independent analysis to reassure the markets. Duly “spooked”, they in turn sent the pound tumbling and borrowing costs soaring. The Bank of England intervened to limit the damage.

Several piecemeal U-turns proved inadequate — until the sacked Kwarteng’s replacement Jeremy Hunt reversed virtually the entire plan. 

“We went too far, too fast”: both Truss and Hunt used exactly the same wording in their analysis of what went wrong, in what cynics might describe as a rare outburst of cabinet unity.

Even some of the ex-prime minister’s critics agree that she had identified chronic underlying problems with the British economy, such as stagnant growth, that need tackling.

There were also been hints of warmer relations with the European Union, including what Ireland’s foreign minister welcomed as improved “mood music” in the approach to disputed arrangements for Northern Ireland

“The blossoming of warm words in recent weeks and the participation in the EPC (European Political Community) meeting in Prague did show she (Truss) could move away from Johnson’s reflexive ‘say no to anything with the word ‘Europe’ in it’ approach, without losing party support,” Simon Usherwood, Professor of Politics and International Studies at the Open University, told Euronews.

“The mini-budget crowded out anything other than economic policy and it is that which has done for her.” 

‘Abacus economics’ and ‘Treasury orthodoxy’

On the summer campaign trail, Liz Truss repeatedly promised tax cuts “on day one” of her premiership as she took to task established financial institutions. 

“This whole language of unfunded tax cuts implies the static model, the so-called ‘abacus economics’ that the Treasury orthodoxy has promoted for years, but it hasn’t worked for our economy,” she told one hustings event in Birmingham in August.

When Kwarteng announced his “Growth Plan” on September 23, the shortlived finance minister said triumphantly that it delivered on promises “to release the enormous potential of this country”.

But in the mini-budget’s own words, the “biggest package of tax cuts in generations” left to a later date how they would be “finalised and accounted for”, instead putting faith in vague benefits that were “expected to result”.

Economists, and more importantly the markets, recoiled in horror. They insisted that sums must add up.

Legal blogger David Allen Green described the budget plan as “a form of magical thinking”, drawn up by an administration driven by “nothing else” but ideology.

“There is no engagement with the real world as it is, and no understanding that there is even a real world outside with which to engage. The fundamental elements of their political vision are different and strange: this is Narnia, this is Oz, this is Wonderland, this is Neverland.

“We can enter their world, but they have no notion of ours.”

Out with experts, in with loyalists

The UK’s Institute for Government held a panel discussion on 17 October entitled: “How not to run a government: the lessons from Liz Truss’s first 40 days.” 

An early theme was Liz Truss’ relationship with the UK’s Civil Service. Notably, her sacking of the Treasury’s most senior official Tom Scholar came despite warnings that his experience would be needed.

Another controversial appointment was that of Mark Fullbrook, a political strategist and lobbyist, as the now former prime minister’s Chief of Staff.

Jill Rutter of the think-tank UK in a Changing Europe and the institute’s former programme director, said the current saga was not the first time a government had run into trouble with a mid-term change of prime minister.

“One of the big criticisms of Boris Johnson’s government was that it was a campaigning government and had never cracked how to govern,” she told the panel. 

“And yet Liz Truss appoints as her chief of staff somebody who is a campaigner, not somebody with any experience of government, and you would have thought one of the lessons you might have taken out of the Johnson years was you actually need some people who know how to make the machine work properly.” 

A striking feature of the ex-prime minister’s initial cabinet was the strong presence of loyalists who had backed her for the premiership. It was thought this might cause problems with Conservative MPs, only a minority of whom had voted for her.

“Both the Johnson and the Truss cabinets I think show that people in a sense learnt a bad lesson from Theresa May’s travails, which was that you cannot afford a split cabinet as a recipe for stasis and paralysis, and you therefore have to pack your cabinet with your loyalists,” said Jill Rutter.

“I think people do need to be able to create cabinets that reflect a wider balance of views in the party.”

Tory members v Tory MPs

Although former finance minister Rishi Sunak topped the polls of Tory MPs in the leadership contest, a significant factor in the last round of voting that propelled Truss into the run-off was her popularity with the party’s grassroots.

Throughout August she systematically batted away the warnings from Sunak and others about her tax-cutting plans — and ultimately the members backed her.

“The use of a party member vote for Truss was as good as it ever could have been and MPs don’t hold it against her that she came to power this way,” Simon Usherwood told Euronews.

“Yes, it creates problems with public opinion (especially when Labour prod the point repeatedly), but the only way it has obviously hurt her internally was that there wasn’t the protection of a manifesto pledge to push back against MPs.” 

But to what extent does this small “selectorate” of Tory members — described in the New Statesman by columnist Rory Scothorne as typically “over 50, male, rich and right wing” — chime with the public at large?

“The views of Tory party members are really quite different to the views of Tory party MPs, and Tory party MPs are nearer the views of Tory party voters, which I think is really quite an interesting thing about the way in which leaders are selected by the Conservative Party,” said Jill Rutter, citing research by UK in a Changing Europe.

Scothorne argues strongly in favour of parties being governed by their members, citing “the most vital contribution that parties, as large organisations full of ordinary, unelected people, make to democracy”.

But former Tory leadership candidate Rory Stewart, who is no longer with the party, believes that allowing the membership to elect the party leader was a problem for both the Tories and Labour — whose former leader Jeremy Corbyn was also at odds with his backbenchers, and in 2019 led the party to its biggest electoral defeat for decades.

“There is nothing democratic about paying money to join a political party. It doesn’t matter whether you’ve got 100,000 members or 500,000 members, it’s not democratic. At least the MPs are elected, they have some kind of democratic mandate,” he said in his joint podcast with Tony Blair’s former press spokesman Alastair Campbell on October 14.

“MPs voting for a prime minister is the traditional way… it makes some kind of democratic sense. But the parties doing it is what produced Jeremy Corbyn, it’s what produced Boris Johnson, it’s what produces Liz Truss, and it’s a very, very bad system.”

Brexit: the elephant in the room?

Liz Truss continued the party’s eurosceptic tone of recent years during her leadership campaign, promising to pursue legislation to ditch Brexit deal arrangements on Northern Ireland and to scrap all remaining EU laws that still apply in Britain.

She and other Conservatives have often spoken of making the most of Brexit’s “opportunities”, while for Labour it is now about “making Brexit work“.

“Brexit is ‘done’ for many British politicians, so it’s not the livewire it once was,” says Simon Usherwood. For many critics, the UK is failing to face up to the increasing evidence of the damage it has caused.

On Tuesday Ryanair boss Michael O’Leary described the economic situation in Britain as a “car crash” caused by the country’s vote to leave the European Union in 2016.

“The mini-budget was a kind of spectacular failure of the whole concept of Brexit,” he said. “She (Liz Truss) got elected by appealing to all the Brexiteers for the last three months and it is the ultimate, I think, failure of Brexit and the Brexiteers.”

His view was echoed on Thursday by the EU’s former Brexit negotiator Michel Barnier.

“Not all (the UK’s) difficulties are due to Brexit, I am simply convinced that Brexit makes everything more difficult,” he tweeted.

“How can a government keep doing so much damage? The answer for the recent budget is not difficult to find, but it all ultimately comes back to Brexit,” wrote the economist Simon Wren-Lewis in a blog in early October.

“As I have often stressed, Brexit was an excellent sorting device. Those politicians who followed the evidence lost out, and those that ignored evidence got into power.” 

Divisions over Europe had plagued the Conservative Party even before Margaret Thatcher was ousted in 1990, and have continued ever since. 

Over the past decade, the Brexit wars have overshadowed the premierships of the country’s growing list of leaders — from Cameron to May to Johnson to Truss — and the party is still riven by rival factions as it now turns to choosing her successor.