The political and economic consequences of Liz Truss

12 months after her shambolic premiership commenced, we look at the lasting impact of our shortest-serving PM’s disastrous attempt to remould Britain into a low tax, deregulated economy.

Right-Wing Watch

Liz Truss. A political figure you are probably trying to forget, but a reminder that the short-term actions of politicians can have long-term outcomes. She was the prime minister who started her No 10. tenure on September 6, 2022, and oversaw a catastrophically unfunded, tax-cutting ‘mini’ budget, which cost the country a staggering £30bn. She then set about making a series of screeching U-turns and abandoned her entire policy programme, as she battled to settle the market meltdown and save her own skin.

In refusing to appoint anyone into government who had not supported her campaign, Truss was left with a very limited pool of talent. This childlike pig-headedness came back to bite her, sooner perhaps than anyone could have imagined. Within weeks, she had fired the two most senior positions in government below her – her chancellor and home secretary.

Such dismal political decision-making, and a self-mutilating mini-budget, which removed limits on bankers’ bonuses, and, most controversially, abolished the top rate of income tax in the middle of a cost-of-living crisis, meant the country was plunged to the brink of recession in less than a month. Calls quickly mounted among her own MPs for her to go. And there was no place left for Truss to go other than the infamous podium outside No 10. to announce her resignation. The podium, incidentally, was commissioned by Truss at a cost of £4,000 and has now itself been ejected from No.10.

The incredible speed of the collapse of Truss’ government- a mere 49 days – is unparalleled in modern times. Being the shortest-serving PM in the history of the UK, the Thatcherite flag-bearer of the Eurosceptic right-wing of the Conservatives, who was once a centre-left Liberal Democrat, and who, in 2016, campaigned to Remain, confirmed that the chameleonic nature of the Tory party which once helped guide it to electoral success, had become its own worst enemy.

12 months after the commencement of the utter shambles of Liz Truss’s premiership, and the question remains as to just how much the Tories, and the country, are still feeling the effects of a PM who imploded after less than 50 days in office?

‘Trussterfuck’ and an impending general election wipeout

After suffering a disastrous defeat in the local elections in May, several dismal by-elections, and with the polls regularly pointing to a strong Labour lead, it is widely expected that the Tories are on course for a shattering defeat at the next general election.

Despite promising to restore calm and cleanse the party’s chequered reputation, Truss’s successor, Rishi Sunak, is failing to draw a line under what some Tory MPs refer to as ‘Trussterfuck,’ which they believe will cost them their seats in the forthcoming general election.

But pinning the Tories’ nosediving electorate support solely on one calamitous Tory PM might be a bit unfair, as let’s not forget that Truss’s predecessor’s reign was also marked by incredible chaos and scandals on epic proportions. As Politico reports, one thing most Tories agree on is that their past two prime ministers did them little favour heading into the next general election.

Speaking of the Conservative wipeout in the May elections, former Tory minister Tobias Ellwood said: There was certainly a punishment exerted on the Conservatives for what’s happened over the last couple of years. We’ve breached trust because of Boris Johnson and Liz Truss, and that was reflected in the results.”

Even the Conservative press have been delivering some grim realities on the party. ‘The Tories are in a death spiral – and only have themselves to blame,’ splashed the Telegraph, in a piece penned by ConHome deputy editor Henry Hill.

Hill notes how looking more stable than Truss was not a difficult bar for Sunak to clear, nor was seeming less sleazy than Johnson. “Although the Prime Minister needlessly messed that up by signing off on most of his predecessor’s resignation honours list, ensuring he has to carry the can both for a string of damaging by-elections and the elevation to the House of Lords of people who broke lockdown,” he writes.  

Meanwhile, the Times’ home affairs editor Matt Dathan spoke of how a ‘Delusional Liz Truss could cost Tories next election.’ Dathan’s op-ed was in response to 4,000-word article Truss had written for the Telegraph earlier this year, in which she attempted to defend her tax-cutting, ‘growth’-driven agenda.

Finally breaking her silence on her 49 days in power, Truss blamed a “very powerful economic establishment’ and implicitly criticised Sunak for increasing taxes as chancellor. But as Dathan notes, Truss’s ‘comeback’ sparked a fresh Tory party civil war by claiming she was ‘never given a ‘realistic chance’ to implement her radical plans.’

But as rebellious, bickering Tories remain largely divided on what they can do to bolster their heavily dented reputation following the catastrophe of Sunak’s two predecessors, and factions of Tories are still pushing for the PM to embrace Truss’s brand of free market economics, the pressing question remains – how much of a lasting impact has Truss’s disastrous attempt to revive Thatcher’s libertarian economics had on ordinary people struggling with a cost-of-living crisis?

The mini-budget and mortgage chaos

One year on after Truss took office and mortgage rates have hit a 15-year high, inflation remains uncomfortably high, and the growth the UK’s shortest-serving PM promised is nowhere to be seen, as millions fret about how they will afford their bills when winter comes.

After criticism that the Tory government was ‘rudderless’ in the face of soaring inflation, Liz Truss promised to make tackling the cost-of-living crisis her number one priority if she became PM. Recession is ‘not inevitable’ she had said as she pushed to stand out in the crowd of hopefuls during last summer’s Tory leadership campaign.

Instead of helping Britons tackle soaring living costs, Truss, together with her chancellor Kwasi Kwarteng, managed to do the exact opposite.

The sweeping tax cuts announced by Kwarteng triggered investor panic over the future health of the UK economy. The mini-budget (called ‘mini’ instead of just ‘budget’ to avoid scrutiny by the Office for Budget Responsibility) prompted a sharp fall in the value of the pound and drove up government borrowing costs.

The Bank of England was forced to step in with a £65bn emergency bond-buying programme in an effort to quell a market meltdown, which risked draining pension funds of cash and leaving them at risk of insolvency.
Amid Truss’s chaotic policymaking, jittery Tories were quick to pin the blame on the Bank of England’s leadership. Jacob Rees-Mogg was among a number of senior ministers in Truss’s cabinet to blame Bank chief Andrew Bailey for the market chaos, saying he should have hiked rates faster.

Meanwhile, homeowners bore the brunt of the catastrophic mini-budget, as, because of the resulting chaos it ignited within the financial markets, the mortgage market became especially turbulent. Lenders increased rates on both residential and BTL mortgages rapidly with very little notice. Facing higher mortgage repayments, landlords passed costs onto tenants, putting additional financial strain onto people already struggling to pay for rising energy costs, and other essential household bills.

With rents growing at a much faster rate than people’s incomes, the Mayor of Bristol, Marvin Rees, described tenants in his city as facing a ‘Wild West market.’

In June, the situation became even worse, when a number of lenders upped rates again in response to the Bank of England’s latest interest rate rise. As of August, interest rates stood at a 15-year high after the Bank of England raised the base rate for the fourteenth consecutive time from 5% to 5.25%.

As the finger of blame over the relentless financial turmoil resulting in rising living costs for everyday people continues to wag, some experts believe Liz Truss’s policymaking, namely the disastrous mini-budget, continues to bear responsibility.

Dr Jeevun Sandher, of the New Economics Foundation, a UK think-tank which promotes social, economic and environmental justice, says: “We are all still paying the price for the Truss mini-Budget.” Inflation had also surged because “a decade of under-investment in energy and insulation.”

Responding to the June interest rates hike which led to some of the best mortgage deals being withdrawn at just a few hours’ notice, David Hollingworth, an associate director at broker L&C Mortgages, advised borrowers to ‘grab it [a deal] while you can.’ He pointed to Truss’s mini-budget and handling of unfunded tax cuts that led to rates soaring.

Hollingworth also said one of the major consequences of the mini-budget was the “damage done to consumer confidence,” and that “disengaged borrowers” would “take time to come back to the market.”

Jo Breeden, managing director of Crystal Specialist Finance, said the buy-to-let market was still “reeling” from the mini-budget due to interest coverage ratio (ICR) struggles. Breeden noted that rental incomes were struggling to “keep pace” with rising mortgage repayments.

As house prices drop to their steepest annual fall since 2009, Iain McKenzie, CEO of the Guild of Property Professionals, warns: “The volatility in house prices continues with the steepest drop since the disastrous effects of last year’s mini-budget’ began to unravel.”

Right-wing think-tanks continue to shape government policy

As the economy – and hearts of many Tories – sank in the wake of the disastrous mini-budget, one of the few groups that were happy with it were the neoliberal right-wing think-tanks. They had spent years advocating the libertarian economic policies Truss was pushing out.

Following Kwarteng’s mini-budget announcement, Mark Littlewood, director general of the Institute of Economic Affairs (IEA), said the ‘UK’s original free-market think-tank,’ rejoiced. He called the budget “refreshing.” “If this was the Chancellor’s ‘mini’ budget, I look forward to the ‘maxi’ budget,” he said.

Tim Montgomerie, a former speech writer to David Cameron, tweeted that the budget was “A massive moment for @iealondon. They’ve been advocating these policies for years. They incubated Truss and Kwarteng during their early years as MPs. Britain is now their laboratory.”

With right-wing political figures making such bragging statements, concerns surfaced that Truss had effectively handed power over to extreme neoliberal think-tanks, and her links to such groups became widely known. Left Foot Forward reported that from founding FREER, the parliamentary wing of the IEA in 2011, and hiring its former communications director Ruth Porter to run her campaign, later rewarding her by making her deputy chief of staff, Truss was closely connected to the same think-tanks that had influenced Thatcher’s policies. 

Ironically, the calamity of Truss’s premiership may have killed off any dream of a low-tax, deregulated UK economy, at least for a generation. Daniel Pryor, who works at the right-wing Adam Smith Institute and lobbies for governments to shrink the state and cut taxes, laughs at the bitter irony.

“I now expect the language of free markets and libertarianism to be consigned to scrap for quite some time. I am sober and realistic about that,” he said.

‘Trussonomics’ might have been ditched, and with it any chance of a Thatcherite economic revival, but, worryingly, it seems that the right-wing think-tanks which influenced Truss got a taste for shaping government thinking and are still moulding Conservative policy today.

In June, Rishi Sunak admitted that Policy Exchange, the right-wing think-tank that received funding from US oil giant ExxonMobil, had helped the government write its draconian anti-protest laws. The admission was made during a speech at Policy Exchange’s summer party, when Sunak confirmed the think-tank’s brief “helped us draft” the government’s crackdown on protests, as Politico reported.

At the height of the Liz Truss madness, in October 2022, the Liberal Democrats published a dossier on the former PM’s legacy, showing the damage done to the country during her 49-day premiership. Their analysis revealed that over 932,000 people had seen their mortgages rise due to the government’s botched mini-budget, while the number of people on NHS waiting lists grew by 170,000.

Almost 12 months on, and, under yet another Tory PM, the same problems continue to hound the people of Britain. NHS waiting lists have hit a new record high despite a pledge by Rishi Sunak to bring them down, while mortgage rates have soared to highest level for 15 years.

How much we can blame Truss for Britain’s continuous woes is by no means clear cut and her legacy 12 months on is still fiercely debated among Britain’s commentariat, left and right. But one thing is for sure – she did neither the Conservative party nor the country any favours. The Tories we can live without. But inflicting damage on the country is unforgiveable.

Right-Wing Media Watch – The craziest Truss-gushing headlines

Forgive me for Liz Truss overload, but it is the ‘anniversary’ week after all, and therefore a fitting time to relive some of the maddest – and maddening – headlines pushed out by a media who supported her, and, to some extent, still do.

Daily Telegraph – ‘By ejecting Truss, the Tories gave up all hope of winning the next election’

This column in the Telegraph was written by Andrew Lilico, an economist, journalist, blogger, and wait for it… a fellow and member of the Advisory Council of the IEA – says everything. He argued that she may have failed, but the former Prime Minister at least attempted change. ‘Voters will not reward the party for just treading water since,’ Lilico continued.

He’s right on two accounts though: Liz Truss failed, and the Tories are unlikely to win the next general election. Whether it’s because they ejected Truss is dubious. Because they [party members] voted for her in the first place might be more accurate.

Daily Mail and Dan Hodges

On her appointment as PM, the Mail, which had endorsed Truss throughout the Tory leadership contest, was quick to announce to readers how the contest had served Liz Truss ‘and the nation’ well.

The column was penned by right-wing columnist Dan Hodges. Like the Sun, amid Tory jitters about Truss and the devastation her unfunded tax cuts were inflicting on the country, the Mail was also quick to backpedal on Truss.

Just weeks after his ‘the contest served Truss/nation well’ comments, Hodges wrote another column warning, Truss will ‘consign her party to political oblivion,’ if she doesn’t change course.

Oh, the hypocrisy.

Express – Truss eyes shock comeback

The former PM’s silence breaker in January when she penned a lengthy piece in the Sunday Telegraph on ‘what happened last autumn,’ sparked a wave of commentary. For right-wing Truss-supporters in the media, it was their chance to hail it as a ‘comeback.’ And joining the ‘comeback’ chorus was the Express.
‘Truss eyes shock comeback as she ‘remains determined to rouse UK from economic woes,’ shouted the right-wing tabloid.

The Express, in fact, was one of the few newspapers that stuck to its guns on Liz Truss even when the market was sent into meltdown last autumn and others changed their tune on her.

‘Liz Truss defends her tax cuts which allow Britons to keep more of their hard-earned money,’ splashed the tabloid last October.

The Sun – ‘Liz Truss is the radical Prime Minister we need for the crisis engulfing Britain’

When Truss was named PM a year ago, the Sun heartily congratulated her, running this headline:

Interestingly, but perhaps unsurprisingly given the fickle nature of the right-wing newspaper, within weeks, the Sun had had a change of heart. ‘Truss in the Boot?’ was a headline on October 13, which spoke of ‘mutinous MPs openly discussing the PM’s removal ‘after just 38 days in office.’

Last month, the same newspaper went a step further, with this headline! 

Talk about chameleonic Tories, what about its chameleonic press?

Woke bashing of the week – Canada’s ‘woke nightmare’

Moving on from Liz Truss, if there’s a political figure the Right love to hate – other than Jeremy Corbyn – it’s Justin Trudeau. When the Canadian Prime Minister secured his third electoral victory in 2021, putting him on course to be the longest-tenured progressive leader in the wealthy world, the populist and even liberal media would have had you believe it was a defeat. “Justin Trudeau’s Early Election Gamble Backfires,’ declared a CNN headline, almost gloating that the PM only won a few more seats and must continue to rely on the (left-leaning) New Democratic Party to govern.

But the media has a proud tradition for discussing the Liberal Party leader’s alleged weakening appeal. In August 2019, The Guardian’s Canada correspondent authored a feature entitled: “Justin Trudeau: The Rise and Fall of a Political Brand.”

This summer saw the right-wing press up their assault on the prime minister who has overseen a booming Canada, with record-low unemployment, unprecedented population growth, a world-beating stock market since 2021, and the most diversified economy in its 156-year history, all while making managing to show his fellow citizens the benefits of immigration.

The British right-wing media has joined and inevitably amplified the anti-Trudeau chorus, which is to be expected.

‘Is the game up for Justin Trudeau?’ sensationalised The Spectator.

Meanwhile, the Telegraph went a step further, using the Liberal leader’s progressive policies as a slur on wokeism.

‘Canada’s woke nightmare is a vision of Britain’s future,’ was the title of a comment piece by journalist Steven Edginton, who incidentally was poached by the Sun to apparently ‘beef up their video output,’ and was once the chief digital strategist for the Brexit Party.

‘Drug decriminalisation, gender ideology, legal euthanasia – the country seems to have adopted every policy on the progressive wish list,” writes Edginton, who has set about making a Telegraph documentary on how Canadians are dealing with Trudeau’s ‘radical reforms.’

Judging by the journalist’s woke-deriding article, the documentary appears to be incredibly biased against modern Canada and its current prime minister. It speaks of Canadian schools facing a ‘fierce backlash’ from parents for the so-called promotion of transgenderism. It takes aim at the country’s ‘mass legalisation of drugs,’ pointing to Vancouver being ‘patrolled by roaming zombie-like drug addicts.’

Unsatisfied with just one ‘woke’ jibing article against the Canadian leader, several days after Edginton’s piece, the Telegraph published another article claiming, ‘Canada is at the forefront of the woke assault on our essential liberties.’  

In the 2,300 word essay, Jordan Peterson, a Canadian psychologist, who has previously been triggered by paper towel dispensers – yes really – claimed his freedom of speech is under threat by Justin Trudeau’s government.

I won’t bore you with the details, other than the column is another nonsensical rant made by another right-wing commentator who seems to have too much time on his hands and loves to hate political figures bringing positive progressive change.

No change there then. Sadly.

Gabrielle Pickard-Whitehead is author of Right-Wing Watch

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