The musical chair being played in British politics, with four prime ministers in six years and a fifth on the way, has become a laughing stock.
The speed and bitterness with which the Liz Truss episode reached its climax are unprecedented in British Politics. “In the office, but not in power,” was the headline of the British tabloid Daily Mail on Oct. 18 to illustrate the tribulations of the British Premier Truss and her acutely debilitated grip on the reins of power. This headline sounded brutal, but it truly reflected the simmering chaos in British politics. The same day, Truss boasted that she was a “fighter, not a quitter.”
She expressed her defiance: "I'm sticking around because I was elected to deliver for this country and that is what I am determined to do." She further bragged that she would lead the Conservative Party until the next general elections. But within less than 24 hours, she tendered her resignation. This also reminds us of a similar statement in July by ex-Prime Minister Boris Johnson in which he expressed his confidence to keep leading the country until 2035, but within one week, he was out of Downing Street.
On Sept. 7, when Truss stepped into Buckingham Palace to have her first formal audience with Queen Elizabeth II, she was ostensibly very confident about the success of her new mantra "low-tax, high-growth" to tackle the United Kingdom's cost-of-living crisis. However, after 38 days, she had to take a humiliating U-turn and scrap key parts of her unpopular economic package in a desperate – but unsuccessful – bid for her political survival.
Truss was elected by Tories and not the broader electorate on a promise to curtail taxes and regulation to bolster the economy in a policy that her critics labeled as a kind of reverse gear to 1980s Thatcherite-style "trickle-down" economics. During her campaign to lure the Conservative Party members, Truss vehemently challenged economic conventions by vowing to abandon tax increases and slash other levies despite warnings from the economists about the possible exacerbation of inflation. But Truss, in a bid to outsmart her rival Rishi Sunak, was continuously predicting that her plan of the tax cut would result in a market rout. This is exactly what has happened in Britain. Truss was not ready for such a spectacular failure of her much-touted ambitious economic framework within weeks. The meltdown was extremely swift – much faster than the expectations of most of the economy watchers. This intensity of rebuke paled the comical embarrassment inflicted upon Johnson in his last days of the premiership.
She appointed Kwasi Kwarteng as chancellor of the exchequer to replace Nadhim Zahawi, in the first week of September, with a clear order to prepare a mini-budget to implement the Truss doctrine. Eventually, on Sept. 23, the Truss government unleashed a new mini-budget in Parliament, intending to cut household taxes and energy bills while driving economic growth. This was certainly the most significant tax cut since 1972, including sweeping slashes to national insurance, stamp duty and top tax rates. According to an overconfident Kwarteng, the proposed mini-budget would comprehensively address three key matters: The energy price guarantee, equal support for businesses, and an energy markets financing scheme – apparently very much consumer-centric. The plan further entailed cutting the lowest income tax rate from 20% to 19% and reducing the highest rate from 45% to 40%. A very ambitious but ill-advised package actually started rocking the boat from the day. By introducing lucrative tax cuts and energy price freeze, Kwarteng expected to inject a booster into the U.K.'s recession-threatened economy, but it worked the other way around and as traders warned of swelling debt to pay for the incentives.
Just after the budget, the U.K. government bond yields soared beyond controls and on Sept. 26, the pound hit a record low at $1.035 due to unfunded tax cuts. In a highly unusual and unprecedented intervention in recent history, the International Monetary Fund (IMF) mused loudly that it was "closely monitoring" developments and urged the Truss government to change tack. The very next day, the Bank of England (BoE) was compelled to intervene to uplift market confidence in the U.K. after the IMF's critique of the U.K.'s budget-related problems. It further pushed the BoE to announce a temporary bailout in the form of buying up 65 billion pounds ($73 billion) worth of long-dated U.K. government bonds "to restore orderly market conditions."
Truss, trapped in a serious delusion about her economic plan despite the stupendous chaos in the market created by her mini-budget, kept defending this masterpiece of economic ineptness. But she had to retort to an embarrassing U-turn by reversing all the key features of her economic package and sacked one of her favorite ministers Kwarteng in a rather un-ceremonial manner immediately after his return from Washington, where he was attending meetings with the IMF. The arrival of Jeremy Hunt as the new chancellor of the exchequer practically stamped the death certificate of Truss's economic vision. For obvious reasons, after losing the main plank of her economic doctrine, she was forced by the circumstances to adopt the economic proposal of Sunak, who has tasted vindication and is now enjoying the "I-told-you-so" moment.
The chastened Truss was facing two acute problems: One, how to avert further damage to her leadership after handing over the complete charge of an economic strategy to Jeremy Hunt, another possible aspirant for the coveted post, and two, how to muffle the simmering revolt among the Tories against her inept handling of the government affairs. Truss's resignation followed a sweltering 24 hours of Conservative turmoil. The then-Home Secretary, Suella Braverman, was sacked after a squabble about looser immigration controls, which instigated a backbencher revolt in the Conservative party, resulting in the culmination of the Truss regime.
The circus is not over yet. Two parallel campaigns are now being witnessed: One, the highly optimistic Labour Party's aggressive demand for immediate general elections, and two, a leadership race within the Conservative Party to replace Truss. There is little doubt that the disarrayed leadership of the Conservative Party has pushed the country into a quagmire of political and economic instability. The only plausible solution is immediate elections. Almost all the opinion polls suggest that, as a result of continuous political mayhem and economic instability, the Conservative party's popularity has been significantly eroded, and the Labour Party, being untested for almost 12 years, is in a strong position to sweep the elections if held today. So, the intensity of the Labour Party's desperation for immediate general elections is quite justified. They want to hit now when the iron is hot and red. "The Tories cannot respond to their latest shambles by yet again simply clicking their fingers and shuffling the people at the top without the consent of the British people. We need a general election – now," roared Keir Starmer, the Labour Party leader, who is exceedingly confident about his party's success.
In the coming days, the Labour Party will keep mounting the pressure for immediate elections and there is every likelihood that they would be able to generate enough momentum among Britain, who now consider the Tory leadership as the main culprit for the cost of living crisis. The mishandling of economic matters, in addition to the unabating political instability, has pushed the Conservative Party on the back foot. In view of the remaining, most of the Conservative MPs would not favor early elections; they have two more years of legal tenure and their jobs are at extreme risk in case of immediate elections.
So the focus of the Tory leadership will be to find a new face for the top slot. Rishi Sunak, who gave a rather tough fight to Truss earlier for the party leadership seat, will certainly throw his hat in the ring, and so will the House of Commons leader Penny Mordaunt.
However, there is every possibility, as evidenced by growing murmurs among the Tory MPs, Johnson is also planning to reenter the fray. Johnson, not a stranger when it comes to showing absurd tricks in the political circus, may come forward as a surprise package. So, interesting developments are expected in British parliamentary democracy in the coming days.
