Something old, something new: the legacy of Liz Truss

“Traumatic events bequeath traumatised legacies”, a perfect phrase to describe the last few months in British politics. The wider impact of the Johnson era and the Truss hiccup should be discussed not just for the sake of the nation but for the nation’s stature on the world’s stage. With prime ministers toppling and the experience of watching an economy on the edge, this year will be a cautionary tale for years to come. Government implosions of this magnitude will definitely be seen as “never again” moments in British politics, let alone the Conservative Party – of that I can say with confidence.

There may be further convulsions as Sunak takes his place. Even if he does not, these months will leave searing effects as we endure a form of post-traumatic stress disorder and the scrutiny that Number 10 will face will be microscopically analysed. The scars left will no doubt shape the next administration but perhaps the next few years in long and unexpectedly powerful ways.

But before we welcome the next Prime Minister to Downing Street, one can’t help but ask: where did Liz Truss go wrong? Would she have ever worked as Prime Minister or was she just another Thatcher idoliser gone wrong?

Various commentators have identified “fantasy economics”, the pursuit of ideology over pragmatism and the ongoing fallout from Brexit. This article will explore each term in turn to give you an outline of the challenges this nation has faced in the last few months.


“Fantasy Economics”

When Truss took office, she promised to “deliver a bold plan to cut taxes and grow our economy”. Unfortunately, the combined effort of Truss and Kwarteng instead whipped up a hurricane they could not recover from.

The ex-Chancellor’s “mini budget” pledged more than £2 billion of unfunded tax cuts with no accompanying reassuring independent analysis for the markets. As a result, it sent the pound tumbling and borrowing costs rose so much that the Bank of England had to step in to mitigate the situation.

After several significant U-turns, most notably on lowering the 45p tax rate for highest earners to 40p (especially in a time of great economic struggle due to the energy crisis), Kwarteng was ultimately sacked and his replacement virtually reversed the entire vision.

“We went too far, too fast”, Jeremy Hunt said when asked what went wrong, in what critics may describe as a rare show of unity in a time of dissent.

While many members of the British public will only remember for the mini budget having crowded out her economic policy, we should give credit to her cabinet’s identification in chronic underlying issues within the British economy. Problems such as stagnant growth and the need for further industrialisation within the economy needed to be recognised and thus, while her “fantasy economy” did not fare well for her, her successors may benefit from her cabinet’s foresight.


Ideology vs Pragmatism

Liz Truss is an idealogue by heart and that has definitely driven 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’s been quoted saying.

With that in mind, her mini budget, which in the government’s own words, was the “biggest package of tax cuts in generations”, put faith in vague benefits that had no solid foundations in expected results. Markets recoiled in horror and as a result, the abacus economics that she insisted needed to be defied ultimately became her downfall.

There was no engagement with the real world as it was and the budget plan was a “a form of magical thinking” as legal blogger David Allen Green described. Truss’ administration was ultimately fuelled by ideology and unfortunately, the state of world affairs did not give her the room to execute what she would have deemed a perfect legacy.

Truss’ administration brings about the question, where does the line between party values and real-world engagement lie? Is there room to be fully dedicated to your party’s values in times like this? This will be an ongoing question that will definitely loom the minds of many as Sunak takes his place.


Loom of Brexit: Elephant in the Room?

Continuing the party’s sceptical tone of recent years over Europe, she and many other members of her part have constantly spoken of making the most of Brexit’s “opportunities”, while on the other end of the spectrum, Labour has been about “making [it] work”.

Even though Brexit is no longer “the livewire that it once was” as Simon Usherwood was once quoted saying, for many, there has been an increasing amount of evidence regarding the damage it has caused. As Michael Barnier once tweeted, “Not all (the UK’s) difficulties are due to Brexit, I am simply convinced that Brexit makes everything more difficult”.

It was this notion that probably made the notion of the mini budget even harder to work with, and an even more spectacular failure to watch go up in flames. Truss’ focus was solely on growth and nothing else and once again, living in a fantasy, the shadow of Brexit would not allow that dream to materialise without barriers.

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. Growth, she imagined, would be a form of unity for public finances.


Where are we today?

After the epilogue of departures, first of the Chancellor, Home Secretary and finally Liz Truss herself, we have now arrived at the start of a new premiership.  The damage was so considerable, so rapid and so of the government’s own making, that her party’s credibility is unlikely to be salvageable. But will Rishi Sunak be able to turn the tide? In a time where unity is much needed, can he be what the Conservative Party needs to garner votes to push things through? A man once in charge of the economy, could he be the one we should have put our Truss in?


Featured Image: Photo by Mike Finn with licence

Leave a Reply

Your email address will not be published.

Our YouTube Channel