Former Labor Prime Minister of the United Kingdom Gordon Brown made an ironic statement years ago with a lapidary dilemma about the fate of any Downing Street tenant: “Either he fails, or he knows how to leave on time.”
The failure of Liz Truss, forced by the markets and her own deputies to quickly dismantle the entire economic project with which she presented herself to lead the Conservative Party, is evident. “I am afraid that we have just thrown away years of hard work to build and maintain a reputation as a party with fiscal discipline and competent to govern,” Philip Hammond, a former Conservative finance minister, sentenced this Friday, when it was already clear that Truss was going to back down permanently on his tax cuts, and was about to impeach his friend and ally, Kwasi Kwarteng, in an attempt to salvage his term as prime minister.
The problem facing Truss herself and her fellow MPs is agreeing on when she is leaving. With just over a month in power, the Prime Minister is going to fight tooth and nail against going down in history as the person who lasted the least in office. The record is held by George Canning: 119 days, in 1827, until pneumonia ended with a sudden death. His last words when he died, curiously, were “Spain and Portugal”.
The conservatives are aware of the triple obstacle that lies ahead: the internal rules do not allow, in theory, to call new primaries until a year has passed since the previous ones (which were held in August). For the parliamentary group to impose a new prime minister, even if he is a consensus figure, without going through the affiliates or the polls, would be unpresentable in democratic terms. And finally, the idea of early general elections, with the data from the latest polls, terrifies all parliamentarians Tories.
“We are going to hear a lot of excuses in the next few days to laugh. It’s the only thing left for that party [conservador] after 12 years of stagnation. But even the prime minister knows that she is not in a position to fix the mess she has caused. And deep down inside, many Conservative MPs know something else: that they no longer have a mandate from the British people,” Labor Party leader Keir Starmer said. He called for elections again in the face of a “grotesque spectacle” and the “pain inflicted on the country.”
The task of the new minister
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The Truss Government tries to play for time. His new economy minister, the moderate and centrist Jeremy Hunt, launched himself early on Saturday on an intensive radio and television tour, determined to repair the damage done by the prime minister and to regain the confidence of citizens and markets. And the first message was an amendment to the entire neo-liberal policy of Truss and his already ousted minister, Kwarteng. “Taxes are not going to go down as much as some citizens would have liked. Some are even going to go up ”, warned Hunt, who immediately recognized the mistakes that his boss, in a disastrous appearance before the press hours before, had been unable to admit.
“There were mistakes. It was a mistake, when we were willing to make complicated decisions regarding taxes and cuts in public spending, that we abolished the maximum personal income tax rate for the highest incomes”, Hunt admitted on the BBC, with the tone of regret that many claim Tories. “And it was a mistake to act blindly and present these measures without backing them up with a report from the Office for Budget Responsibility (OBR), showing that the accounts were coming out,” said the new minister.
That was the main reason that the storm was triggered on September 23, when Kwarteng presented a tax cut proposal valued at more than 60,000 million euros. No one could be called by surprise. It had been the promise repeated ad nauseam by Truss during the long summer primary campaign. What nobody expected either was that the new government team would show a lack of experience and professionalism like the one that could be seen that day.
In the midst of galloping inflation, with a recession brewing and interest rates rising rapidly, Kwarteng and Truss announced a huge hole in public accounts without explaining their plans to control public debt. And they defended, in addition, obscene tax benefits for companies, the highest incomes, and the top executives of the city financial institution in London, in the midst of a cost-of-living crisis that is screwing the majority of citizens. The Bank of England had to intervene up to three times to calm investors.
“Truss’s mandate now hangs in the balance,” William Hague told TimesRadio. “Everything that has happened has been a catastrophic episode,” lamented who was also leader of the Conservative Party between 1997 and 2001. “Many of us gave him a multitude of warnings about what would happen if he put on the table tax cuts that were not compensated with the necessary income forecast. We made it clear that it would be financially and politically unsustainable,” Hague said.
The pulse of the Bank of England
The Bank of England, forced to an extraordinary purchase of bonds to stabilize the markets and rebuild the botched Truss government, launched an order this week. He would not prolong his purchases beyond Friday. The governor of the British monetary authority, Andrew Bailey, was clear that it is not possible to sip and puff at the same time. It is not sustainable to raise rates to cool down inflation, and at the same time warm up the economy with an unlimited purchase of bonds. By limiting his intervention, he helped force Truss to act. The markets took it for granted that the prime minister would roll back the rest of her tax cuts. So it was.
His purpose of stopping the decision of the previous Government of Boris Johnson to raise the Corporation Tax from 19% to 25% next April, which he had announced over and over again during the summer, was annulled. There would be an increase, to guarantee additional income of more than 20,000 million euros in the public coffers. Not only that. His Economy Minister, the scapegoat to save his mandate, would be dismissed witheringly. Kwarteng learned that Truss was throwing him overboard when he landed in London on Friday morning, after cutting his stay in Washington, where he was attending IMF meetings, by a day. Disciplined, but enraged, he told those closest to him, according to various British media, that, with his dismissal, Truss would only be able to win “a few weeks.”
“This is no longer enough. It will be extremely difficult for her to continue in office. Her position is very vulnerable, ”said the former conservative Minister of Justice, and today one of the main critics of the radical drift of his former party, David Gauke.
Truss’s appearance was a communicative disaster. Eight minutes of nerves and rigidity in which the prime minister justified all her policy rectifications in the need to “transmit stability to the British economy”, without admitting that she had been the cause of the turbulence of recent weeks.
A “disaster”, a “horror”, a “political corpse”. The laments, from anonymity, that dozens of conservative deputies uttered to the media after Truss’s appearance on Friday, gave a clear idea of the situation. By giving up her entire political and economic project to remain in power, the Prime Minister has become an empty shell, without legitimacy, authority or power. The future of her mandate is in the hands of her new finance minister, Hunt, who is at the ideological antipodes of the prime minister. If she could survive, the Hunt Government would have survived. If it finishes sinking, the Truss Government will have sunk.
The markets reacted with disappointment to the appearance of the prime minister. The pound and government bonds began to slide, and widespread fears suggest that Monday will be another day of turmoil.
When Conservative MPs decided that their future could no longer be tied to that of former Prime Minister Theresa May, or Boris Johnson, they still let a few months go by before launching the massacre. “We are British, and we are not going to throw this lady under the bus, just when she has started at the helm of an incredibly difficult position, and is facing very serious financial problems,” MP Daniel Kawczynski said on Friday, defending Truss.
As the feeling spreads that time is running out – there must be elections, at the latest, in two years – and that the Conservative Party is headed for collapse, nerves rise, and what some weeks was unthinkable. Letters from deputies announcing the withdrawal of their confidence in the prime minister – the mechanism designed to activate a motion of internal censure – accumulate in the leadership of the parliamentary group, and the British chivalry that Kawczynski defends is becoming a man for himself can run over.
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