After a brief and chaotic tenure as the prime minister of the UK, Liz Truss announced a big package of unfunded tax cuts before largely rolling most of them back in the face of a market crash.
Truss, 47, was in office for only 45 days before resigning, making her the British prime minister with the shortest tenure ever. She assumed office in early September with promises of a full-court press for growth, but the financial markets found her programme intolerable as the value of the pound and gilts plummeted due to worries about how she would finance her economic plans.
After 12 and a half years in power, the Conservative Party is now severely battered and has fallen more than 30 points behind Labour in the polls. In fewer than seven years since the 2016 Brexit referendum, which ushered in an era of unprecedented upheaval in British politics, her successor will become the party’s fifth premier.
Truss stated that she will continue serving as prime minister until the party selects her replacement, which is expected to happen within a week.
Regardless of who it is, they will have a difficult job rebuilding the Tory party’s economy and reputation in time for the mandatory general election in January 2025. Truss’s tenure has all but guaranteed post-Brexit Britain’s immediate future is one of higher borrowing costs, weak growth, tax hikes and spending cuts.
“It’s a shambles and a disgrace,” veteran Tory MP Charles Walker told the BBC on Oct. 19. “The damage they have done to our party is extraordinary.”
Chancellor of the Exchequer Jeremy Hunt, who was recently promoted from the back benches after Truss fired Kwasi Kwarteng in an effort to calm the markets, and former Chancellor Rishi Sunak, who finished second to Truss in this summer’s leadership election, are likely candidates for the top position. It’s also likely that Tom Tugendhat, Penny Mordaunt, and Kemi Badenoch will be in the running this summer. Suella Braverman, the former home secretary who was fired on October 19, might potentially be considered.
Truss’ lack of political sense and understanding of economic reality ultimately proved to be her downfall.
She started out to govern as though she had won an enormous mandate with a torrent of radical initiatives after narrowly securing the leadership without the support of the majority of MPs. She didn’t reach out to her opponents because she inherited a fragmented party and instead nominated loyalists to important positions. And when she finally made an effort to establish her authority within the group, she only served to incite its wrath.
In the midst of the highest inflation in four decades, Truss and Kwarteng came up with a sizable 45 billion pound ($50 billion) package of tax cuts, which they then announced without conducting a separate analysis of how it would be paid for. This was their main mistake during the term.
The markets reacted angrily amid concerns that the greatest tax giveaway in 50 years went farther and faster than Truss had hinted during the leadership campaign and would hinder the fight against inflation and undermine the state finances. The Bank of England had to step in to stop a key part of the pensions sector from collapsing as a result of the pound’s decline to an all-time low versus the dollar and the impending prospect of a rout in gilts.
In an effort to undo the harm, Truss and Kwarteng first decided against eliminating the 45% income tax rate for the UK’s wealthiest earners. Later, on October 14, Truss fired Kwarteng and abandoned their plan to freeze corporation tax for the following year. Three days later, Hunt largely dismantled the economic strategy that was still in place, undermining the premier’s credibility.
The final humiliation occurred on Wednesday night as the desperate prime minister attempted to herd her furious MPs into the House of Commons voting lobbies for a vote that could have made or broken her government. Braverman’s dismissal earlier that day for a security violation for which she ordinarily would have received only a warning had already alienated a significant portion of the party’s right wing.
Despite winning the poll, Truss lost the tough fight to stay in power.
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The Chenab Times News Desk
