Liz Truss discovered the hard way that ideological certainties cannot survive contact with the real world. She has resigned after just 44 days in office, and become the shortest serving prime minister in 300 years, because the “Treasury orthodoxy” that she so despised turned out to be simply the articulation of the economic facts of life.
This is surely the lesson of Truss’s short-lived premiership for parties of right and left. The experts cannot be ignored, the markets cannot be bucked, the Office for Budget Responsibility cannot be sidelined for the sake of political expediency. Wanting something to be true doesn’t make it so. The irony is that the libertarian free marketeers had to be woken from their fantasy economics by the markets they purport to admire.
The country will now have its third prime minister in a year (unless Boris Johnson returns). The holders of three of the great offices of state—prime minister, chancellor and home secretary—have changed in the space of a week, at a time when economic and national security threats are rising.
The long-term economic and political consequences will be dire. One senior MP points out that the voters will not forgive the self-indulgence of a party caught up in Westminster games as mortgages rise and energy prices soar. “The public are terrified whilst this is going on,” he says. “It’s beyond insane.”
In her resignation speech, Truss tried to blame external forces for the disastrous economic impact of her policies. “I came into office at a time of great economic and international instability,” she said. But that is precisely why it was the wrong time to take a reckless gamble with the country’s finances. The nation is now paying the price for decisions she and her former chancellor made. The global loss of confidence in the British economy that saw the pound plummeting and the cost of government borrowing soar was a direct response to the mini-budget.
It is extraordinary that Truss lasted in No 10 for less time than she campaigned during the Tory leadership contest. Speaking in Downing St this afternoon ,she admitted that she could not “deliver the mandate on which I was elected by the Conservative party”. She has already abandoned almost all the policies on which she stood. Truss may have been in office for the last few weeks but Rishi Sunak’s agenda is now in power, with Jeremy Hunt as chancellor.
Senior Tories are reeling from the last few days and hours that have left their party looking like a chaotic mess. MPs know that it will take them many years to regain the reputation for economic competence that was sacrificed on the altar of free-market ideology. “Game over—last majority Conservative government in my lifetime,” says one former minister, who is in his fifties.
There will be no easy route to stability. One former minister says: “It’s vital that the elders of the party get together and choose a prime minister, deputy prime minister and chancellor who can unite wings of the party and stave off catastrophe.” That will not be a simple task.
MPs—who know their own careers depend on having a leader with more electoral appeal—are desperate to avoid the party members getting a say over who should succeed Truss. But they are struggling to agree among themselves over who should take over. Graham Brady has said that he expects Tory members to be included in the Tory leadership contest, which implies there will be some kind of online ballot.
Suella Braverman, who with her resignation letter and attacks on the “tofu-eating wokerati” has aimed to set herself up as the champion of the Tory right, will do her best to resist any attempt to install Rishi Sunak or Penny Mordaunt without a contest.
Boris Johnson is said to be planning to stand in the contest and believes it is a matter of “national interest”—but this would just be a return to chaos and instability of another kind, with the members yet again imposing a leader on the MPs. The electorate will surely not forgive the Tory party if it reinstates a leader it ousted as a rule-breaker only a few months ago.
It is decision time for the Tory party in more ways than one. At the recent Conservative conference in Birmingham, one MP compared Truss to Jeremy Corbyn, who led Labour to its worst defeat because of his refusal to compromise. The Tories now have to decide whether they prefer the ideological purity of opposition to the pragmatism required to be a successful party in power.
