Dead woman walking

‘Trussonomics’ is well and truly over, writes Eddie Ford. Jeremy Hunt is now in charge and Tory MPs are furiously plotting to kill off Liz Truss, a prime minister in name only

Liz Truss looks like a goner, with her rapidly unravelling government, insofar as you can call it that, staring into the abyss. First she sacked Kwasi Kwarteng, now it is Suella Braverman - meanwhile Tory MPs are openly asking: what is the point of a prime minister who ditches her whole programme overnight?

As previously pointed out, the parliamentary Tory Party is likely to opt for some sort of ‘coronation’ when it comes to their next leader. No way are they going to repeat the mistake of allowing the 170,000 party members to have the final say. After all, look who they picked: Boris Johnson, and then Liz Truss - both of them absurd figures (though the former almost looks like a genius compared to the latter!). Though it is fun to play around with the idea, there is no serious possibility of a Johnson return. Tory MPs would never allow it - unlike the membership, of course. In a recent YouGov poll of the party rank and file, who were asked who should replace Truss, Boris Johnson came top (32%) - followed by Rishi Sunak (23%) and Ben Wallace (10%).

You knew it was the end for Liz Truss, even before she sacked Kwasi Kwarteng. It was the markets which decided her fate.

Of course, as various journos have commented, it is all very well for a prime minister to fall out with the chancellor if there is a disagreement between them when it comes to policy. But that did not happen. She can talk about presentation all she likes, yet the idea that the mini-budget was all Kwarteng’s doing is risible. The two are ideologically joined at the hip and the mini-budget was obviously a joint effort - shown by the fact that both of them were contributors to Britannia unchained (2012). Warning about “an inevitable slide into mediocrity” unless radical measures were taken, this book in many ways sketched out the fundamentalist, free-market, trickledown economics that later emerged in the mini-budget. Plus this was what Truss had been banging on about non-stop during the leadership contest - ‘shock and awe’ tax cuts would serve as a stimulus to growth, making everybody better off in a couple of years’ time, with 2.5% annual growth rates, and so on.

It was always cuckooland stuff that only a few ideologues believed ... well, apart from a majority of Tory members. Here is the world reeling under a huge increase in energy prices, with this government borrowing unfunded around £100 billion to avert imminent destitution for millions of people. The idea that this ‘dash for growth’ was going to be achieved under those circumstances was simply not credible and we saw rapidly rising yields on government gilts, along with interest rates and mortgages, a plunging pound, plus a load more borrowing by the Bank of England to prevent financial meltdown - especially when it came to the pension funds. Truss fancies herself as a revolutionary ‘disrupter’ of the status quo - and you could say that she achieved her goal, but not in the way she imagined!

Her fate was finally sealed with the extraordinary financial statement Jeremy Hunt delivered at the beginning of the week, in what was a desperate bid to reassure the markets. This surely represented the biggest government U-turn in British history. Truss had to endure the utter humiliation of being forced to appoint a chancellor who completely gutted the economic policies she had been advocating only a matter of days before.

In fact, Hunt went further, cancelling the Johnson administration’s planned cut in the basic rate of income tax, while the energy price guarantee was slashed from two years to six months - a totemic policy that Truss had dishonestly used time and time again to shield her tax cuts from criticism and distinguish herself from Labour. Now that has been shot down in flames. Hunt also took the axe to a swathe of other tax measures, including changes to dividend taxes, a VAT-free shopping scheme and the freeze on some alcohol duties - upsetting many retailers and pub-owners. He also hinted that he was prepared to introduce a further windfall tax on the energy companies, humiliating Truss even further.

Alarmingly, Hunt’s savaging of the energy price guarantee means that the average annual energy bill - as things stand now - could rise to more than £4,000 from April, which in turn might lead to a rise of almost 5% in the annual inflation rate. Inflation now stands at 10.1%, meaning that prices are rising at their fastest rate for 40 years - exacerbating the cost-of-living crisis yet more. As a result, according to a recent BBC survey, nine in 10 people are trying to save money by delaying switching on the heating, and many are going without food for a day or more.

Austerity two

During the hustings, Rishi Sunak repeatedly said that trying to implement Truss’s radical tax-cutting agenda at a time of high inflation would lead to disaster - which it did. We now have two programmes: the memory of the one that Truss got elected on by 57% of the party membership; and the one promulgated by Jeremy Hunt, that involves tax rises and brutal public spending cuts to fill the estimated £38 billion black hole in government finances still left after Hunt’s dramatic tax U-turns. Austerity two, in other words, but this time round it would be done in a “compassionate” way, if we are to believe Hunt.

But what exactly can he cut - foreign aid again?1 Hunt told the cabinet on Tuesday that “everything is on the table” ... but not the pension triple lock 2019 manifesto commitment, Truss assures us (but, of course, we can be sure she won’t last). So health, education, welfare benefits and public-sector pay are among those areas expected to be hit in some way, though it is difficult to envisage how that could be done, given that they are already cut to the bone.

There have been rumours that Truss was even considering ratting on her campaign pledge to raise defence spending to 3% of GDP by 2030 - causing the defence minister, Ben Wallace, to say he would resign if this happened. As part of the chancellor’s “eye-wateringly difficult” decisions, the Financial Times is reporting that he is planning a new tax on bank profits. He is also considering, it appears, delaying by a year Boris Johnson’s flagship social care reform of introducing a cap on social care costs. There is the distinct possibility that Hunt’s spending cuts may be more savage than George Osborne’s era of austerity. Hardly a recipe for electoral popularity.

Officially, Tory MPs cannot get rid of her for another year. But that is a bit like the Fixed-term Parliaments Act - the reality is different to the rules, which can be changed at any time if politically expedient. Various reports suggest that Sir Graham Brady, chair of the 1922 Committee, had received up to 100 letters calling on Truss to go, increasing the pressure on him to rewrite party rules to allow another confidence vote - which he is bound to do if the number of those wanting to force her out starts to get near 179 (ie, half the parliamentary Tory Party). However, there are indications that Brady would act after a third of MPs have submitted letters, not half - so Truss is in deep trouble.

For the anti-Truss coalition, the obvious problem is finding a ‘unity’ candidate that they can all rally behind - hence the campaign has the potential to falter. It is not totally impossible that the prime minister could hang on by her fingernails for a few more weeks, though it does seem that her demise will be much sooner than that, given the noises coming out of the 1922 Committee. Will the MPs eventually cluster around Ben Wallace, as many think? It has to be someone who is broadly acceptable to all factions - which rules out Rishi Sunak, as Johnson supporters regard him as the treacherous Brutus who knifed their hero in the back.

The vast majority of Tory MPs face the prospect of their carefully crafted careers going up in smoke - which is more or less guaranteed if they stick with Liz Truss. Therefore it matters for these people whether the Conservative Party loses the next election by 250 or 50 seats, as they might be lucky enough to retain their jobs. Unfortunately for them, all the polls indicate that it will be nearer the former than the latter. Techne has Labour on a fairly staggering 49%, compared to the Tories on 25%. This might not be what happens in an actual election, of course, but historically the Tories have never got less than 30% of the vote. Also broadly representative, People Polling has Labour on 53% and the Tories 18% - astonishingly bad for the Conservative Party. Another survey by Redfield and Wilton Strategies shows the biggest advantage for any party since October 1997, with Labour polling on 56% (up three points since October 13), while the Tories were down four points on 20%. A major new poll by Electoral Calculus predicts the almost complete annihilation of the Tories, giving Labour an unprecedented 364-seat majority, leaving the Tories with just 48 MPs.2 Under this scenario, the Scottish National Party would end up with 52 seats - meaning that they would be His Majesty’s Official Opposition, not the Tories.

Of course, that will not happen, but a Labour government under the former Pabloite Sir Keir Starmer looks very likely. Remember those on the left who were telling us that he only wanted to purge the left, and didn’t want to be prime minister. Will they ever learn? Probably not.


  1. theguardian.com/business/2022/oct/18/hunts-expected-austerity-drive-where-will-the-axe-fall.↩︎

  2. electoralcalculus.co.uk/prediction_main.html.↩︎