Truss’s dead cat splat

If Liz Truss can do this much damage in 2 days, God knows what she can do in 2 years.

Expectations were already rock bottom when Liz Truss won the Conservative party’s Margaret Thatcher impersonation contest, but it has not taken long at all for her to prove that even our worst fears about how bad her administration would be were wildly optimistic. She has only effectively been Prime Minister for a couple of days given that all government business was suspended for a fortnight within days of her taking office due to the death of the Queen and the obligatory mournathon, and now the Commons is in recess because it’s party conference season.

Even so, Truss has already shown that her top priority during the energy crisis is to protect the bloated unearned profits of the energy companies, leaving ordinary consumers to foot the bill. Her Chancellor Kwasi Kwarteng then unveiled a mini-budget which even by the dire standards of this Conservative party was shocking in its crass cruelty and its callous indifference to the struggles of ordinary households. Kwarteng announced a raft of tax cuts which will disproportionately benefit the richest, but for the poorest households on Universal Credit there are only to be punitive measures which could reduce their already meagre incomes. This income boost for those who don’t need it is to be funded by a massive expansion in public borrowing, which will in turn be paid for by ordinary taxpayers. For good measure, he also lifted the cap on bankers’ bonuses, because nothing says a responsible response to a cost of living crisis like rewarding disaster capitalists.

What Kwarteng has done is quite literally take money out of the pockets of poorer people in order to stuff it into the bulging bank balances of the rich. So as you sit in your freezing house this winter, huddled under a duvet on the sofa because you have turned off the heating that you can no longer afford, you can console yourself with the thought that your sacrifice is not in vain, you are helping to fund a new holiday home in Tuscany for a merchant banker who makes donations to the Conservative party.

It’s not just those previously opposed to the Conservatives who reacted badly to Kwarteng’s disgrace of a mini-budget. The financial markets responded by tanking the pound, much to the benefit of some of Kwarteng’s banking pals, who stood to rake in a fortune, having previously shorted the pound. Insider trading is illegal, but absolutely nothing untoward happened here. Oh no. And how very dare that unworthy thought even cross your socialist mind, dominated as it is by the politics of envy.

Even Conservative voters have reacted badly to the mini-budget, a YouGov poll has found that a large majority, almost seven in ten, Conservative voters disapprove of Kwarteng’s decision to axe the 45p tax rate for the highest earners and a similar number were opposed to the removal of the cap on bankers’s bonuses. Kwarteng has even failed to play to the Tory gallery.

The crashing pound means that imports will rise in price for consumers already managing soaring costs. Oil is priced in dollars on the international markets, meaning rises in fuel prices are likely. In order to protect the pound, the Bank of England is likely to hike interest rates, which will make mortgages and rents more expensive. This threatens to add a cost of housing crisis to the energy cost crisis and the food bill crisis. Some mortgage providers have suspended new mortgages until there is some clarity about interest rates. The Times newspaper reports that government ministers are increasingly concerned that the Bank of England will be forced to implement aggressive rises in interest rates in order to stabilise the pound, which would result in homeowners being hit with huge rises in mortgage costs.

A former Conservative minister told the Times newspaper: “The moment it becomes serious is when mortgage rates go up for homeowners. If it happens before conference then it’ll dominate and you can’t predict how the party will respond. Her leadership was on an unstable platform and it’s becoming more unstable.”

Liz Truss. | Flickr/Number 10

Truss was not the preferred choice of a majority of Conservative MPs, who by a large margin supported her rival Sunak, she also won the membership vote by a much smaller margin than opinion polling had suggested. However following her victory Truss did not reach out to the opposing faction in her divided party, she displayed the classically Tory winner takes it all arrogance that we know all too well from the nasty party, treating those who had opposed her in the same way that the Conservatives treated remain voters following the 2016 EU referendum. The Tories don’t do reconciliation or compromise, which they perceive as weakness. This is likely to prove fatal to Truss’s chances of having a stable government.

By the way, this winner takes it all arrogance of the Tories is one reason why the Conservatives scream so much about the supposed ‘divisiveness’ of the Scottish constitutional debate. They are terrified that following a Yes vote, they will be marginalised, ignored, and treated with the same contempt that they have displayed for their opponents.

Reports are that a ‘small’ number of letters of no confidence have been submitted to the chair of the 1922 Committee. There is no immediate threat to Truss. Conservative Party rules mandate that a year needs to pass before there can be a leadership contest, so in theory Truss should be safe from challenge until late summer 2023, but as we saw with Johnson, Conservative MPs are able to find ways to force an unpopular leader out anyway.

The same poll that found that not even Tory voters approve of the tax cuts in the mini-budget and only a mere 15% of respondents think that it will succeed in growing the economy, also found that Labour now enjoys a 17% lead over the Conservatives in voting intention. Labour is now on 45% with the Tories trailing far behind on 28%. So much for a Truss honeymoon. She never got a polling bounce, more a dead cat splat. It’s just as well she doesn’t mind being unpopular.

These figures would produce a large Labour majority of 182 at a General Election, meaning that Conservative MPs who are nervous about Truss’s leadership will be reluctant to vote for an early General Election. Remarkably only 47% of Tory 2019 voters now say they’d vote for them. This poll would see the Tories lose 223 seats, which would mean Liz Truss would go down in political infamy as being the worse Tory Prime Minister since the birth of a 3 party system.

The next election is a long way off. The same poll predicts the SNP to end up with 51 seats. If Truss can do this much damage in 2 days, God knows what she can do in 2 years. This is going to get a lot worse before it gets better.

GOING FURTHER:

— AUTHOR —

▫ Wee Ginger Dug, also known as Paul Kavanagh. Blogger who writes and talks about UK Politics and Scottish Independence.

Sources

• Text: This piece was originally published in Wee Ginger Dug and re-published in PMP Magazine on 1 October 2022, with the author’s consent. | The author writes in a personal capacity.
• Cover: Flickr/Number 10. - Liz Truss. (Licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.)