Liz Truss’s Brexit-Based Economic Dreams Finally Ended Her Short Reign Over 'Britaly'

Jokes and memes are thriving and now Boris Johnson wants to return as prime minister.

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When Britain voted in 2016 to leave the European Union, it was expected that it would be hit by economic problems while it rebuilt its international trade and investment links. A loss of international prestige was also seen as likely. But what no one envisaged was that its usually sane and stable politics would become so dysfunctional that it would be jokingly likened to Italy. 

The Economist magazine picked up on the joke two days ago with an article headlined, ‘Welcome to Britaly – A country of political instability, low growth and subordination to the bond markets.’

At a time when it seemed to be better to laugh than cry over what was happening, another joke at the start of this week likened Liz Truss to a lettuce that only has a shelf life of a week. The lettuce won because Truss didn’t last the week and announced her resignation as prime minister yesterday after 44 days in power,

Now to add to the sense of lunacy, there are reports that Boris Johnson, whose unethical and flippant reign as prime minister led to the current crisis, is considering standing in the ballot to succeed Truss. He is doing that, say his supporters,“in the national interest”, even though he had to resign in July.

The truth is that he might have a good case because there is no other obvious candidate who could unite the bitterly divided Conservative Party and have a chance, however remote, of winning the general election due in 2024.

Pressure is however building for a general election to be called immediately by the new prime minister, who is due to be named by next Friday. 

To be considered in the ballot, contestants must gain the support of 100 or more Conservative members of parliament by 2 pm on Monday. Since there are 357 MPs, that means only three contestants will go to a ballot starting later Monday afternoon. When two contestants are left, party members will vote in an internet ballot unless one of them withdraws.

Rishi Sunak, who won the support of a majority of MPs in the summer but lost to Truss in the members’ vote, is thought to be currently ahead in the nominations along with Johnson, who is returning early from holiday in the Caribbean. 

Boris Johnson and RIshi Sunak. Photo: Reuters/File

Johnson has made it clear since he was ousted as prime minister that he assumed one day he would return to the job, but seemed to think that would not be till next year at the earliest. He had hoped to spend time earning big money with speeches and journalism that would finance his and his family’s life style. Clearly though, the chance to return now is too good to miss.

Sunak’s position means that South Asian-origin politicians are continuing to be prominent in the politics of the country that welcomed their parents as immigrants.

It was Sunak and Sajid Javid who triggered Johnson’s downfall when their resignations as cabinet ministers in July led to a mass of other ministerial walk-outs. Sunak produced sound economic policies in the subsequent leadership contest, but the Conservative members voted for Truss’s unreal right-wing-low-tax-high-growth dreams.

Suella Braverman may put her name forward this weekend but has little chance of success. She jumped to prominence when she entered the contest against Sunak, Truss and others in the summer and was appointed home secretary in Truss’s government. She pursued tough immigration laws and attacks on the rights of public protest and trade union action that led to a reportedly heated row with Truss in Downing Street on October 19 and she subsequently resigned.

Under its ‘Britaly’ headline, The Economist noted that, in 2012, Truss and Kwasi Kwarteng, who resigned as chancellor of the exchequer (finance minister) on October 14, were two of the authors of a pamphlet called Britannia Unchained, which used Italy as a warning of what could happen if economic policies did not change.

“Bloated public services, low growth, poor productivity: the problems of Italy and other southern European countries were also present in Britain,” said the magazine. “Ten years later, in their botched attempt to forge a different path, Ms Truss and Mr Kwarteng have helped make the comparison inescapable.”

Truss became prime minister on September 6 but her time in power – the shortest of any British prime minister ever – saw her, with Kwarteng, quickly pursue their right-wing economic policies. But this was disrupted two days later when Queen Elizabeth died and normal politics were suspended till the state funeral on September 19. 

Later that week, on September 23, Kwarteng produced his bombshell economic package – a mini-budget – with $45 billion tax cuts supposedly funded by unspecified borrowing and without the usual economic assessment by the Office for Budget Responsibility. He failed to alert the markets to what he was planning and refused to produce a new medium-term strategy for the economy assessing his mini-budget till November 23, but later agreed on October 31.

That disdain for conventional policy making was too much for the markets and Britain was hit by a financial crisis and a collapse of the pound that even triggered a rebuke from the International Monetary Fund.

It was also too much for the bulk of the Conservative Party that feared losing votes in the Labour Party’s heartlands because the proposals included cutting the top tax rate for high earners, introducing other tax cuts that would benefit the better off rather than the poor, and removing a ceiling for bankers’ bonuses.

Normal politics were again adjourned while the Conservative and Labour parties held their annual conferences, and parliament resumed on October 11. It then took just ten days for Kwarteng to be sacked and for Truss’s government to unravel to the point where she took the formal constitutional step yesterday of telling King Charles that she was resigning.

She then announced that publicly in Downing Street in front of the famous No. 10 door, saying, correctly, that she had been elected by Conservative Party members with “a vision for a low-tax, high-growth economy that would take advantage of the freedoms of Brexit”. She now had to recognise that “given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party”. 

Former British Prime Minister Liz Truss gives her statement outside Number 10 Downing Street, London, Britain October 20, 2022. Photo: Reuters/Toby Melville

The key word there is Brexit because Truss and Kwarteng wanted to justify their support for Britain leaving the European Union by introducing a low tax economy that would attract domestic and foreign investment and lead to high economic growth alongside strict controls on immigration.

The theories that she had espoused in the 2012 pamphlet with Kwarteng, a very bright old Etonian with seemingly even greater self-belief than Johnson, did not take account of the consequential financial uncertainty that would deter investment and block the immigration the country needs to fuel economic growth.

Enter Braverman, with an almost manic right-wing approach, who exacerbated the growing crisis. She emerged as the heroine of the ageing right wing Conservative Party membership that elected Truss. Advocating a new public order legislation in parliament on September 18, she said, “I’m afraid, it’s the Labour Party, it’s the Lib Dems, it’s the coalition of chaos, it’s the Guardian-reading, tofu-eating wokerati, dare I say, the anti-growth coalition that we have to thank for the disruption that we are seeing on our roads today.”

Jeremy Hunt, a former health and foreign secretary, is now the rock on which the government’s stability rests till a new prime minister is named. He took over the finance minister’s post from Kwarteng and has cancelled virtually all the mini-budget’s controversial proposals. 

Braverman was succeeded on October 19 as home secretary by Grant Shapps, who Truss had sacked as transport secretary when she became prime minister. That surprising choice underlined Truss’s weakness and the collapse of the Brexiteer’s power because both Hunt and Shapps were “remainers” in the Brexit  debate.

By the end of next week, there should be a new prime minister who will try bring the Conservative Party’s warring factions together and run a stable government ready for the 2024 general election. But the rows and uncertainty over what Britain should do following Brexit are far from over for the simple reason that there never has been any broadly agreed public policy on what could and should be achieved.

John Elliott is a journalist.