Liz Truss is the culmination of a decade of disaster for Britain. I stress “culmination”. She is obviously extremely incompetent and detached from reality. But these characteristics, in a Tory wannabe of unchecked ambition, were shaped and exacerbated by a decade of escalating Brexit, post-truth Tory politics and hard right libertarianism which go back more than a decade and exposed an enfeebled British state to this kind of catastrophe.
There have been plenty of incompetent British prime ministers in times past. The Truss extravaganza of hubristic and chronic misjudgement undid her government exceptionally fast but, arguably, was not qualitatively worse than the Suez fiasco, which did for Anthony Eden in a matter of months in 1956.
The parallel with Eden is intriguing. Eden was the last of Britain’s imperial prime ministers, who believed that Britain’s geopolitical power meant that he could dictate to newly assertive nations like Egypt as a means of advancing his Tory project. Until imperialism was exorcised from the national psyche, Suez was a catastrophe waiting to happen. Tellingly, Eden was strongly against British engagement with the nascent European Union in the 1950s, in contrast to the more progressive Harold Macmillan who re-oriented British policy towards Europe—and advanced rapidly with decolonisation—after Suez.
Then as now, it was fading economic power which turned misjudgement into catastrophe. President Eisenhower’s decision in November 1956 to block British access to international loans, and his threat to immediately sell US holdings of British debt, forced Eden to stop his Suez Canal invasion within days. It was about as quick a turnaround as the international bond markets forced on Truss and Kwasi Kwarteng after their 23rd September package of huge debt-for-tax cuts, favouring the rich especially.
But the key question is: why did Truss lurch in this direction in the first place? As with Eden, it was a mix of habit, ideology and desperation.
Truss’s ideology of massive trickle-down tax cuts, while lacking concern about the fiscal numbers—and the real people losing out—was the product of the whole Brexit experience. It was largely inspired by the same think tanks and ideologues, around the libertarian right-wing Institute of Economic Affairs, which drove Brexit.
Facts about trade, investment, growth and fairness were subordinate to ideology and self-interest, creating the anti-experts and anti-truth climate which reached its apogee in the sidelining of officials at the Treasury in the imposition of the 23rd September package by Truss and her fellow Britannia Unchained soulmate Kwarteng. For the libertarian right, Brexit was always the prelude to radical deregulation and libertarianism for the rich.
How far Truss really believed the ideology is moot. She had been a Remainer in 2016, of course. It was a marriage of convenience for her as an ambitious Tory politician in search of a programme popular in her party. Huge immediate tax cuts were imperative as a means of defeating the less shameless Rishi Sunak for the succession to Boris Johnson. A bit like Eden, she seems to have worked herself up into a frenzy of conviction that she could win through simply being bold and decisive—and to hell with the risks.
What she didn’t bargain for was the scale of the market reaction. Why? Because it hadn’t happened before, despite all the warnings of economists and mandarins that something similar was likely to follow hard on the heels of Brexit. If Project Fear was overblown on 23rd June 2016, why should it be any less so on 23rd September 2022?
As we can now see, and as Suez demonstrated about the end of British imperialism, it was a case of Hemingway’s dictum about bankruptcy: it happens slowly, then quickly. The international trade impacts of withdrawing precipitately from the EU have been a slow burning fuse on the British economy since 2016. But £65bn of overnight borrowing, coming virtually from nowhere at the behest of two apparently out-of-control zealots in charge of the Treasury, was simply too much for the markets.
Even with Jeremy Hunt rowing back from the Truss extremism, the Brexit fuse is still burning. As Mark Carney, the former Governor of the Bank of England, said last week: “Put it this way, in 2016 the British economy was 90 per cent the size of Germany’s. Now it is less than 70 per cent.”
Hunt could even make the underlying crisis worse still. If he now embarks on austerity, in addition to Johnson’s hard Brexit, then we may not have remotely reached the bottom of this ideological pit.
Truss has tested to destruction the delusions of Brexit and its right-wing agenda of libertarianism for the rich. A change of leader isn’t enough. What’s needed now is a fundamental change of direction for the country.
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