An ideologically extreme party that makes unpopular policy choices far removed from the position of most voters will reap the inevitable consequence in terms of public opinion. Liz Truss decided to bet against such thinking, and has lost badly. Squandering the Tory reputation for fiscal prudence will ensure the spectre of Black Wednesday hangs over its party conference.
The mistake was Kwasi Kwarteng’s plan for growth. The public, accurately, saw it as unfair, foisting higher mortgage payments on many while millionaires get a £55,000 handout. The Labour party has opened up a 30-point poll lead over the Tories. Sensing danger, Ms Truss and Mr Kwarteng did hold emergency talks with the Office for Budget Responsibility on Friday. But the move smacked of desperation. Her government, rightly, looks finished before it gets a chance to get started.
To understand why Ms Truss was prepared to light such politically flammable material as benefit cuts and smaller pensions, one must try to see the world from her point of view. In August, the Bank of England warned that the country was facing a recession that would probably last into 2024. If nothing changed, there was a good chance the Tories would go into the next election with a record in government of high taxes and flatlining growth, but also with high interest rates to cope with elevated levels of inflation.
Ms Truss probably reasoned that such conditions would not be conducive to another Conservative election victory. So she pronounced the economy fatally ill, telling Tory members that immediately administering a shock therapy of tax cuts for the rich and pro-business deregulation was morally justifiable because the alternative was a slow death. The author Naomi Klein charted this form of disaster capitalism in her 2007 book The Shock Doctrine.
The prime minister’s theory rests on bringing forward the pain, resulting in a recession that is short and green shoots of recovery that appear some way before 2024. The public is beginning to pay a very high price for an eccentric economic strategy which seems unlikely to yield the hoped for political results. To impose more public service cuts risks chaos in prisons, classrooms and hospitals. Underlying opinion has travelled a long way since the 2010s – and it is in the direction of favouring higher spending and taxes. Struggling families are unlikely to forgive a government that comes for “efficiency savings” when their cupboards are empty. If Ms Truss imagines they are all Labour supporters, whose ballots were never coming her way, she is very much mistaken. The Conservative party has long believed its success lies in home ownership. Rising interest rates may bring down property values in the long run, but it is likely first to turn the Tory core voters, in both the red and blue walls, against the party.
Ms Truss is the most manifestly Thatcherite Tory leader this century, whose political zigzagging has been undergirded by her constant belief in the benefits of free markets. Yet this is faith-based politics. Blind conviction won’t see tax cuts generate the growth she craves. Many people think the prime minister is barking up the wrong tree anyway. After a decade of insecure work and falling real wages, almost half of Britons think economic growth itself does more harm than good.
Former Truss supporters may be suffering from buyers’ remorse. For the prime minister there seems no imaginable route of escape from her disastrous political misjudgment. Without a plan to jettison her policies and her hubristic chancellor, there appears no way to boost the party’s poll ratings or heal its divisions. Ms Truss’s embarrassing performances in the media have contributed to a rumble of discontent that will peak next week. The country needs better leadership than this. Finding a new Tory leader would be a messy business, but the alternative looks worse.