Britain will get its third female prime minister on Tuesday after Liz Truss is invited to form a government by the Queen. Ms Truss arrives in No 10 at an inauspicious time. Rising gas prices and risks to the electricity supply this winter could lead to blackouts. The UK faces a wave of industrial action of the kind not seen for 50 years, and the threat of stagflation looms. Yet Ms Truss won the top job by not addressing, or even acknowledging, such malaise. Britain’s next prime minister dismissed the idea of Britain heading for trouble as “declinist talk”.
Ms Truss won’t last long in office if she continues her holiday from reality. Her predecessor, Boris Johnson, thought the public was willing to be conned – provided that there was enough fun to be had. Eventually the lies caught up with him. Ms Truss lacks his star quality, his sheer brazenness and his record of electoral success. She also leads a party with a record in government of running down Britain’s public services, and the failure of its principal political project – Brexit – to deliver a promised dramatic turnaround in the fortunes of the nation.
During the 2010s, despite low interest rates and inflation, Britain suffered from high levels of inequality, low wages and low productivity. Reversing those trends will be much harder going now. Ms Truss doesn’t like to see the world through a “lens of redistribution”, but she’ll have to take off the rose-tinted spectacles. She has already been forced to admit the need to intervene to deal with an immediate cost of living crisis. Despite her instincts her government will probably spend tens of billions of pounds in the coming weeks to help people – especially poor people – pay their energy bills.
The capacity to describe Britain’s problems has often appeared to be beyond Ms Truss. Her diagnosis was that Britain needed economic growth, which would be magically restored to the country with tax cuts, providing workers “grafted”. Cutting taxes – whether VAT, income or corporate – will not conjure up growth. It is not laziness but persistent low investment by UK businesses that accounts for virtually all of this country’s productivity gap with France. Rather than foster new technologies and use them to curb greenhouse gases, Ms Truss recklessly wants to approve the new extraction of North Sea oil and end a moratorium on fracking.
She may not get her way. The Conservative party is mutinous: Ms Truss is the fourth Tory leader in six years. Britain’s next prime minister is in a weak position. Ms Truss beat her rival, Rishi Sunak – but not convincingly. Not even half of the eligible Tory members voted for her. She becomes the first Tory leader to win through party members overturning the MPs’ choice, which in this race was Mr Sunak. Having failed to come up with proposals to deal with the nation’s crises, it is unsurprising that two-thirds of Britons have little or no confidence in her premiership.
Ms Truss is right to question Treasury orthodoxy but wrong to think this means regressive tax cuts are preferable to government spending in an inflationary crisis. She had no electoral strategy for the public because she was targeting 170,000 party members. However, her policies and her instincts will now collide with the reality of economic stagnation and mounting pressures on hospitals and schools. Ms Truss wants to unleash the country’s potential but that won’t happen by getting rid of holiday pay or letting the City engage in greater risk-taking. A trade war with the EU would be painful. In a time of crisis, Britain cannot afford a governing party that pursues political goals whatever the economic cost.
