Updated: Nov 10, 2022
Liz Truss has been in power for 37 days now, elected by 57.4% of Conservative Party members.
However, her premiership has started off more turbulently than anyone could have imagined – the
mini-budget introduced by her and Chancellor Kwasi Kwarteng in September immediately sent the
markets into mass panic, losing confidence in UK investment due to a package of unfunded tax cuts
costing billions of pounds.
The main tax cut in the mini-budget that got people talking was the removal of the 45p tax rate on
people earning over £150,000 a year which many claimed was a crystal-clear metaphor for Liz
Truss’s vision for Britain – to help out the richest 1% of society whilst turning a blind eye to lower
and middle-class society feeling the pinch. Not only would this be a highly distasteful gesture for any
government to make in regular times, but the timing of this being proposed during a cost-of-living
crisis led to widespread fury across the country.
“We get it, and we have listened.”
On October 3rd, Truss and Kwarteng finally caved in to the mounting pressure on the 45p tax rate and
U-turned on this part of the package, claiming it had become a “distraction” to the rest of the mini-
budget, which included a cap on domestic energy bills, ensuring that the average household doesn’t
pay over £2,500 on said bills. Because of the skyrocketing gas prices globally sparked by the war in
Ukraine, the government feared households would have to pay “upwards of £6000,” a nightmare
situation for families just-about-managing across the country.
Whilst the majority of people welcome the U-turn on such a risky trickle-down economic policy, Liz
Truss’s credibility has been permanently damaged, and one wonders if she can do anything to win
back the public’s trust before the next general election in 2 years. The energy price guarantee was
indeed a popular policy, but this doesn’t change the fact that the Bank of England still needed to rise
interest rates to fight the additional inflationary pressures resulting from the panicked markets.
The Pound Sterling fell to an all-time low to the equivalent of nearly $1.03 but it has since recovered
back to $1.10, but unless more of the unfunded tax cuts from the mini-budget are reversed, the
Bank of England needs to keep interest rates high. However, the soaring interest rates caused by the
unfunded tax cut scare led to 40% of mortgage deals being withdrawn, leading to thousands of
potential first-time buyers missing the opportunity to buy their first home. Not to mention, many
existing mortgage customers are now paying hundreds more on their monthly payments.
With Liz Truss claiming the Bank of England’s intervention after the mini-budget was the President
Putin’s fault, and Business Secretary Jacob Rees-Mogg accusing the BBC of breaking impartiality
rules over claiming the government was at fault for the fall in the Pound, the public is losing patience
in the government’s response to the immense economic turbulence in the past few weeks.
And don’t take my word for it, as in the latest YouGov poll concerning voting intention,
Conservatives score 23% whilst Labour scores 52%. Not only this, but the government’s official
petitions website has now seen the petition to “Call an immediate general election to end the chaos
of the current government,” has reached the threshold, and is to be debated is scheduled for
Today, Liz Truss said the following to conclude Prime Minister’s Questions:
“The last thing we need is a general election.”
But given that the Tories’ public approval ratings are at an all-time low, the fall of Liz Truss’s
government seems to be a matter of when, not if, aside from a responsibly-funded package akin to
the popularity of the furlough scheme, to not only win back popularity for the next election, but to
show that they really do “get it,” in the words of the PM and Chancellor.