Mini-Budget is ‘right plan’ despite market turmoil, Liz Truss insists

It’s been a hell of a week for Liz Truss, and now the PM faces a huge conundrum of her own making just days into her premiership.

The events of the past week have been compared to Black Wednesday in 1992, with the Bank of England stepping in to try to calm volatile gilt markets.

Truss has admitted her package of tax cuts gives “disproportionate” gains to the richest in society, but insisted it was “the right plan” to deliver economic growth.

Sign up for our free Indy100 weekly newsletter

In short, she’s put herself in an impossible position and anything she does now will have a detrimental effect on her political career – not to mention the country’s well being.

These are the four biggest problems that Truss currently faces, which she cannot escape from.

She can’t stick with the mini-budget

What next for Truss?Toby Melville - Pool/Getty Images

It’s a disaster; a pure, unmitigated catastrophe of the highest order, and the biggest self-imposed crisis the UK economy has faced in years – if not ever.

Let’s not forget, Truss rejected calls to bring forward an Office for Budget Responsibility forecast, as well as reportedly ignoring senior government officials who told her that tax cuts and excessive borrowing would trigger chaos in the markets. It seems that Truss and Kwarteng are following the Michael Gove playbook and wilfully resisting the experts - almost like they knew they’d have been told their plan would have disastrous consequences. She was clearly prepared to let members of the public take a hit, which makes it even more difficult to stomach.

Evidently, the best thing for the country is to reverse it. Truss’s comments this week suggests she thinks the best thing for her career is to double down at the expense of the greater public, but she’s already put herself in an unsustainable position. With letters of no confidence reportedly coming in already, and polls showing huge swings towards Labour, her days inside Number 10 are numbered if things don’t change.

A huge U-turn so early is career kryptonite

So bad is the position she finds herself in, though, a decision to change her mind could potentially end her political career too.

You don’t have to be an economics expert to realise that it’s in the best interests of the country to reverse the pledges made in the mini-budget. But rowing back on the budget now, especially after doubling down on it all week, would make Truss look weak in the eyes of many voters – especially as it’s the first major thing she’s put her name to as PM.

U-turning instantly would make her look both incompetent and unprincipled. Having already gained a reputation as a flip-flopper after changing her views on Brexit and the Royal Family over the years, this is something she can’t afford.

She can’t call a general election

The idea of calling a general election as a fight or flight response is clearly out of the window too. That’s mainly thanks to the recent polls which make for horrendous viewing for Truss and the Conservatives.

Labour has surged to a 33 point lead in a YouGov poll released this week as the catastrophic political reaction to Liz Truss's budget unfolded, while the Tories were down seven to 21 per cent.

In other situations the spark of an election drive could be used to disract from the issues at hand, but there is no way now we will see an election called until Truss – or, much more likely, the person who is leading the Tories by 2024 – absolutely has to.

She can’t sack Kwarteng

She can’t fire Kwarteng and hope to pin the chaos on him by doing so. They’ve been allies for a long time, and their families even lived on the same street for a time. Also, pushing blame on him just won’t wash: let’s not forget, she was angling for this throughout her campaign for the Tory leadership race.

A clip has resurfaced from a debate over recent days which shows Rishi Sunak warning Truss that a borrowing led economic plan would be a total 'fairytale' – and so it has already proven. This reckless, uncosted approach has been part of her DNA since the campaign began – cutting Kwarteng would show a lack of accountability and loyalty.

Have your say in our news democracy. Click the upvote icon at the top of the page to help raise this article through the indy100 rankings.

Please log in or register to upvote this article
The Conversation (0)