Conservative MPs Fear Liz Truss is Pushing the UK Economy to Disaster
The Prime Minister’s Brexit-driven ideology is pushing the UK economy off a cliff and her own MPs fear they may not be able to stop her, reports Adam Bienkov
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The pound is plunging, Government borrowing costs are going through the roof and the Bank of England has spent tens of billions in order to stop a run on UK pension funds. Meanwhile, mortgage companies are pulling their products as traders warn darkly that the UK is on the edge of a Lehman Brothers-style collapse.
And yet the word in Downing Street is that absolutely everything is going to plan.
Government sources told reporters on Wednesday that there would be “no change” to its policy and instead suggested that the current crisis was a “blip” caused by international markets failing to understand the sophisticated nature of Truss’ economic plan.
Rather than row back from proposals to hand massive tax cuts to millionaires, ministers have instead been asked to find “efficiency savings” from public services instead. The Chief Secretary to the Treasury, Chris Philp, suggested on Wednesday evening that benefit claimants could also be asked to accept real terms cuts to the support they receive.
Speaking to the BBC on Thursday morning, Liz Truss insisted that she will push ahead, as it is “the right plan that we have set out” and “we have to do it”.
For many Conservative MPs this is not just fantasy economics, but fantasy politics.
With polls suggesting that the party’s economic credibility is now in tatters, they fear that their new leader is pushing them to an “extinction level” event. One poll earlier this week suggested that the Conservatives now face a 1997-level electoral wipeout.
One distraught Tory MP and former Cabinet Minister told Byline Times on Wednesday that Truss’ plan, and in particular her decision to scrap the top rate of tax, is causing serious damage to the party’s hard-fought reputation on the economy. “The 45p cut is really toxic,” they said.
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What has particularly infuriated them is the fact that Truss’ heavy focus on tax cuts for high earners has almost entirely distracted the public from the significant support the Treasury is also providing to households on energy bills.
“Colleagues are angry that the energy package has been completely overshadowed”, one Conservative MP said. “It’s huge expenditure to genuinely fix an extraordinary challenge for households and businesses and it has sunk without trace.”
Truss’ determination to push ahead with her plans, despite the many red lights flashing on the UK economic dashboard, has blindsided some of her MPs.
“There was no absolutely no pitch-rolling [for this plan],” one told Byline Times.
However, in reality, the Prime Minister’s recent actions are entirely in line with the arguments she made during this summer’s leadership contest.
For two months, Truss dismissed warnings from her rival Rishi Sunak that her plans would risk the stability of the UK economy, while insisting that the time for “hand-outs” for low earners was now over.
“To look at everything through the lens of redistribution, I believe is wrong,” Truss told the BBC shortly after becoming Prime Minister, before adding that it was only “fair” that the majority of her tax cuts should go to those at the top of the income scale.
On her broadcast round this morning, Truss continued to take these lines, despite a brutal series of questions from local radio stations and their listeners.
Speaking in characteristically plodding and emotionless terms, Truss showed no sign of contrition or any indication that she plans to change course in any way. Under her current plans, the Treasury will not even re-examine its economic agenda for another eight weeks – and there was little sign this morning that this is about to change.
Brexit Ideologues Pushing Economy Over a Cliff
Conservative MPs are now hoping desperately that this is all merely bravado. They expect that, when faced with a growing crisis, the Prime Minister will inevitably be forced into a series of U-turns in order to stabilise the economy.
Maybe she will, but there is also a chance that Truss actually believes in the hardline economic ‘shock doctrine’ she is now applying.
There is a chance that, when her aides and outriders brief that the International Monetary Fund (IMF), currency traders, and the Civil Service, are all “woke” agents trying to block her glorious economic revolution, or that the whole crisis has somehow been manufactured by the Leader of the Opposition, that she actually believes it.
It is possible that the Prime Minister has become completely convinced by her own rhetoric and that, when the decision comes on whether to push the UK economy over the cliff or admit that she was wrong, she will enthusiastically do the former.
This is not as unlikely as it may seem.
Ever since the EU Referendum, the Conservative Party has committed itself to an economic and political project which even its own Government predicted would lead to the UK becoming significantly poorer. It has continued with this plan despite clear and growing evidence that it has made life and work significantly harder for businesses and individuals across the country.
In some ways, Truss’ new hardline economic agenda is merely the logical end point of that process. If you believe, as Truss and her allies quite obviously do, that the UK can only prosper if it becomes a small state, low-tax, low-regulation economy, outside of the European Union, then you will be willing to take any means necessary to achieve that aim, even if it means crashing the economy.
Pushing ahead will be difficult, however. Conservative MPs are already warning that they will seek to intervene if she continues with all of the measures in last week’s mini budget. One senior figure in the party predicted that there would be sizeable rebellions on their benches in the House of Commons when the Prime Minister puts her plans to a vote. The Bank of England and other institutions are also unlikely to stand by if the Government remains on its current course.
However, with Truss clinging on to the large majority she has inherited from her predecessor Boris Johnson, and with her apparent determination to ignore opposition to her plans, none of this may be enough.
Faced with similar pushback, Johnson was often criticised for his tendency to make regular U-turns. Yet as embarrassing as those U-turns were, they were also necessary to prevent his own Government, and the country, from heading towards outright disaster.
The terrifying prospect posed by the Truss premiership is that she lacks this same safety valve and that, when she insists that we all have no choice but to keep going with her reckless and dangerous economic plans, that she really does mean it.