Liz Truss has now been Prime Minister for a month and her honeymoon period has well and truly finished. In fact, it ended on 23rd September after 19 days as Britain’s new Prime Minister.
On Friday 23rd September Britain’s new Chancellor of the Exchequer, Kwasi Kwarteng, delivered an emergency mini-budget. This was necessary as Britain is facing a barrage of economic woes affecting every person living in the UK. Energy bills have rocketed to the point of it being unaffordable for many people to heat their homes this winter or drive their car to work.
And as inflation has surged, so have food bills. The weekly food shop has now become a battle of bargaining and budgeting. Inflation has hit a 40-year high in the UK. Milk is up 28% over the past year, butter 27%, Pasta 25%, and Cheese 18%. Chicken, lamb, and other meats have risen by 16% over the past year. These price rises are affecting everyone.
Therefore Liz Truss had to do something but the budget announcements made by the new chancellor seemed to be something for nothing. Tax cuts across the board with no cut in spending. It was a budget worthy of a nursery or primary school project. And the financial markets knew it. Immediately the pound crashed against the dollar to hit a 40-year low in the currency markets.
It was a reckless budget from a new government that was an attempt to seize a new low tax mandate but instead simply did not add up. £400bn of extra borrowing over the coming years to fund the biggest government giveaway since 1972. It was supposed to be a budget for growth but turned into a recipe for chaos.
Yesterday the Prime Minister and Chancellor said they had made some mistakes. This U-turn was not based on a realization that the mini-budget was a failure but on the assessment of a lack of support among Conservative MP’s. The U-turn means Britain’s top rate of 45% for those earning over £150,000 will stay. Cutting the tax of the top earners should never have been a priority for a new government in the midst of an economic storm. Now she has had to backtrack.
What can we expect from the next month? There are so many issues that need to be addressed in the UK. The financial storm is one but the culture war is another. Will Liz Truss survive to stamp her Conservative brand on a Conservative party that has lost its way or is she simply the latest short-term leader to fail to answer the question “What is the Conservative Party for”?
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