For the first time in my adult life, there is a genuine sense of decay in Britain—a realization that something has been lost that will be difficult to recover, something more profound than pounds and pence, political personalities, or even prime ministers. Over the past three weeks, the U.K. has been gripped by a crisis of crushing stupidity, one that has gone beyond all the turmoil of Brexit, Boris, even the great bank bailouts of 2007, and touched that most precious of things: core national credibility.
Today, we had the absurd spectacle of a prime minister, barely a month into the job, abandoning the central tax-cutting purpose of her premiership and sacking her closest political ally, who had implemented this vision. This all in aid of a vain and surely doomed attempt to cling to power, after the markets concluded that her policies were insane. Never before has Britain found itself in such a humiliatingly risible position. It is the stuff of nightmares: the national equivalent of getting caught short onstage in front of your entire school because you chose not to go to the bathroom when you had the chance.
As hard as it is to get across the sheer scale of idiotic farce now unfolding, let’s try. Just last month, on September 6, Liz Truss replaced Boris Johnson as prime minister. Johnson had been forced to resign because Conservative members of Parliament decided he was unfit for office, after, among other things, he had been fined by the police for attending his own birthday party during lockdown. Truss won the race to replace Johnson by presenting herself as both the continuity candidate—the loyal follower who did not kill Caesar—and the new guard who would do away with all the boring bits of Johnsonism, such as raising taxes to pay for things.
What Britain needed, Truss argued, was a tax-cutting bonanza to set it free. Her rival for the leadership was Johnson’s chancellor, Rishi Sunak, who argued for fiscal responsibility and warned that such a reckless policy would lead to a run on the pound and a calamitous series of mortgage-rate rises. Given this choice, the electorate for the Tory leadership—the roughly 170,000 members of the Conservative Party—preferred the magical money tree.
So, on September 23—two and a half weeks after taking over as prime minister—Truss and her new chancellor, Kwasi Kwarteng, announced an extraordinary array of tax cuts without any indication of how they would be paid for. They called this their “plan for growth.”
And then there was a run on the pound and a calamitous series of mortgage-rate rises.
The reaction to Truss’s plan was immediate and savage. The markets responded with horror at the sudden gaping hole in Britain’s budget. The pound collapsed against the dollar, almost reaching an unprecedented parity, and the cost of government borrowing rocketed. Huge interest-rate increases by the Bank of England began to be priced in as the only way to protect the currency, which, of course, meant stepping on the brakes after Truss had put her foot on the accelerator.
This, in turn, led ordinary banks to start hiking their mortgage rates in expectation of what was coming, just as Sunak had warned, which then sent the property-owning middle classes into a tailspin as they rushed to lock in new rates before the numbers spiked even further. Suddenly, the tax-cutting budget to get Britain growing again had turned into a massive hit on Middle England. Even the International Monetary Fund departed from protocol to issue a sharp rebuke to Truss’s government.
Naturally, Truss’s poll ratings—already low—took a nosedive, sending her to unheard-of levels of unpopularity (currently, a minus-55-point net approval rating). The Labour Party, led by the reassuringly dull Keir Starmer, surged to a 30-point lead. In a single act of folly, Truss had destroyed her premiership and her party’s reputation while resurrecting Labour’s, which had only just been recovering from its own bout of insanity under Jeremy Corbyn.
In a desperate scramble to save herself by reassuring the markets that Britain had not gone mad, Truss began abandoning bits of her “mini budget.” First went the decision—spectacularly unpopular at a time of runaway inflation squeezing everyone—to scrap the top rate of tax for those earning more than £150,000. Then she brought forward the date when the government would reveal how it was going to pay for all its tax cuts, which created the obvious concern that a fresh round of austerity was on its way. And then, today, she went the whole hog, sacking her chancellor and abandoning even more of her plan.
In a single act of stupidity, Truss managed to blow up Johnson’s markedly redistributive election-winning platform—and therefore his coalition, which included disaffected Labour voters from the poorer north of England. Instead of spending more on public services, Truss detonated an economic bomb under the middle classes—first, by lifting the cap on bankers’ bonuses and cutting taxes for the rich, and then, faced with market turmoil, by scrambling around for new spending cuts. It would be hard to design a more catastrophic act of political self-immolation.
Truss’s plan turned out to be like one of those booby traps in an Indiana Jones movie, triggering the collapse of a roof covered in deadly spikes. Whichever way she now turns, she seems destined to be impaled on a spike of her own creation. Having given up on much of her plan for growth, she has removed the very point of Liz Truss. But Liz Truss remaining prime minister means that the markets are likely to continue their squeeze. She has nowhere to go but political death.
Parallels for such an extraordinary demise of a prime minister’s authority are all but impossible to find. In the 1950s, ’60s, and ’70s, one prime minister after another lost power after failing to achieve the central purpose of their government, or experiencing a policy fiasco so dreadful that it sapped their will to carry on in the job. Anthony Eden left office a few months after the catastrophe of Suez, too ill to continue. His replacement, Harold Macmillan, turned things around but left under a cloud after failing in his mission to take Britain into Europe. Harold Wilson held himself up as a man with a plan who would get Britain moving out of its stasis, but was defeated in 1970, having abandoned his failed plan for growth. Edward Heath followed suit, taking Britain into Europe but abandoning his central economic policies when things got tough in the ’70s. One after another, prime ministers came and went, none achieving all that they wanted.
But Britain has never had so epic a collapse as this, nor a prime minister as deeply, painfully unimpressive—the worst prime minister ever, as the historian Dominic Sandbrook put it. When the Queen died, it fell to Truss to speak for the nation. She couldn’t, and she will never get another chance. Her downfall is different from those of her predecessors, for both its speed and what it reveals about Britain.
Britain has been broke before. It was in this position after the war when it needed U.S. assistance, and then again in the late ’70s when it was bailed out by the IMF. It was battered by the markets in 1992 when John Major’s economic strategy collapsed.
What’s happening now is entirely new: the very real prospect that the markets will force a change of prime minister before an election. They have already forced a change in policy. Truss’s problems are so acute that Tory MPs are discussing removing her as a serious option, perhaps their only one. If Truss is removed any time soon, hers would be the shortest premiership in British history, beating George Canning’s 119-day tenure in 1827. And he died in office.
Those considering this drastic course are doing so, in large part, to restore calm and confidence to the markets, not simply to voters. This has not happened before and would surely act like a knife to the body politic, leaving a permanent scar on the country’s reputation.
An old friend who died recently once told me a story about economic decline that stuck with me. He had traveled the world as a journalist for Reuters and said Argentina was the best place he’d ever lived. But that was before its collapse into chaos, populism, and crisis in the late 1990s. I last saw him in 2019; he was living in Brussels then, but told me that he worried some similar decline was happening in Britain.
Back then, I dismissed his fears. I’d lived through the turmoil of Afghanistan and Iraq, the global financial crisis and Brexit. I’d seen Scotland coming close to seceding from the country, David Cameron’s austerity leading to calamity, Boris Johnson’s turbulent administration, and Jeremy Corbyn leading Labour to electoral oblivion. But through it all, Britain had plodded along, not exactly prospering as it once had but inching forward nonetheless. Its institutions did their job, the constitution held up, people’s lives went on much as they always had.
And then Liz Truss came along.
Now I think of my friend, and I begin to wonder. We are now almost 15 years past the seismic financial crisis of 2008 and on to our fifth prime minister. Britain was once a rich country, seemingly well governed with institutions that sat like sedimentary rock on its surface, solid and everlasting. Today it is very obviously not a rich country or well governed, but a poor country, badly governed, with weak institutions. In trying to reverse this reality, Truss has made it visible for all to see.