For aficionados of irony, the spectacle of a free-market-fundamentalist finance minister being forced from office by the markets themselves is nothing short of delicious. But for Prime Minister Liz Truss, who at the end of last week decided to throw her Chancellor of the Exchequer Kwasi Kwarteng to the wolves in an attempt to save her own skin, there’s nothing remotely amusing about the situation. ‘KamiKwasi’ may have been a hapless failure but he was at least a useful lightning-rod. Now he’s gone, Truss is left horribly exposed.
A prime minister firing their finance minister is hardly unprecedented: after all, arguments between Number Ten and Number Eleven Downing Street have been a near-constant feature of British political life, and successive chancellors have often had to pay a political price when the UK economy has run into trouble. But two things about Kwarteng’s spectacular fall from grace stand out.
First, the UK has never seen a chancellor dismissed so soon after being appointed – especially not by the very same prime minister who gave them the job in the first place. Second, Kwarteng’s dismissal had nothing whatsoever to do with policy differences with Truss: indeed, in another delicious irony, he is probably the first chancellor ever to be sacked for agreeing wholeheartedly with his boss.
Both Truss and Kwarteng had long argued that the state should shrink, taxes should be lower, public spending should be cut, welfare benefits should be less generous, and regulations on businesses should be removed. Only then could the British economy be made fit for the 21st century, ensuring that the country could carry on fulfilling its destiny one as of the world’s great trading, diplomatic and military powers.
True, Truss – unlike Kwarteng – initially saw Brexit as something of a distraction. But once the UK voted to leave the European Union, she embraced it with the zeal of a convert, convinced, like him, that the only way to reach the neoliberal nirvana foreshadowed in their 2012 book Britannia Unchained would be to exploit the sovereignty regained by its departure from the EU to bring about the changes they longed for.
Truss winning the leadership of the Conservative Party, becoming prime minister and appointing Kwarteng as her chancellor, then, was the chance for the pair to finally realise their dream. But their decision to do so via a shock-and-awe, move-fast-and-break-things, ‘mini-Budget’ that promised supply-side reforms and unfunded tax cuts for the rich rapidly turned into a nightmare.
The pound plunged, the cost of government borrowing shot up, prompting sharp increases in interest rates on home loans and obliging the Bank of England to intervene in order to safeguard occupational pension funds. Rescuing the situation has required a reversal of many if not all of the mini-Budget’s proposals as well as Kwarteng’s replacement (announced in a humiliating, even excruciating news conference conducted by Truss on Friday afternoon) by Jeremy Hunt – a more experienced politician who has immediately made clear that he will be effectively scrapping his predecessor’s plans so as to calm the markets.
The question everyone is asking, however, is will that be enough – even if, for the moment at least, the markets seem prepared to give Hunt the benefit of the doubt – to save Liz Truss? Opinion polls suggest, after all, that the public hold her every bit as responsible as her former finance minister for the calamity and chaos of the last few weeks. They also suggest that voters, who currently say they prefer the opposition Labour Party to the Conservatives by an eye-watering margin of something between 21 and 33 percentage points, now see her as generally untrustworthy, incompetent, overly-ideological and even dislikeable – something that research suggests matters a great deal electorally as politics even in parliamentary systems has arguably become more ‘presidentialised.’ Unsurprisingly, perhaps, around six out of 10 British voters now think Truss should step down.
The problem is, of course, that the only people who can make that happen are her own colleagues on the Conservative benches at Westminster. But in reality it’s not as big a problem as many imagine.
The party’s rules say MPs can’t try to vote their leader out for a year. But those rules can be easily changed by MPs themselves – and they will be if she refuses to go voluntarily.
True, Conservative MPs know they cannot then inflict another full-blown leadership contest on the country. But they also know those same rules can, if necessarily, be flexed to ensure that grassroots members of the party are cut out of the process.
Currently, as happened over the summer (and back in 2019) MPs first vote to decide on two candidates who then go through to a ballot of all party members. But there are several ways of avoiding that ballot.
MPs could negate the need for even a parliamentary vote by agreeing on who should take over. Or, should the fact that at least three or four of their colleagues are clearly interested in the job render a ‘coronation’ impossible, they could hold that vote and agree that whoever finishes second should concede defeat. Or they could set the nomination threshold so high at the outset that only one candidate enters, and therefore wins, the race.
‘Where there’s a will, there’s a way’, as the saying goes. Most Conservative MPs are now thinking not about whether they should replace Truss as prime minister but about how – and when. It could be sooner. It could be later. But make no mistake: Liz Truss’s days are numbered.
Tim Bale is Professor of Politics at Queen Mary University of London and author of the book “The Conservative Party after Brexit: Turmoil and Transformation,” due out in March 2023.