The Truss project will now need to be revised. The question is what the new mission will look like and if it will take off at all.
Truss’s major party conference speech on Wednesday was his best performance yet in office, albeit crossing an exceptionally low bar. She managed to win some applause from her grumpy party (especially with lines targeting the ‘anti-growth coalition’) while seeking to reassure shaky markets by promising to have ‘an iron fist’ on the nation’s finances. .
Perhaps the moment Truss stood up, the members realized the government party looked slightly ridiculous. But even if peace breaks out momentarily in Birmingham, whether it lasts or spreads to the general public is another matter.
Taking off now is a huge request. Those who voted Conservative in 2019 are now twice as likely to have an unfavorable view of the Prime Minister (60%) than a positive one, according to YouGov. Truss’ net preference rating is lower than Boris Johnson’s at its lowest; and only a fifth of the public sees the Conservative Party in a favorable light. No wonder a divisive conference sparked talk of a “death spiral”.
Compared to the wet squib Kwarteng produced for her speech, Truss was forceful and unapologetic when she spoke. But although she laid out the what of her plans and the conservative doctrine of why, she could not answer the crucial question of how. Truss said her priorities were “growth, growth, growth”, but the reality is that she needs at least three things to be well in a very short time – more people working, more people building and more businesses investing.
Instead, she faces more people waiting for hospital treatment and worrying about their mortgages. And when people become insecure about health and housing, they become incandescent about government.
Proponents of Truss (a group in decline that seems to possess more courage than enthusiasm) say recent events should be seen as a false start rather than a collapse of systems. Perhaps, but the mood of his backbenchers when Parliament returns to session will be critical. If rebel MPs have decided that Truss is now a lame Prime Minister pursuing a lost cause and facing an essentially hung parliament, then achieving any of these goals will be a huge effort, let alone all of them.
Tory MP John Redwood told a sideline meeting that there are “a lot of fruits within reach” for the government to focus on. And yet, it is hard to see what Truss can announce to touch one of these three levers of growth which will not cause controversy within his party.
Take housing. The theme of the conference was ‘Getting Britain moving’, but those who want to move, or even stay at home, are pretty stuck at the moment. Mortgage rates hit 6% for the first time since 2008, putting many middle-class households under pressure as some 1.8 million fixed-term mortgages need to be refinanced next year.
More housing needs to be built, although this takes time and is more complicated in an environment of rising interest rates and higher construction costs. The government has made it clear that it wants to liberalize planning restrictions, but this has always been met with the red brick wall of local opposition.
To get more people to work, the government wants to force welfare recipients to do more to prove they are looking for work or trying to increase their hours. It could hit women – who make up 74% of part-timers in the UK and 57% of all those working part-time involuntarily – particularly hard. Penny Mordaunt, a cabinet colleague who was Truss’s rival for leadership, made it clear that she would insist that social benefits increase with inflation, making it unlikely that Truss would find savings on the protection side. social.
Making it easier for foreign workers to come to Britain, whether to work in biotech or hospitality, would help broaden the workforce in a tight labor market. But immigration remains a delicate subject for the conservatives.
Jacob Rees-Mogg, the arch-Brexiter who is now business secretary, told a crowd of loyal Tories at a meeting on the sidelines of the Institute of Economic Affairs that the government was accelerating plans for a fire joy of European Union rules designed to protect German industry. Regulating disposal is always easier in theory, however. The UK’s trade deal with the EU prevents regulatory changes that would distort trade or investment and prevents social, environmental or labor standards from slipping.
I kept thinking all week that Truss doesn’t look miserable at all, because one would expect her to know that her party has split into warring factions, parts of her cabinet seem in rebellion, the markets rejected his first tax ruling and the public is done with the Tories. But Truss seems thrilled to be prime minister, even as the country crumbles around her.
The generous reading is that it reflects his (optimistic, capable) character and Boris Johnson certainly had an element of that too. The less generous interpretation is that she is delusional and does not quite grasp the gravity of her situation.
No one would nullify the Tories completely; it is a party that has always been remarkably disciplined when it comes to winning votes. And Truss could be lucky with the global macroeconomic environment, or an escalation of the war in Ukraine could take the temper away from domestic issues.
But wherever she goes now, a Sword of Damocles will hover above her. The decision to reverse the top-rate tax cut on Monday set a precedent. Where there is a U-turn, there are almost always others to follow. Anyone opposing a Truss policy would now be encouraged to put their political shoulder to the wheel. Some of them have hardly been hidden about it.
Mars rover engineers now hope their design can go to the moon. Truss told the party that while some may not like the disruption that comes with change, everyone will benefit. She assumes, however, that she will have time to get her project off the ground.
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• The Bank of England should make a U-turn on the sale of Gilt: Marcus Ashworth
This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.
Therese Raphael is a columnist for Bloomberg Opinion covering health care and British politics. Previously, she was the editorial page editor of The Wall Street Journal Europe.
More stories like this are available at bloomberg.com/opinion