The last time we went through the defenestration of a Conservative prime minister – what, three months ago? – a rapid judgment soon formed. Boris Johnson’s tenure had been short, it was agreed, but it had been consequential. At first glance, a similar verdict on Liz Truss’s 45 days in office seems improbable. She was surely in the top job too briefly to have any significance beyond her own long-term future as a pub-quiz question. And yet … To be sure, there is no record of positive achievement that Truss can boast. On the contrary, her accomplishment was to have smashed up so much so quickly, a feat of destruction whose velocity has rarely been matched in British political history. But there are other reasons to consider her ascent to Downing Street, and her actions once there, to be of the greatest consequence. For one thing, in those short few weeks, Truss may well have killed off an ideological project that has animated sections of the right, in Britain and across the democratic world, for the best part of half a century. The vision was of a low tax, low regulation society where the richest are freed to unleash their awesome talents and make themselves even richer. According to this vision – whether you call it Hayekism, ultra-Thatcherism, Reaganism or economic libertarianism – when the fortunate few at the top soar ever upwards, some of their wealth trickles down to those at the bottom. Versions of it have held sway at different periods in Britain, the United States and beyond. Now, though, such dreams will be branded as Trussonomics – and that label will be the kiss of death. In six short weeks Truss has discredited high-octane, free-market economics, perhaps for ever. She tried it, undiluted, as her ideological soulmate and chancellor Kwasi Kwarteng delivered a mini-budget on 23 September that was a magnum of full-strength trickle-down served neat, a plan that read less like a fiscal programme for government than a provocatively extreme pamphlet drawn up by the Institute of Economic Affairs (IEA) (or any of the other outrider organisations headquartered at Truss’s spiritual home, 55 Tufton Street).
Trussonomics removed the cap on bankers’ bonuses and slashed the taxes of the wealthiest, handing an average £10,000 to the highest-earning 600,000 people in the country: literally the 1%. It reversed a planned rise in corporation tax, just in case the boardroom was not feeling sufficiently loved. And it did all that in the name of unleashing the animal spirits of the free market, so they might be released to create “growth”. Except the animal spirits wanted nothing to do with it. The financial markets recoiled from a plan that would have seen the government borrow to pay not only for tax cuts but for Truss’s already announced £150bn spend on energy bills. They could see what Truss wanted to spend, but could detect no sign of how she hoped to pay for it. The price of government borrowing rose in real time, while Kwarteng was still on his feet. Money talked – and what it said to Truss and her chancellor was: “You don’t know what you’re doing.”
It is the turmoil that followed that will leave its mark. Sterling tanked; the Bank of England warned that interest rates would have to climb steeply. Overnight, Britain became a basket case, a distressed economy from which international investors wanted to stay well away. Every one of Truss’s assumptions – assumptions that have long entranced the ideological right – has been upended. No one is going to be grateful for a tax cut, since withdrawn, or even help with their energy bills, when they’re sweating over mortgage payments that are going through the roof – sent sky-high by an astonishingly reckless act of ideological dogma. From now on, anyone who preaches the old IEA gospel about tax cuts – in Britain or elsewhere - will first have to distance themselves from the catastrophe unleashed by Truss. Thanks to the Truss-Kwarteng ideological experiment, which turned Britons into lab rats, the world has seen what happens when you do what the right has demanded for decades. It leads to the opposite of growth, creating a massive black hole in the public finances, made wider and deeper by the increased cost of borrowing – a black hole that will be filled either by tax rises or spending cuts, both painful. Post-Brexit Britain was already a cautionary tale, a warning to the nations of Europe to do nothing so stupid as to leave the EU. Post-Truss Britain is a warning of a new kind: be careful of fevered, ideology-fuelled dreams, for they can bring ruin faster than you ever imagined. With breathtaking speed, Truss has discredited a more recent political project, one we might call Brexitism: the view that reality, including the laws of economic gravity, can be wished away, so long as you screw your eyes tight shut and believe. Truss was a remainer in 2016, but she embraced Brexitism as a zealous convert. While Michael Gove once suggested the country had had enough of experts, Truss railed against the stuffy “orthodoxy” that warned again and again that her plans would crash the economy. The fact that those warning voices were vindicated so fully and so quickly should deal Brexitism a fatal blow. It proves that what Brexitists like to cast as the boring, naysaying establishment sometimes says nay for a reason. After Truss, no one will again dare to issue any kind of fiscal statement without prior scrutiny by the Office for Budget Responsibility, lest it spook the markets – just as the Truss-Kwarteng sidelining of the OBR last month rattled the money men. The fact that Truss had to reach for a solid, orthodox, pro-remain figure such as Jeremy Hunt to calm the markets was itself a reading of the last rites for Brexitism. That should have an impact on populism itself. Truss and those who voted for her once sang hymns to the glory of “disruption”. They cast themselves as swashbuckling disruptors of the old order, a boast they’d been making since 2016. Which voters long for a disruptor now? The very word sounds like a synonym for arsonist. Orthodox, steady, stable, conventional: in the midst of an economic crisis crippling families’ finances, those are the highest compliments. Just look at what’s happened to Keir Starmer’s approval ratings.
Liz Truss did not have much time in office, but she didn’t need it to expose some awkward truths. One of them is that the Conservative party is exhausted and ungovernable, a collection of factions who can no longer function alongside each other: they don’t need power, they need group therapy. Wednesday’s resignation of Suella Braverman was telling: even those who backed Truss, who shared her (new-found) anti-EU obsessions, had unbridgeable differences with her and with each other. Truss wanted growth, even if that meant more immigration. Braverman admitted she had no fonder dream than a plane-load of migrants leaving for Rwanda. Today’s Conservative party has factions inside its factions. Not much of that has been concealed in recent years, but six weeks of Truss laid it bare. Those weeks also revealed the sheer emptiness of the Tory barrel, even after the bottom had been scraped. It was the Conservative backbencher Charles Walker MP, in a viral TV clip, who called the cabinet “talentless” – but the Truss era left no doubt. It wasn’t just the 10th-rate calibre of those given seats at the top table, chosen, as Johnson’s ministers were chosen, for factional loyalty rather than ability. It was Truss herself. Johnson – now threatening a comeback, one that would extend this hideous psychodrama for yet another chapter – has at least some obvious political gifts. But Truss was so conspicuously lacking in fluency, imagination or thought of any kind that it never stopped being a source of mystery and wonder that she was Britain’s actual prime minister. Even her resignation speech was lifeless and flat. And yet, the Conservatives, so used to hailing themselves as the world’s most successful political party, could do no better than her. In that way, she perfectly embodied what may be her lasting achievement. She will be the symbol of post-2016 Britain, a country that set itself on fire and became an object of derision, pity and sadness in the eyes of a world that once saw Britain as an island of reliable, if sometimes dull, solidity. She had only six weeks, but that was enough to send people’s bills soaring and their hopes falling. Britain is a smaller country than it used to be, and Truss – and the party so heedless of the national interest that they elevated her – are part of the reason why.