Liz Truss’s first weeks as British Prime Minister were marked by the crisis. She had been at work for just 48 hours when news broke that Queen Elizabeth II was dead, putting the country into official mourning and delaying the official launch of the Truss plan for Britain.
Once that official mourning period ended last Monday, his government unleashed a wave of radical policies, culminating in the announcement of £ 45 billion ($ 48 billion) in tax cuts on Friday. The measures included scrapping the highest rate paid by the highest incomes, in adjustments that will benefit the rich far more than millions of lower incomes.
The rationale, according to the Truss government, is that the cut in personal and corporate taxes will trigger an investment boom and revive the British economy.
In an interview with CNN’s Jake Tapper last week, Truss defended his business plans by saying his government was “incentivising businesses to invest and we’re also helping ordinary people with taxes.”
UK Prime Minister defends tax cuts as pound plunges
But Truss’s plans seem to have backfired almost immediately. The pound fell to its lowest level in nearly four decades on Monday, eventually reaching parity with the dollar. It seems very likely that the Bank of England will raise interest rates, which will make repayments more difficult for those lucky enough to have mortgages, while those looking to get mortgages are already seeing products removed from the banks.
On Wednesday, the Bank of England announced that it would buy UK government bonds in an effort to “restore orderly market conditions” and prevent “disruption” following the cuts and subsequent collapse of the pound.
On Tuesday evening the International Monetary Fund (IMF) issued a rare reprimand for a developed country, criticizing the UK’s tax cut plans, saying it “will likely increase inequality”.
The chaos could not have come at a better time for the official opposition Labor Party, which held its annual conference in Liverpool this week.
By entering the conference, Labor was enjoying the polls it hadn’t seen since the last Labor Prime Minister to win the general election, Tony Blair.
The Labor Party has suffered greatly since it lost power in 2010. Its last two leaders have struggled with their personal credibility on a range of issues, from economics to security.
The party’s latest leader, Jeremy Corbyn, came from the far left of the party. He had previously associated with known extremists, opposed NATO, shared platforms with anti-Semites, and had generally existed on the fringes of politics for decades.
When his successor, Keir Starmer, took over in 2020, he realized his job was to remove Corbyn’s influence from the party and then hand it over to a new leader, likely closer to 2030 than the next general election scheduled in 2024.
This week in Liverpool, however, Starmer’s Labor legitimately looked like a government on hold. It is nothing short of extraordinary since not even a year ago Boris Johnson seemed the undisputed champion of British politics.
But after scandals have sunk his premiership and conservative approval ratings, the unassuming Starmer, a soft-spoken lawyer with a sleek haircut and meaningless clothes, really looks like he could be the UK’s next prime minister. .
In the two years of his leadership, Starmer managed to silence many of the elements of his party that Corbyn attracted. He went from being a home for far-left radicals to a party whose conference this week attracted corporate lobbyists who were only too happy to fund events and brush up against the potential next government.
And after years of accusations while Corbyn was in charge that Labor was somewhat anti-British, this year’s conference began with delegates singing the national anthem.
Those around Starmer are mitigating their optimism. The Labor Party has already smelled the power, only to be disappointed when the next general election has arrived. The UK, especially England, is a traditionally conservative voting country. Previous Labor governments gained power largely thanks to Scottish support.
This is nearly exhausted by the 2014 independence referendum, in which Scotland voted to remain in the UK by a margin of 55% to 45%. This left nearly half of the Scots unhappy and expressed their support behind the pro-independence Scottish National Party.
The Labor Party also has the form to make unforced errors. While this year’s conference went largely smoothly, a near-imminent crisis had to be dealt with.
On Tuesday, a video surfaced of a Labor MP calling Conservative Finance Minister, Chancellor Kwasi Kwarteng, “superficially” black. MP, Rupa Huq, had the party whip removed almost immediately, meaning she was expelled from the party and now sits as an independent. Huq later tweeted that she apologized to Kwarteng for the comments she described as “misjudged”.
And Labor Party members know full well that the Conservative Party plays politics better than most. The term “natural party of government” might seem strange given the chaos that is unfolding around Truss right now, but conservatives like to win at almost any cost.
None of this is providing much comfort to Conservative MPs, however.
“Every single problem we have now is self-inflicted. We look like reckless gamblers who only care about the people who can afford to lose the bet, “a former Conservative minister told CNN Wednesday morning.
Targeting the team around Truss, which is largely made up of libertarian conservatives, the former minister said: “We made the mistake of thinking that things that are good in free market think tanks go well with the free market. ”
Despite all that things are not going well for Truss, there is fear in Labor circles that the current poll is a reflection of conservative disapproval rather than enthusiasm for Labor. Many still wonder if Starmer really has the strength of personality to win enough voters to completely defeat the Conservatives in the next election.
This caution could arise from a reluctance to get on with oneself. And their doubts about Starmer may be the same reason some conservatives are quietly optimistic that Truss has more personal substance than his Labor rival and may simply overwhelm him in the future.
What is undeniable is that expectations in British politics have changed this week. For the first time in years, the upcoming elections are undeniably a loss for Labor.