Trussonomics

Liz Truss's term as the prime minister of the United Kingdom began on 6 September 2022 when she accepted an invitation of Queen Elizabeth II to form a government, following the resignation of her predecessor Boris Johnson after a government crisis, and ended on 25 October 2022, following her resignation amid another government crisis. While serving as prime minister, Truss also served as the first lord of the treasury, minister for the civil service, minister for the union, and leader of the Conservative Party.

Truss defeated Rishi Sunak in the Conservative Party leadership election to succeed Johnson, who resigned amid a government crisis. To tackle the ongoing cost of living crisis and energy supply crisis, her government announced the Energy Price Guarantee to limit energy prices for households, businesses and public-sector organisations. Truss's government announced large-scale borrowing and tax cuts in a mini-budget. The mini-budget was widely criticised and largely reversed, having led to financial instability. Facing mounting criticism and loss of confidence in her leadership, Truss announced her resignation as Leader of the Conservative Party; Sunak was elected unopposed as her successor, and succeeded her as prime minister.

Truss was the last of 15 prime ministers to have served under Elizabeth II, having been appointed two days before Elizabeth’s death. She is the shortest-serving prime minister in the history of the United Kingdom and had the lowest approval ratings of any UK prime minister in history.

Conservative leadership bid

Truss launched her bid to succeed Boris Johnson on 10 July 2022. During the July–September 2022 Conservative Party leadership election, Truss pledged to cut taxes by scrapping the National Insurance rise that had previously been announced in April 2022, scrapping the recent corporation tax rise and she also promised to remove green energy levies. During the campaign, when asked whether French President Emmanuel Macron was a friend or foe, Truss replied that the "jury was out" and that she would judge Macron based on his "deeds not words". During a hustings event, Truss suggested that it would be best to ignore the "attention seeker" Scottish First Minister Nicola Sturgeon before rejecting the possibility of a second independence referendum for Scotland.

On 20 July 2022, Truss finished second in the fifth round of voting amongst the Conservative Parliamentary Party with 113 votes behind Rishi Sunak with 137 votes, qualifying her for the final vote amongst the membership. Truss defeated Rishi Sunak in the members' vote with 57.4% of the vote against Sunak's 42.6%. She was elected on 5 September 2022, assuming office on 6 September 2022. She became the fourth consecutive Conservative prime minister since 2010, and the third female prime minister, following Margaret Thatcher and Theresa May. Following the announcement there were protests in London.

Premiership

First speech and initial appointments

Truss made her first speech as prime minister in Downing Street on 6 September. In the speech she thanked and praised Boris Johnson, and focused on economic growth, similar to during her her campaign. Truss also stated the need for an energy plan as well other foreign policy statements. During her speech protesters outside Downing Street attempted to drown out Truss by playing loud music.

With the appointment of Kwasi Kwarteng as Chancellor of the Exchequer, James Cleverly as Foreign Secretary, and Suella Braverman as Home Secretary, for the first time in British political history, no white men held positions in the Great Offices of State.

Other key appointments included Thérèse Coffey as Deputy Prime Minister and Health Secretary, Brandon Lewis as Justice Secretary, Nadhim Zahawi as Chancellor of the Duchy of Lancaster, Chris Heaton-Harris as Northern Ireland Secretary, Jake Berry as Minister without Portfolio and Party chairman, Jacob Rees-Mogg as Business Secretary, Simon Clarke as Housing Secretary, Kemi Badenoch as Secretary of State for International Trade, Chloe Smith as Work and Pensions Secretary, Kit Malthouse as Education Secretary, Ranil Jayawardena as Environment Secretary, Anne-Marie Trevelyan as Transport Secretary, and Michael Ellis as Attorney General for England and Wales.

Truss retained Ben Wallace as Defence Secretary, Alok Sharma as President for COP26, Alister Jack as Scotland Secretary, Robert Buckland as Wales Secretary, and James Heappey as Minister of State for the Armed Forces and Veterans.

In September 2022, Truss's chief of staff Mark Fullbrook was revealed to have been questioned by the FBI regarding an election bribe in Puerto Rico.

Death of Queen Elizabeth II

Truss was the fifteenth and final Prime Minister to serve under Queen Elizabeth II, with the Queen dying two days after appointing Truss as Prime Minister. Queen Elizabeth II's death at the age of 96 was announced by Buckingham Palace on 8 September 2022 at 18:30. Truss delivered a statement outside 10 Downing Street paying tribute to the Queen, stating that "Queen Elizabeth II was the rock on which modern Britain was built." A 1994 clip emerged around this time of Truss branding the monarchy "disgraceful" and advocating for republicanism when she was the president of the Oxford University Liberal Democrats.

On 9 September, the House of Commons began two days of special tributes to the Queen and started the suspension of Parliament until 21 September during the national mourning period. On 10 September, Truss attended the Accession Ceremony of King Charles III and took an oath of allegiance to the King with fellow senior MPs. On 12 September, King Charles III addressed Parliament for the first time as monarch. Truss attended the state funeral of Queen Elizabeth II at Westminster Abbey on 19 September 2022, where she read a lesson during the service.

Cost of living crisis and energy policies

In response to the UK cost of living crisis, Truss set out plans to launch the Energy Price Guarantee, a scheme to freeze energy bills at an average of £2,500 a year for two years to support homes and businesses through the crisis. Truss stated that the government would fund the scheme by reducing the unit cost of energy through increased borrowing. The initiative was forecast to cost approximately £150 billion in taxpayer funds to energy suppliers to make up the difference between what they pay for power in the wholesale markets, and the capped consumer prices. Additionally, it was announced that green levies worth on average £150 per year would be removed temporarily. To fund the scheme, the Labour Party had proposed a windfall tax on excess profits of energy companies; however, Truss rejected these proposals claiming that it would deter investment. Truss claimed that her proposals would save each household £1,000 a year on average.

As part of Truss's cost of living proposals, energy resilience was also highlighted as a priority including plans to lift the moratorium on fracking for shale gas in the near future and launching a new round of approximately 100 new oil and gas licences. Equally, Truss planned to accelerate new sources of energy supply including nuclear, wind and solar energy. Many northern Conservative MPs oppose ending the moratorium on fracking. Mark Menzies leads this group and Menzies insists fracking has no local support.

Industrial relations

Throughout Summer and Autumn 2022, several railway strikes took place, after a ballot of National Union of Rail, Maritime and Transport Workers (RMT) members over whether they should take industrial action. The dispute between the government and rail companies were concerning pay, redundancies and changes to terms and conditions. The RMT suggested that salaries should increase due to the ongoing cost of living crisis. Furthermore, the RMT highlighted the issue of redundancies with Network Rail planning on cutting 2,500 jobs within the next two years.

2022 mini-budget

In response to a stagnant economy, a mini-budget was announced in September 2022 with "growth" as its key ambition. It led to a run on sterling, a fall in gilt markets, lost confidence among global investors and criticism from International Monetary Fund (IMF).The mini-budget that broke Britain – and Liz Truss
''The Guardian'' It included measures in several sectors such as taxation, benefits, work and investment, stamp duty, energy, bankers' bonuses, shopping, infrastructure and investment zones. The package which was announced by Chancellor of the Exchequer Kwasi Kwarteng relied heavily on government borrowing. Goldman Sachs, Bank of America and the IMF among others were skeptical that £45bn unfunded tax cuts for the rich could lead to economic growth and pay for itself as the government hoped. Within the budget, Kwarteng removed the 45% rate of income tax paid by those earning more than £150,000 a year, reversed the rise in national insurance contributions and brought forward by a year the reduction in the basic rate of income tax from 20% to 19% planned for 2024 whilst also scrapping the cap on bankers' bonuses.

As part of the mini-budget, Kwarteng announced a cut on stamp duty. Buyers in England and Northern Ireland would pay no stamp duty on the first £250,000 of a property's value, with the previous threshold being £125,000. For first-time buyers, no tax would be paid on the first £425,000. However, experts said that the cut in stamp duty was unlikely to help first-time homebuyers to get on the property ladder and risked pushing up house prices further. Kwarteng refused to allow the Office for Budget Responsibility (OBR) to assess the economic impact of the mini budget prior to its announcement. Conservative, Mel Stride of the Treasury Select Committee, wanted independent forecasts published to “provide reassurance and confidence to international markets and investors”.

Following the mini-budget announcement, the markets reacted badly with the sterling and government bonds dropping significantly in response to a large increase in government borrowing. By 23 September, the pound had hit a 37-year low against the US dollar at below $1.10 whilst the FTSE 100 index fell by 2.3%. Andrew Wishart, at Capital Economics, said the market reaction to Kwarteng's budget suggested mortgage rates of more than 6 per cent were now a "distinct possibility". The Labour Party accused the Conservatives of gambling on the economy. On 27 September, the IMF also warned the UK government that it should re-evaluate the planned tax cuts announced in the mini-budget as they would heighten inequality and inflation in the country. Additionally, there was a strong public reaction with one YouGov poll on 29 September recording a 33-point lead for the Labour Party ahead of the Conservatives. Truss's personal approval rating were reported as minus 37, falling from minus 7 in one week, with 12% of people describing the mini-budget as a good policy.

In response, Truss and Kwarteng reversed the decision on the removal of the 45p of income tax for higher earners on 3 October following a significant backlash. Kwarteng was sacked by Liz Truss on 14 October 2022, appointing Jeremy Hunt as his replacement. Later that day, Truss held a poorly received press conference which lasted for eight minutes with Truss announcing that the previously planned corporation tax rise that she had campaigned to abandon during the leadership campaign would now go ahead. Truss said she decided on these changes as the mini-budget "went further and faster than markets were expecting".

Calls for Truss's resignation

According to the ''Daily Telegraph'', as of 17 October, there were at least five Conservative MPs calling for Truss's resignation: Crispin Blunt, Andrew Bridgen, Angela Richardson, Charles Walker and Jamie Wallis. In an interview with the BBC's Chris Mason that evening Truss said she was "sorry for the mistakes that have been made" but remained "committed to the vision". She also said she would lead the Conservatives into the next general election. On 18 October, Lord Frost, had also called for the Prime Minister to resign.

On 17 and 20 October, Truss had meetings with Sir Graham Brady, the chair of the 1922 Committee. The meeting on 17 October was stated to have caused Truss to miss an urgent question on the afternoon of 17 October requested by opposition leader Keir Starmer and granted by House of Commons Speaker Sir Lindsay Hoyle—with Leader of the House Penny Mordaunt answering on Truss's behalf. Truss's absence drew criticism from a number of MPs, including Starmer, although Truss later made a brief appearance in the House.

British tabloid newspaper '' Daily Star'' released a livestream of an iceberg lettuce on 14 October after ''The Economist'' compared Truss's term to "the shelf-life of a lettuce".

Resignations and vote on fracking

On 19 October, Home Secretary Suella Braverman resigned and was replaced by Grant Shapps. The resignation was triggered by Braverman admitting to having shared an official document through her private email account with a parliamentary colleague. In her resignation letter, Braverman expressed "concerns about the direction of the government" and added that she "had serious concerns about this government's commitment to honouring manifesto commitments".

On 19 October, Ed Miliband, a Labour Party MP, tabled a motion to introduce a bill to ban fracking in the United Kingdom. Truss pledged as part of her leadership campaign to lift the moratorium on fracking, yet some Conservative MPs had expressed concern about the change as it went against their 2019 manifesto. The motion would have allowed the opposition to control the business of the House of Commons, so the party whips strictly informed Conservative MPs to vote against it (a three-line whip). They were also informed that the vote would be treated as a confidence motion.

As the day progressed, 10 Downing Street became increasingly concerned about the potential size of the rebellion among Conservative MPs and informed the climate minister, Graham Stuart, that the vote would no longer be treated as a matter of confidence. Although he subsequently relayed this to the House of Commons, the whips' office were not made aware of the change, resulting in confusion and disarray among Conservative MPs.

Soon after, William Wragg became the sixth MP to publicly call on the Prime Minister to go. Several Conservative MPs did not vote against the motion. Confusion followed after the Minister Graham Stuart told Parliament "obviously this is not a confidence vote". Amid reports of Conservative MPs physically jostling their colleagues to vote against the Labour motion, the Chief Whip Wendy Morton and deputy chief whip Craig Whittaker were both thought to have resigned. Later it was clarified that they had not, and remained in their posts. An MP described the vote as "chaos" with claims, denied by cabinet ministers, that Conservative whips had manhandled and bullied backbenchers into voting against. Labour MP Chris Bryant made claims on Sky News saying that he saw MPs "physically manhandled through the voting lobby" naming Deputy Prime Minister Thérèse Coffey along with Jacob Rees-Mogg as those he saw in the "group". Later that evening, the Speaker of the House Lindsay Hoyle announced that he had asked the Serjeant at Arms and other parliamentary officials to investigate the allegations made about the incident. The motion was ultimately defeated by a vote of 326–230, with 324 Conservative MPs opposing it.

During Prime Minister's Questions on 19 October, opposition Labour Party leader Keir Starmer questioned why Liz Truss had not resigned, to which Truss responded: "I am a fighter and not a quitter."

Resignation and aftermath

On 20 October 2022 at 13:30, Truss resigned as leader of the Conservative Party. In her brief resignation speech, Truss stated that she could not "deliver the mandate on which I was elected by the Conservative Party". Truss confirmed that the subsequent leadership election would be held within the next week and that she would step down as prime minister when it concluded. On 25 October, Truss ceased to be prime minister on her fiftieth day in office. This made her Britain's shortest-serving prime minister.

In response to the resignation, Labour Party leader Keir Starmer, and leader of the SNP Nicola Sturgeon, called for an immediate general election. Calls for an early election were also echoed by the Liberal Democrats and the Green Party. French President Emmanuel Macron said "it is important that Great Britain regains political stability very quickly, and that is all I wish." US President Joe Biden thanked Truss "for her partnership on a range of issues including holding Russia accountable for its war against Ukraine".

Sunak returned for the impending Conservative leadership bid and was elected unopposed as Conservative Party leader and Prime Minister, with Truss congratulating him and saying he has her "full support."

Popularity

Following the Conservative Party conference in October 2022, Truss had an approval rating of −47% according to an opinion poll by ''The Observer''. This was worse than Boris Johnson's rating during Partygate and worse than Theresa May's rating before her resignation. 53% of voters thought Truss should resign and 25% wanted her to stay as Conservative leader.

An Opinium poll held between 26 and 30 September 2022 projected a Labour lead of 15 points, predicting the Conservatives to lose 219 seats in a general election including ten cabinet ministers.

As of mid-October, bookmakers were taking odds for the date of Truss's resignation. Bookmakers placed Sunak first in their list of likely Conservative prime ministerial successors, followed in order by Hunt, Mordaunt, Wallace and Johnson.

On 18 October 2022 a YouGov poll found that 77% of Britons disapproved of the Conservative government, the highest on YouGov record in eleven years. Furthermore, they stated that 87% of people believed that the government was handling the economy poorly. Their survey of Conservative Party members reported that a majority of them wanted Truss to resign, with their favoured front runners for her replacement being Boris Johnson as most popular, followed in order by Ben Wallace, Rishi Sunak, Penny Mordaunt, Kemi Badenoch, Jeremy Hunt, and Suella Braverman. Equally, a Redfield & Wilton poll registered a 36% lead for the Labour Party (the largest lead by any party since October 1997) and recorded Truss's personal approval rating at 9%.

International prime ministerial trips

Truss made two trips to two countries during her premiership.

See also

* Foreign relations of the United Kingdom

Notes

References

{{Liz Truss

Liz Truss
Truss, Liz
History of the Conservative Party (UK)
2022 in the United Kingdom
2020s in British politics
Contemporary British history