Liz Truss fell because she was elected on a lie. Not the kind of lie Boris Johnson routinely told – the blatant tactical fib – but the strategic lie, believed by millions of people and encoded in the textbooks: that the small state is the only route to growth and that redistribution is both economically and morally wrong.
She clawed her way to the front of the Conservative leadership contest by repeating this doctrine without nuance. And 81,000 party members drawn from the white, suburban, selfish middle classes backed her because the lie is their gospel.
Truss assembled a cabinet of randoms – mediocrities elevated by accident through the Tory careers system. Their only common feature was petty vindictiveness and belief in the lie: Suella Braverman fantasising about the deportation of refugees to Rwanda; Thérèse Coffey allegedly refusing to publish a plan to protect kids from smoking; Ranil Jayawardena, cancelling Britain’s solar energy programme by diktat.
Then the lie met reality. Kwasi Kwarteng‘s attempt at a massive, unfunded giveaway Budget fell apart because it respected neither the institutions of fiscal governance nor fiscal and monetary reality. The run on government bonds, the showdown with the Bank of England and Kwarteng’s subsequent sacking were plot points predicted by everyone but Truss and her deluded team.
The chaotic interregnum between Kwarteng’s fall and Truss’s tells us something profound about the Tory party. It is out of ideas and out of people talented enough to develop new ones. They have tried soft Brexit plus austerity (Theresa May); hard Brexit plus the big state (Johnson); hard Brexit plus the small state (Truss); and will now be forced to try hard Brexit plus austerity.
But it will not work. The problem is hard Brexit. There is no possible variant of the 21st-century growth model that will work under conditions of mutilated trade with Europe, in a period where the world economy is de-globalising, where the cost of credit is rising and where the household economy has been made fragile by decades of inequality.
Truss was right about the need for growth. In a country like ours, with stagnant productivity, flatlining investment, falling trade, a deflating currency and its poorest communities at breaking point – something radical needs to happen.
On 31 October the next prime minister will need to get a Budget statement through parliament that mandates £30-40bn worth of tax rises and spending cuts. That’s if they follow the logic outlined by Jeremy Hunt in his first days as Chancellor.
But it won’t solve the problem. What solves the problem is rapid and pro-active alignment with the EU, strong fiscal and monetary institutions, re-engagement with Europe on security and energy policy, and a 20-year programme of state-led investment with the aim of greening the economy and retraining the workforce. It involves rejecting the logic of austerity, revising the fiscal rules to allow slower deficit reduction, and convincing the bond market it will work.
That just happens to be Labour’s programme, and could easily be the programme of a Labour-led coalition of progressive parties. If the Tories dare call an election it would certainly be the programme of the resulting government. The tragedy is that, with imagination, it could have been the programme of a progressive Tory party.
So what is needed from the likely contenders in the MP-only ballot for the next head of the Conservative Party is the ability to learn and lead. I don’t care what any of them says in public: we, the public, do not matter for the next seven days. Someone has to convince Conservative MPs that hard Brexit is a disaster and neo-Thatcherism a dangerous fantasy. We’re socio-economic sitting ducks in Vladimir Putin’s energy war with the West. Many of our poorest communities feel fragile and wracked with despair. So I’m not celebrating Truss’s demise.
I know how nice it must be to be cocooned in a world of red boxes, dark-windowed Range Rovers and drinks at the Carlton Club. But for the sake of the country: if the Tories can’t find an inspirational leader who will junk free-market dogma and economic nationalism they should quit now, before the political chaos that’s engulfed their party engulfs the governance of the country.