Liz Truss
British Prime Minister Liz Truss has announced her resignation, just a month and a half after taking office.
Thursday’s development came after her new Chancellor of the Exchequer, Jeremy Hunt, rolled back virtually all of her economic agenda.
Hunt’s move was supposed to be an impetus for growth, but it became Truss’s declaration of political bankruptcy.
At the beginning of this month, at the Conservative Party Conference in Birmingham, Truss had still attempted to rally the party around her controversial approach of boosting Britain’s economy.
“I have three priorities for the economy: growth, growth, growth,” she said.
But what was supposed to be a change from the tumultuous era of former Prime Minister Boris Johnson, a sense of chaos under Truss unravelled at a pace that is almost unprecedented in British history, Nicholas Allen, professor of politics at Royal Holloway, University of London, told Al Jazeera.
“Previous prime ministers’ central policies have unravelled very quickly, for instance – Neville Chamberlain’s leadership during the spring of 1940, Sir Anthony Eden’s Suez adventure, and David Cameron’s campaign to remain in the EU. I can also think of the backlash to Gordon Brown’s decision not to call a general election in the early autumn of 2007,” Allen said.
“But no new prime minister’s position has unravelled so early into their premiership or so catastrophically as Truss’s has over the last few weeks.”
The 47-year-old, who entered parliament in 2010, found herself in a first cabinet position in 2014 as secretary of state for environment, food and rural affairs under former Prime Minister David Cameron.
She since served under Theresa May and Johnson in various positions.
In 2021, she was handed the top role of foreign secretary.
After Johnson’s announcement to step down, she entered the leadership contest and won the race to succeed with 57.4 percent of the members’ vote against Rishi Sunak, who obtained 42.6 percent.
She promised radical tax cuts and high spending to curb energy prices, her very own version of supply-side economics.
According to her plan, one that her role models former British Prime Minister Margaret Thatcher and former US President Ronald Reagan successfully implemented in the 1980s – albeit under very different circumstances – lower taxes, particularly for the wealthy, lead to investments.
At the same time, she believed lower taxes benefit lower income brackets via a trickle-down effect, thus generating substantial economic growth.
However, when then-Chancellor of the Exchequer Kwasi Kwarteng presented Truss’s plans in a so-called mini-budget a few weeks ago, financial markets reacted in shock and incredulity.
The pound sank while UK government bond yields skyrocketed.
The Bank of England (BoE) intervened with bond purchases to reassure investors. Moreover, rising interest rates on home loans exacerbated what has already been a painful cost-of-living crisis for many Britons.
“The uproar surrounding hers and her then-chancellor’s mini-budget was driven by three factors: the sheer boldness in terms of what was being proposed; the perceived trickery surrounding the cuts, including the sacking of Tom Scholar, the Treasury permanent secretary, the absence of costings, and the decision to call it a mini-budget in order to avoid the scrutiny of the Office for Budgetary Responsibility; and the understandable reaction of the markets,” Allen said.
When the BoE announced it would cease its bond purchases, Truss felt compelled to act.
She dismissed Kwarteng last Friday before announcing a U-turn on plans not to raise corporation tax – an approach she had previously labelled as anti-growth.
