I’m not a fan of Liz Truss. (For me, Rishi Sunak was the lesser of two evils.) Yet I agree with commentators like Phil Pilkington and Chris Snowdon that the U.K.’s economic troubles are not primarily of her making.
Yes, combining tax cuts for high-earners with a massive energy bailout was never going to work – having racked up a huge amount of debt during the pandemic, it’s surely time to start balancing the books. But I doubt we’d be in a dramatically different situation if Truss had opted for fiscal prudence.
The country’s economic problems are much bigger than the now-largely-reversed Kwarteng mini-budget.
Housing is too expensive due to restrictive planning laws and years of mass migration. Energy is too expensive because of Net Zero and the self-harming Russia sanctions. And everything else is too expensive thanks to unchecked money-printing and supply chain disruptions under lockdown.
None of these problems would cease to exist if Rishi Sunak or Sir Kier Starmer were in No. 10. And in fact, things are likely to get worse – possibly much worse – before they get better.
Higher interest rates are going to wipe out mortgage-holders and over-leveraged companies. Alternatives to Russian gas may not be available until 2025 or later. And a lot more inflation is already ‘baked in’, if we’re to believe the modellers at Goldman Sachs.
What does all this mean? It means the best strategy for the Tories is to call a General Election, pass the baton to Labour, and then blame the country’s economic problems on them. Lose the battle to win the war, so to speak.
In recent weeks, the Tories have dropped sharply in the polls – from around 35% in the summer to less than 25% now. This shift is quite understandable: voters naturally punish the Government when economic indicators go south. And Truss hasn’t exactly helped her cause with a series of embarrassing U-turns.
Britain’s next general election is due to take place no later than January 2025. The problem with waiting until then is that Truss – and by extension her party – will have to own a lot more of the economic damage that’s coming.
An election now would be a bloodbath, but if the Tories hold off another two years, they could be out of power for a generation.
Stop Press: David Coates has written a similar piece for The Critic. He notes: the Conservative Party “has always remained an electoral force due to its reputation for economic credibility. When this is lost, the whole operation breaks down.”