Instability, Inconsistency, and Incompetency: The Story of the Rise and Fall of the Liz Truss Administration

Rishi Sunak photographed leaving Parliament after winning the office of Prime Minister in the most recent Parliamentary Leadership Contest. Source for image: CNBC

On October 20th, 2022, news broke that Liz Truss, the leader of the Conservative Party in Britain, had stepped down as prime minister of Parliament following a record breaking stint of only 45 days in office. Those 45 days were the shortest term ever for a prime minister, and her departure from office and the brief legacy she left behind has sent the country into a spiral. These events beg the questions: what happened to Liz Truss, and what does her departure mean for the British government and all of its citizens? 

Prior to her election, Boris Johnson had been the prime minister since 2019, but a host of scandals and allegations caused his political career to take a sharp turn as he resigned on July 7th of this year following a public wave of pleas for his resignation. In the wake of his resignation the Conservative Party had to find a new leader. Unlike in the United States, British prime ministers, who serve as the head of state, do not have a vice president or vice prime minister. Therefore, when a prime minister resigns from office before their term is up the ruling party has to elect a new one. This is done in a unique way known as a leadership contest where a candidate must receive 100 nominations from the party in power in order to be considered. If more than one person receives 100 nominations it is put to a vote of roughly 160,000 dues paying members of the political party that the candidates represent. Liz Truss was one of the candidates to emerge early following Boris Johnson’s resignation, and she campaigned on a platform that emphasized positive change and stability. Some of the policies that she ran on included promises for a plan to help businesses and families deal with the country’s soaring energy costs, as well as plan for a new budget which was supposed to put the money back in the people’s pockets. 

Truss was sworn into office on the 5th of September, after beating out opponent Rishi Sunak in a contest that was much closer than many news outlets had predicted. Her first act as prime minister was to issue an energy support package aimed at freezing energy bills at a £2500 average for the next two years. This was one of the largest government interventions in the economy since the 2008 financial crisis, and it faced immediate backlash. Many of its critics were quick to point out that this bill would give wealthier families nearly twice as much support as poorer ones. When asked about this glaring hole, Truss simply shrugged off reporters and refused to give clarity as to why this bill would help resolve the high costs of energy that the country has been facing and was quoted saying there was “plenty of evidence that the tax cuts would boost economic growth.” When asked about the fairness of the bill, specifically the elimination of the 45% income tax for top earners she simply said, “It's not fair to have a recession." Shortly after this bill was released, Queen Elizabeth II passed away, which sent the country into a mourning period that included a government shutdown. This would stall Truss’s premiership for 10 days. 

Following the country's mourning period, Truss picked up where she left off and released another bill which contained the largest tax cuts in the UK in the last fifty years. With these tax cuts came an influx of government borrowing, which in turn diminished the British government's bonds as well as the value of Sterling. To compound the issue, it was later reported that Truss did not consult the Bank of England about these cuts. Typically, when releasing a bill such as the tax cuts that Truss did, it is common to consult the Bank of England such as when former Chancellor of the Exchequer, George Osborne did so to approve the loosening of England's Monetary policy in 2013. They were completely unprepared for an economic crash, and, as a result, the International Monetary Fund had to intervene and bought £65 billion worth of gilts, government liability in Sterling, in order to save numerous pension funds that were near collapse. The introduction of these tax cuts were one of the first notable acts in Truss’s reign as prime minister and the public was outraged. Her opposition, the Labour Party, even went so far as to call it a “Kamikaze Budget”. The public opinion of these cuts was reflected in a survey taken by the polling firm YouGov which showed that she had a negative 71% approval rating by October 6th.  She defended herself in the days following the bill by stating that urgent action was required to jumpstart the economy, but was unable to give an explanation as to why the tax cuts would help. 

On October 3rd, a mere 10 days after the tax bill had been put into action, she and her chief economic advisor, Kwasi Kwarteng, released a statement revealing that they planned to repeal the tax cuts due to lack of party support and public strife. At this point in time, party and public confidence in Mrs. Truss and her administration had been fundamentally shaken and in an effort to gain back some confidence in her leadership, she pushed up the British government’s budget release to the end of the month. This move came in an effort to give the British public a more clear plan of how the government was going to tackle its current economic crisis and was supposed to instill confidence in the British people. This budget update however, did not deliver, as shortly after the release of the budget date, she repealed her statement from the 3rd and stated that the tax cuts would stay in place and there would be no dip in government spending. 

This was the second u-turn made on her economic policies, and both the public and the conservative party were growing increasingly concerned. In response, she fired Kwasi Kwarteng, one of her oldest friends and advisors, because he had worked with her on the economic policies that were causing strife in the country. He was replaced by Jeremey Hunt, who, three days into his new role, revealed that the planned tax cuts and “mini-budget” that had been created by Kwarteng and Truss was to be shredded, and that a new economic plan would be released on Halloween, the new day that Truss decided would be the budget release. 

Now facing immense criticism from nearly every news outlet in Britain and members of her own party, it seemed likely she would have to step down. In a speech given on October 19th, Truss stated that she was “a fighter and not a quitter.” Less than 24 hours later, on October 20th, she resigned as prime minister. 

After her departure the country was in shock, as they now needed a third prime minister in almost as many months. The Conservative Party had another leadership contest and 5 days after Truss’s resignation Rishi Sunak was elected. Prime Minister Sunak enters into uncharted waters as the country is facing its worst financial crisis since 2008, and is experiencing public unrest due to the flippant nature of Truss’s premiership. He also enters office as the first person of color and first Hindu to hold the position, and, at age 42, he is the youngest prime minister the country has seen in over 200 years. Sunak, who served as financial minister during the COVID-19 pandemic, has pledged to use his experience guiding the country's economy through the pandemic to help aid him as he tries to amend their current financial crisis. 

At the time of writing Sunak has only spent 2 weeks in office and has yet to draw quite as much attention as Truss did during her first two weeks as prime minister. During the past two weeks he has stayed busy, pushing the budget release date back to November 24th, up from October 31st. In his first few weeks he has sought to help resolve an ongoing refugee crisis that affects both Britain’s neighboring country France as well as Britain itself. He and French President, Emanuel Macron, have been working to limit the number of refugees traveling from France to England in small boats via the English Channel. It has been reported that they are in the “final stages” of getting a deal established.  He also recently attended a climate summit, the 27th Conference of the Parties of the UNFCCC, in which he stated that the struggle against climate change can become "a global mission for new jobs and clean growth." 

Sunak has plenty more to do as Prime Minister as he tries to pick up the broken pieces of both the British government and economy, it will be interesting to see how he chooses to lead the British out of turmoil. Whether he looks to solving the energy crisis that continues to plague the country, or potentially a new budget which restructures the unpopular tax cuts that Truss implemented, he certainly has his work cut out for him. He also must work closely with both his party and his opposition to restore public faith in the British Parliament’s ability to lead as well as providing some actual continuity for the people of the United Kingdom.