The plan of the British government led by Liz Truss to get out of the crisis not only provoked chaos in the economy of the United Kingdom and brought down the pound sterling, but also caused talk about the possible resignation of the head of government. Dissatisfaction with Mrs. Truss, who has not yet worked in her new post for four weeks, is growing, including among her colleagues in the Conservative Party. At the same time, the prime minister herself is sure that the government is on the right track, and Russian President Vladimir Putin is to blame for the critical situation in the country.
Less than four weeks had passed since Liz Truss moved into a residence at 10 Downing Street, and deep dissatisfaction with her rule had already gripped the United Kingdom. The reason for this is a stimulus plan to overcome the energy crisis, presented by Finance Minister Kwazi Kwarteng on September 23.
According to this plan, the government intends to drastically cut taxes, because of which the state budget will miss about £45 billion a year.
And then only the “declaration of intent” of the cabinet turned into a sharp drop in the pound sterling, which almost equaled the dollar. The last time the pound, which cost, for example, as much as $2 in 2008, fell as low against the dollar back in 1985. In addition, there was a significant decline in demand for UK government bonds.
Despite this, Liz Truss and Quasi Kwarteng remained silent for several days, which only increased outrage from citizens, the opposition, local and European financiers and even members of the ruling Conservative Party. On September 29, the prime minister finally spoke. And she did it in such a way that, it seems, even more heated the situation. At the very beginning of an interview on BBC radio, Mrs. Truss, apparently trying to set her listeners on a positive note, said that she had slept well and was “glad to be here.” Journalist Rima Ahmed, recalling the record fall of the pound, calls for the IMF to review the plans of the Cabinet of Ministers and the already made currency interventions by the Bank of England for £65 billion to support the market, asked the prime minister: “Where have you been?” Mrs. Truss replied that “the government had to take drastic measures”, otherwise people would have received electricity bills of up to £6,000 in winter. The correspondent specified that the population had not heard from the prime minister for four days. But in response, she only offered to be content with the fact that she was “now here.”
“It is important that the actions of the British government were aimed at protecting people from high electricity prices in order to guarantee the operation of the economy … It is not only the UK that is facing difficulties, this is a global problem,” Liz Truss justified.
And already on Norfolk Radio, presenter Chris Gorham asked if the prime minister could assure listeners that he understands the problem better than the IMF and the Bank of England, who criticized her government’s plan. But even here Mrs. Truss was adamant: “I must do what I believe is right for the country and what will help move our country forward.” According to her, she does not intend to turn off the planned course. And in an interview with the Bristol branch of BBC radio, Ms. Truss even said that the British should blame Russian President Vladimir Putin “and the war in Ukraine” for the economic crisis in the United Kingdom.
No matter how hard Liz Truss tried to seem confident, experts and ordinary citizens were not reassured by her explanations, but rather frightened even more.
British social networks, as reported The Guardianwere filled with messages indicating that users regarded the prime minister’s speech as a “disaster”, and her position was considered “out of touch with reality.”
And the American economist, Nobel Prize winner Paul Krugman wrote on Twitter the day before that “trasonomics (similar to Reaganomics.— “uh”) is extremely stupid.
Meanwhile, economic chaos and the long silence of Downing Street have provoked a new round of political crisis. A few days ago, the TV channel Sky News referring to an unnamed ex-minister in the government of Boris Johnson, he said that MPs from the Conservative Party were already sending letters of no confidence to the 1922 committee (a special group of conservatives that dealt with, among other things, the procedures for electing the party leader) of no confidence in the prime minister. “They think that it will bring down the economy,” the source of the TV channel admitted. According to him, the current Cabinet of Ministers “is playing a high-level economy with people’s lives.” Another Conservative MP Rob Powell told Sky News that Quasi Kwarteng’s announcement of the acclaimed plan was a “stupid show”. He added that he was not aware of a coordinated move by the Conservative Party on a potential no-confidence vote, but did not rule out that “something could happen.”
Meanwhile, the opposition is sounding the alarm and demanding an urgent convening of the parliament, which from September 23 to October 11 is on vacation, traditional for this time of year, set aside for the organization of party congresses. If the break continues as planned, MPs will be unable to call ministers to account and challenge the government’s plan for several more weeks.
According to the leader of the Labor Party, Cyrus Starmer, Liz Truss is a threat to the national economy, and the government “plays for money” of the British.
Shadow Cabinet Treasurer Rachel Reeves said on Sept. 29 that Ms. Truss’ radio appearances “made the catastrophic situation even worse.” She also urged Conservative MPs to join Labor and the other opposition in demanding that Downing Street convene Parliament urgently. According to her, Parliament should meet and cancel the implementation of the current government’s plan, and if the conservatives do not vote against the proposals of Liz Truss, then “become accomplices in this reckless economic self-flagellation.”
The prime minister also gets it in the British press. Yes, in The Guardian several columns appeared at once with very eloquent headings: “Traffonomics is childishly stupid, highway policy is even worse”; “I was a Conservative MP, but Truss and Kwarteng made me vote Labor”; “This is the Truss and Quarteng crisis, not yours, but you’re already a lot poorer because of them.” And in The Financial Times, for example: “The UK government’s plan is both a bad economy and a missed opportunity”; “The British Prime Minister’s experiment does not take into account real-world unforeseen consequences,” etc.
As sociology shows, the confidence of the current Cabinet of Ministers that they are right does not convince voters. According to YouGov dated September 25, only 17% approve of the government’s activities, while 62%, on the contrary, express dissatisfaction. And the credibility of Labor—in terms of their ability to generate economic growth—is more than double that of the Conservatives. So, 44% of Britons believethat the Labor government led by Cyrus Starmer will cope with the problem of a rise in the cost of living, and only 12% still believe in Liz Truss.