By Abhishek Khajuria

Barely 24 hours ago, Liz Truss, now the outgoing Prime Minister of the UK (just 44 days into her tenure, she has announced her resignation), struck a defiant tone amidst rock bottom public approval ratings and calls by her own Conservative MPs to resign after the disastrous “mini-budget” (presented by the now gone Chancellor Kwasi Kwarteng) which rattled markets and sent the Pound Sterling crashing down. Truss said she would rather ‘fight’ than quit, reminiscent of her predecessor Boris Johnson. However, while I was reading this statement of hers and paused and switched tabs to YouTube, I found that she had resigned moments ago. Things can happen very fast in politics indeed.

The seeds for the present state of affairs were already sown during the race to succeed Boris Johnson between Rishi Sunak and Liz Truss where both the Prime Ministerial hopefuls presented contrasting economic plans to get the UK out of the cost-of-living crisis caused chiefly by the effects of the Covid-19 pandemic and the War in Ukraine. While the former argued that it was important to bring inflation under control before resorting to any tax cuts, the latter promised that if she became the PM, she would immediately cut taxes among a slew of other measures to tackle the situation. Writing for this paper in September, I had argued that though Sunak’s plan made economic sense, it was never going to please grassroots Tory members.

Once elected for the top job, Truss started her tenure as promised though the initial days were disrupted as the country went into mourning after the death of Queen Elizabeth II. As the PM got to work, she and her Chancellor Kwasi Kwarteng presented the “mini-budget” which embodied Truss’s model of libertarian conservatism when it came to the economy. Tax cuts were announced for the rich, energy price capping, reversal of the increase in contribution to National Insurance among a host of other measures. The tax cuts announced were the highest in almost half a century.

The resulting shortfall in government revenue was to be made up by borrowings which raised eyebrows in certain quarters. It didn’t take long for the mini-budget to further send the economy into doldrums. As mentioned earlier, the Pound Sterling plummeted spectacularly which traded at its lowest-ever level to the US Dollar. In addition to that, bond yields rose and global investors went into a frenzy. The market was rocked essentially. Added to that, the latest numbers for inflation paint a very bleak picture with it being more than 10 percent. If it wasn’t for the Bank of England intervening to buy government bonds to the tune of 65 billion Pounds, who knows we might have been talking about a collapse of the pension funds in the country. Somewhere, a certain Rishi Sunak, on the Tory backbenches, might have been thinking, Hmmm, I was right after all.

The condemnation and the backlash were almost universal. Apart from the public, politicians and economists in the UK, the IMF also expressed its discomfort with the mini-budget, a rare instance of the IMF coming up with such a statement for a country, especially one like the UK. This led to a swift reversal of the measure concerning tax cuts to the tune of an additional 45 percent for the rich which led to an embarrassment for the Truss government after it had vehemently defended the full package of the mini-budget initially. But it neither led to any respite for the government nor the country. Push came to shove and Kwarteng was fired amidst calls for Truss to resign and coming into the media, the reports of the plans by the Tory MPs to push for a leadership change. Jeremy Hunt replaced Kwarteng and one of his first actions as the Chancellor was to dismantle the mini-budget and warn everyone to be ready for tough decisions from the Chancellor’s office in the days ahead, thus indicating spending cuts.

The political backlash has been severe too. Coming to Truss first, her approval ratings became the lowest ever of a British PM, hitting rock bottom at -70 percent net. Even her own Conservatives lost trust in her as she polled around -50 percent net amongst her party members in opinion polls. All this culminated, as mentioned earlier, in calls from the Conservative MPs for Truss to quit first inside the party and then, publicly by a few to which she responded in a defiant fashion.

However, the pressure was too much for Truss to ignore and she announced her departure from 10, Downing Street. Coming to the Conservative party now, opinion polls have shown that if elections were to happen today, the Conservatives would face a complete rout with the possibility of reaching even 100 seats a long shot. The messy handling of Brexit, scandals during Boris Johnson’s tenure, multiple changes in leadership over the past 6 years along with the present cost-of-living crisis have made a huge dent on the reputation of the Conservative party. The leadership styles of Johnson and Truss haven’t helped matters either.

The root cause of the present crisis is the attitude of Truss and her colleagues in the direction of populist solutions to the cost-of-living crisis as opposed to sustainable and long-term ones which would have held the economy in good stead. The populist solutions were essentially divorced from reality (and bound to hit the most vulnerable), as has been proven now over the course of the past one month, thus, culminating in the downfall of “Trussonomics” (as Truss’s economic policies have come to be known) and along with that, Liz Truss herself.

So, what happens next? In her resignation speech, Truss said that the next leader will be chosen within a week. The new leader will be the fifth in the last 6 years, symbolizing the instability within the Conservative party. As of now, the resignation of Truss has opened up a path for Rishi Sunak, the ex-Chancellor to have another go at the top job. Another favorite is Penny Mordaunt, the present leader of the House of Commons, who was also a hopeful to succeed Johnson earlier. A joint ticket from the two cannot also be ruled out as the Conservatives will be desperate to present a united front to the public at such a crucial time.

Read More: In Liz no trust! It’s Rishi Sunak vs Boris Johnson vs Penny Mordaunt as Truss’ resignation sparks UK crisis

In the case of a joint ticket, one of the two would become the PM and other would most likely become the Foreign Secretary as the job of the current Chancellor, Jeremy Hunt seems secure (who himself has ruled out running out for the top job; though you never say never in politics). Though a few other names are also doing rounds, it is Sunak and Mordaunt who are the frontrunners at the moment. If a consensus is not arrived at, then voting among the Conservative MPs would determine the successor to Truss. If even this doesn’t work, the only way will be a fresh general election as the leader of the opposition Sir Keir Starmer of the Labour Party has already argued for. However, as already indicated above, it will be in the best interests of the Conservatives to avoid a general election at present.

Eyes of commentators will be glued to their screens for the next week as the situation unfolds in the UK. But one thing can be said for sure, the resignation of Truss marks another symbol of the chaos and the sad state of affairs which the country finds itself in today.

Author is a PhD Candidate at the Centre for European Studies, School of International Studies, Jawaharlal Nehru University, New Delhi.

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