The U-turns from Prime Minister Liz Truss’s government are coming almost too fast to track. Some hope arose Monday that the speed of reversals may come down now after newly appointed Chancellor of the Exchequer performed the mother of U-turns – he abolished practically all of what Truss’s government had announced in that now much discredited mini-budget of September 23.
So all of the favoured policies Truss had repeated with much self-assuredness through those six weeks of campaigning for the post of Prime Minister are gone, one by one at first, and now all in a sweep announced by Chancellor Jeremy Hunt on Monday.
It hasn’t gone unnoticed that all of the reversals from the Truss government bring her policies exactly in line with what Sunak had pledged through the election campaign. Sunak lost that race, but his policies have won - through their adoption now by his opponent and now Prime Minister.
Following on from two early U-turns on Liz Truss’s earlier policy announcements, Hunt has gone yet further to U-turn on just about every significant policy decision announced in that now discredited mini-budget of September 23.
That mini-budget was announced by former chancellor Kwasi Kwarteng, who was sacked for it after a strong reaction against it from the markets. But those were Liz Truss’s policies he had announced that Truss had been promising all through her election campaign.
Major Reversals
In a third major U-turn on Monday the Chancellor said the basic income tax rate will stay at 20 percent, and not 19 percent as proposed in the mini-budget. That mini-budget had earlier announced dropping of the top rate from 45 percent to 40 percent. That was reversed soon after.
The next reversal came over corporation tax. Liz Truss announced in the briefest of press conferences that she will restore Rishi Sunak’s plans to raise corporation tax from 19 percent to 25 percent.
Sunak had proposed this to part-pay for the huge budget deficit that arose after the spending on the furlough scheme through the pandemic.
On Monday, Hunt announced more U-turns right across the board. Over VAT-free shopping for visitors as proposed in the mini-budget, over a freeze on alcohol duty rates, over cuts to dividend tax rates.
That other give-away by way of government support with energy bills is not abandoned entirely, not yet, but Hunt announced it will be reviewed. An extension of that beyond April next year now looks unlikely.
Quite suddenly it now seems Liz Truss, her government certainly, thinks the absolute opposite of what it thought and decided to do just three weeks back.
By early indications, these U-turns have calmed the markets for the moment. The government’s cost of borrowing came down a little on Monday though still not back to pre-mini-budget levels. These U-turns were no doubt rushed in to calm the markets. But it’s still not certain that they will deliver as intended for long.
Labour
Truss’s credibility has crashed, and more and more MPs from her party are demanding she must go. Conservative MP Crispin Blunt said “the game’s up” for Truss. Some other Conservative MPs have spoken up against Truss. And deep rumblings continue among the rest, particularly among MPs from marginal constituencies.
And there are 88 of these among the Conservatives, who got through with a narrow margin. They are most afraid that they can lose their seats in the next election.
Labour is now surging ahead of the Conservatives in the opinion polls. A recent poll shows support for the Conservatives dropping to 24 percent, 26 points behind Labour, which is enjoying the highest public support for the last 20 years.
Already, Labour leader Sir Keir Starmer looks far more prime ministerial than the visibly inept looking Truss. Some groans of discontent raised against Starmer earlier have now vanished. Labour is sensing a win coming their way here, and are silencing all within their ranks that could stand in the way of that.
The Conservative hope rests on a change of leader. By party rules Truss cannot be challenged for a year. But such is the discontent over Truss that campaigning has begun within the party to bring a change of rules to permit a re-election of the party leader. Unless Truss can win confidence back quickly, which appears most unlikely, the momentum to replace here will grow fast.
Also read: London Eye: Four reasons Rishi lost
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