It should have been Liz Truss’s moment of triumph, her chance to bask in the glory of a whooping crowd.
Yet victory, when it came, felt curiously flat. Gone was the bouncy, confident, shoot-from-the-hip Truss who emerged over two long months of hustings, after a wobbly start. When Britain’s new prime minister rose to the lectern to embrace a narrower win over Rishi Sunak than expected – narrow enough to make you wonder if he could even have won, had he played it differently – the old, slightly flat, stilted speaking manner was back. In Truss, that’s a sure sign of nerves. Perhaps only now does she feel the weight of what lies ahead.
When loyal Tories struggle for nice things to say about Boris Johnson, they often fall back on claiming that at least he got the big calls right. That cliche may be hard to square with the chaotic reality of his time in office, but they reach for it because the absolute minimum expected of a prime minister is that they inspire confidence in a crisis. When the proverbial hits the fan, we all have to hope their gut instincts will be right, whatever else we disagree with them over. What’s unusual about Truss is that her first move on taking office will effectively be to acknowledge that at the start of her leadership campaign she got the big call wrong.
She won’t put it that way, obviously, when she addresses the nation on Tuesday. But however valiantly she now tries to rewrite history, the fact remains that she horribly misjudged the cost of living emergency at first, insisting it could be handled merely with tax cuts and scrapping the green levy on fuel bills. Thankfully she now seems to have been persuaded that a much bigger and more direct intervention will be needed, and if the mooted £100bn plan includes swallowing her pride and adopting Labour’s popular strategy of freezing fuel bills, then millions will heave a sigh of understandable relief. By doing so she may not only save the poorest from destitution this winter, but help build the confidence and certainty needed to halt an otherwise catastrophic spiral. If nobody knows what the next few months may bring, then even those with money to spare will stop spending it, with disastrous knock-on consequences for the wider economy.
But the fact remains that her initial gut instincts were wide of the mark, leaving her with alarmingly little time to bolt together a complex rescue package. None of this inspires confidence. Her biggest challenge is to defy the expectations of those already worried that she isn’t up to it, inside and outside her own party. Unusually for a Conservative prime minister, that will mean battling to win the confidence not just of voters but of the markets.
There are audible jitters in the City, not just about the likely scale of borrowing under a Truss government but its intellectual heft, experience and general ability to cope with what’s coming. The pound hit a 37-year low against the dollar today, while gas prices surged 35%; gilt yields are rising (which pushes up the cost of borrowing), business activity contracting, and markets are not rallying in the way you might expect if the City really believed Truss was about to unlock a golden era of growth fuelled by tax cuts. Business leaders like stable politics, offering some certainty about what conditions they’ll be operating under. Instead, they’ve had six years of post-Brexit volatility followed by a new prime minister whose first act is a screeching handbrake turn, backed by a novice chancellor and the risible prospect of Jacob Rees-Mogg as business and energy secretary.
It remains unclear how Truss would pay for a massive bailout on top of the promised tax cuts from which she cannot retreat without triggering mutiny within her party. But so far, her thinking seems to involve borrowing on a scale that when advocated by Jeremy Corbyn triggered doomsday warnings of slashed national credit ratings, maybe even a full-blown sovereign debt crisis and the humiliation of an IMF bailout. If we’re lucky, we’re about to discover that those warnings were overblown, that balancing the books doesn’t matter as much as convention dictates, and that who dares wins. If not, we’re about to discover that driving head-on at a brick wall usually ends in a crash, possibly of Black Wednesday-sized proportions.
When she gets into Downing Street and finally opens up the books, maybe Truss will simply recalibrate. But she’s certainly stubborn enough to consider charging head-on at the Treasury, the Bank of England, the independent Office for Budget Responsibility and the mainstream economists she scornfully accuses of practising stale “abacus economics”, or insisting on making everything actually add up. Talk of establishing an independent council of economic advisers suggests she will seek rival sources of wisdom, having already raised eyebrows by citing the likes of the 79-year-old former Thatcher adviser Prof Patrick Minford in her support. Johnson’s preferred brand of populism pushed the law, the courts, parliament and the media to their limits, revealing just how ill-prepared many institutions were for someone who didn’t play by the rules. Under Truss it may be the turn of economists and central bankers, facing the kind of onslaught they never expected from what once (though it seems a long time ago now) called itself the party of business.
Unlike Corbynism, meanwhile, Trussism could combine lavish borrowing with painful spending cuts, given that departmental budgets fixed at a time of low inflation will surely need revising now that the costs of everything from construction to public sector wages have shot up. One of the most telling aspects of that speech was when she promised to “deliver” on the NHS and then stopped in what felt almost like mid-sentence. Deliver what, exactly, and how? She couldn’t say.
Politics is often a leap of faith, a triumph of hope over cynical experience. But now as never before, we are being asked to put our trust in Truss’s judgment; to believe that she is a visionary, more brilliantly far-sighted than any expert she dismisses, possessed of some magic elixir for growth that has eluded everyone else (including previous Tory administrations who have, as Sunak kept plaintively saying, slashed corporation tax out of similar ideological conviction but been disappointed with the results). It is a hell of a gamble she is taking with all our lives, against daunting odds. For a split-second, as she stood on that strangely lonely podium, it looked almost as if she knew it.
Gaby Hinsliff is a Guardian columnist
Guardian Newsroom: What does Liz Truss’s leadership mean for the UK? Join our panel including Hugh Muir, Jessica Elgot, Owen Jones and Salma Shah as they react to the announcement of the new PM in this livestreamed event. On Tuesday 6 September 8pm BST | 9pm CEST | 12pm PDT | 3pm EDT. Book tickets here
Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 300 words to be considered for publication, email it to us at guardian.letters@theguardian.com
