On the 23rd of September, Truss’s Chancellor Kwasi Kwarteng unveiled his mini budget. With this, Truss’s ideological fetishization of low taxes and high growth was stamped onto the UK’s foreseeable economic future. Indeed, writing in the Sun, Truss has argued that ‘for too long we have been stuck debating how to divide up the economic pie, rather than grow the pie so that everyone has a bigger slice’. As Kwarteng’s budget hit the markets, it seems Truss’s recipe for success has done nothing short of spoil her economic pie and upset her fellow bakers.

The mini-budget introduced the biggest tax cuts in 50 years, cutting top rate income tax from 45% to 40% and bringing forward the proposed fall in the basic rate of income tax. Whilst “mini” in name, it was unfortunately not “mini” in nature, evoking a strong reaction from the markets: the pound plummeted against the dollar and government bonds (gilts) rose from 3.5% to 4.3%, which prompted a £65 billion emergency bond buying programme from the Bank of England in order to protect pension schemes. This in turn led to an increase in interest and mortgage rates, spooking lenders and causing many to withdraw deals. The effect on both British and worldwide economies has been damning, with even Conservative leaning economists branding the budget ‘fiscal recklessness’, leaving in its wake immense political and economic damage.

On Monday, Truss, who had so adamantly refused to consider a U-turn on her policies, announced that she would be reversing a cut to the highest rate of income tax. Whilst the pound rallied following the decision, interest rates on mortgages remained high and the market failed to rebound. This U-turn has been revealing politically, but implements no major changes in Truss’s sweeping tax reform: top rate of income tax cuts accounts for only £2 billion in a £45 billion plan. With Truss’s U-turn barely scratching the surface of the £45 billion tax cut plan and public sector net debt at the highest it has been since the 1960s, it is still largely unclear as to where Truss expects to find the money to fund this mammoth “mini” budget. For 12 years, Conservatives have insisted that power should remain with the Conservatives since Labour cannot be trusted to deliver strong economic policies. Within 3 weeks, Truss has utterly shattered any credence this argument held. Instead, Truss appears to have attracted comparisons between herself and ex-labour leader Jeremy Corbyn – both ‘similarly foolish and ideological, but sporting a different rosette’. An obvious difference between these two politicians remains. Indeed Truss has not ruled out further welfare cuts and the potential for another round of austerity – it appears public services and those already struggling to heat their homes this winter will bear the brunt of Truss’s unfunded tax reforms. With an outstanding display of economic ineptitude, Truss appears to have reinforced recurrent images of conservative cronyism, and attracted criticism generally reserved for their fiercest opposition. 

Truss’s plan for the, in her words “growth, growth and growth” of the UK’s economy falls short of offering any substantive means to her alliterative end. The reversal of recent tax increases and lowered taxes for the wealthy marks a clear attempt to incentivise the supply-side of our economy. Evident in the financial market’s reaction, this simply does not correlate to the chancellor’s predicted “trend rate of growth of 2.5 per cent” a year over the medium term. Problematically, Truss’s fallacious growth agenda appears to trump all other politically charged issues, particularly on policies such as immigration and the environment. Truss’s plan relies on increased immigration, something sure to upset the right wing of her party that largely mandated her leadership: resistance to the proposal from Brexiter cabinet members Suella Braverman and Kemi Badenoch is already emerging. Truss’s growth focused agenda also appears to come at the expense of the environment, risking further divisions within the party. Truss’s decision to lift the ban on fracking, despite concerns over its profitability and safety, will likely shatter her party into even greater factions. Truss also appears to have made unlikely enemies with the RSPB following the decision in the mini budget to create “38 investment zones”. These growth oriented environmental policies have proved deeply unpopular with MPs, and with the likes of prominent Tory figures such as Michael Gove and Zach Goldsmith. Truss’s blind ‘growth, growth and growth’ mindset only seems to have grown further divisions in a weakening and factionalised Tory party. 

It seems Truss’s government has achieved something truly extraordinary. In three weeks, the UK’s credibility with global investors has been battered, the markets left volatile due to political uncertainty and the economic competence of the Conservative party eroded. With less than 0.2% of the population providing the mandate for her leadership, it will be interesting to see how the ever divided Conservative party props up their ‘true blue’ leader. 

Editor’s note: Since this article was written, the Government’s economic plan was almost completely ripped up. Soon after, Truss announced that she would be stepping down as prime minister, her 45 days in office being the shortest in history.

For more student perspectives check out the pieces below:

So, You Want to Run for Elected Office?

The Hypocrisy of Biden’s Plan to Seize Russian Oligarchs’ Assets

The Importance of Non-Violent Climate Activism