In a few hours’ time, Liz Truss will have to sit next to Jeremy Hunt as he announces the reversal of all but a handful of measures announced in Kwasi Kwarteng’s mini-Budget. It is the biggest and most rapid U-turn in recent British political history. The Prime Minister will sit there as her agenda – and the platform on which she ran for the leadership – is dispatched by the Chancellor, who is now her gaoler; just imagine the market reaction if he ever resigned.
It is a remarkable development and one that leaves Truss holding the seal of office, but not much more. Her intellectual and political project is over. She has committed the biggest unforced policy error since Suez – and one that will have almost as many ramifications for Britain’s role in the world as Anthony Eden’s misjudgement did.
Today is a reminder of why you never want to lose market confidence: once you have, you have to go far further than you otherwise would have done. This is why Hunt has had to junk, not just postpone, the 1p cut in the basic rate of income tax. The Tory party is offering the public the electorally unappealing combination of tax rises and spending cuts in a bid to appease the markets.
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