Will there be a revolt on the Tory right?

What is the point of Liz Truss’s government? Expect more MPs to ask that question today after Jeremy Hunt’s statement tearing up the not-so-mini Budget. The new chancellor has just announced in an address that he will be scrapping every tax cut in Truss and her then-chancellor Kwasi Kwarteng’s fiscal event bar the reversal of the national insurance hike and the cut to stamp duty. Both would have been particularly tricky to row back from given stamp duty has already happened and the NI hike has already been legislated for – with MPs voting last week. The energy support package has also been watered down.

In his message to the public – and the markets – Hunt pressed the need for economic stability. He suggested the income tax cut was off the table indefinitely – until the public finances allowed. Hunt said the package of changes would mean an extra £32 billion per year for the Treasury, but given the financial black hole more difficult decisions would be needed. To say this is humiliating for Truss would be an understatement. The Prime Minister has had to reverse ferret on her flagship economic programme. The only significant campaign pledge that has survived is the reversal of the national insurance hike. For all the talk from Truss and Kwarteng about taking on the Treasury orthodoxy, the orthodoxy is back and the Treasury hold more power over policy decisions than before Truss entered.

So, how will today’s screeching U-turn land with the different audiences? Hunt moved now to calm the markets – and the tentative early signs this morning on gilt yields suggests it is having at least some of the desired effect. But what about MPs? The calculation in the Truss camp is that it’s the left of the party that currently poses the greatest threat to her position. These MPs have the potential to rally around a candidate like Rishi Sunak. By bringing in Hunt and reversing many of these measures, Truss appears to have bought a little time with this wing of the party. One Nation Tory Damian Green – a close ally of Hunt – suggested on the airwaves this morning that Truss should be given time (even if he used the interview to also push for his own changes to supply side reform).

But what about a revolt on the right? Supporters of Truss believe the right of the party doesn’t have many places to go. Would they get behind a candidate like Suella Braverman? Would Boris Johnson really mount a comeback now? Yet this is the group of MPs who are likely to take greatest issue with today’s announcement. These MPs – many of whom are in cabinet – backed Truss on the promise of delivery and tax cuts. Several of them ran on their own platform promising tax cuts. They defended the growth plan only for the government to U-turn on it. These are the MPs to watch today. In that vein, red wall MP Ben Bradley, who backed Truss for leader, has just gone public to criticise the move: ;Well, that effectively renders all the political fallout, criticism, dive in the polls etc of the last few weeks entirely pointless doesn’t it… Right back where we started, just far less popular than before’.

Trussonomics is dead

When Jeremy Hunt took the role of chancellor last week, he was thought to have done it under instructions from Liz Truss that he was not to roll back any more of the mini-Budget. That instruction hasn’t stuck. Today’s update on the ‘medium-term fiscal statement’ was not so much a detailed plan to balance the books (that’s still to come on 31 October), but rather a reversal of almost all of the mini-Budget rolled out by Liz Truss and former chancellor Kwasi Kwarteng last month.

The plan to bring forward a 1p cut to the basic rate of income tax has been scrapped completely. It was thought that Hunt would return to the timeline Boris Johnson’s government had originally laid out, to come in from 2024. But the plans to cut have been suspended ‘indefinitely’ as Hunt insisted that while he agreed with the principle that taxpayers should keep more of what they earn, it was ‘not right to borrow to fund this tax cut.’

The VAT cut for foreign visitors is also in the bin, as are freezes to alcohol duty; and plans to change IR35 rules for employers and freelancers have also been U-turned. What remains of the original mini-Budget is now a very short list, albeit one of the most expensive tax cuts remains in place. The National Insurance levy designed for health and social care is still being phased out come November, which was estimated to bring in roughly £18 billion over the next three years. And Hunt has kept the uplift in stamp duty thresholds, which came into effect immediately after Kwarteng’s announcement last month.

But one of the biggest announcements today relates to plans announced almost two weeks before the mini-Budget: the energy price guarantee, which was billed as the largest support package in peacetime, estimated to cost between £80 billion and £150 billion for households alone. The current policy, which caps the unit price of energy for everyone (regardless of income or wealth) will stay in place until next April, but from there a Treasury-led review will update the policy to be more targeted, in a bid to stop ‘exposing public finances to unlimited volatility in international gas prices’, while still ‘ensuring enough support for those in need.’

Hunt suggested there are far more brutal decisions to come. ‘There will be more difficult decisions, I’m afraid, on tax and spend,’ he said. ‘All departments will need to redouble their efforts to find savings, and some areas of spending will need to be cut.’ This suggests that Truss and Kwarteng’s repeated promises to protect NHS and defence spending may even be up for review.

His main focus, he insisted, was to regain ‘stability’. The Treasury estimates that today’s announcements account for £32 billion worth of revenue. Hunt emphasised this in his update, which was clearly a direct message to markets: that the majority of the unfunded tax cuts are now reversed.

As expected, this new agenda has come at the expense of the old one. But the extent to which Trussonomics has been rolled back – especially the abolition of the basic rate tax cut – is both surprising and unprecedented. And there is plenty more to come.

It’s not easy to regain market trust

The government’s position has become so precarious – and its credibility with the markets so low – that even waiting another two weeks to announce the ‘medium term fiscal statement’ became too big a gamble. By moving the announcement forward to today, Jeremy Hunt is removing the uncertainty of creating a two-week gap between the end of the Bank of England’s intervention in the gilt market and the government’s announcements. And markets are tentatively responding well. Ten-year gilt yields started dropping considerably when the market opened at 8 a.m., from 4.3 per cent down to just under 4.1 per cent. You can follow along with hourly updates via The Spectator’s data tracker here.

But this good news does little to offset the ugly realities that are going to come to light when the Chancellor makes his announcements today. Hunt has been warning this weekend that further aspects of Liz Truss’s mini-Budget are going in the bin: that not all tax cuts will stay, and other taxes will need to rise further still. It has led to warnings over the weekend, including from Goldman Sachs, that this could spell a harder and more sustained recession for the UK economy – not least because the rise in corporation tax will deter investment and the growth agenda, as Fraser Nelson details here.

All this serves as a reminder about what’s really gone so badly wrong over the past few weeks. Markets are not political: their reaction to the mini-Budget was not about any kind of ideological belief against tax cuts or even favourable tax policies for the rich. That’s why the decision to reverse plans to abolish the 45p tax rate did nothing to calm their reaction – because it only accounted for £2 billion of the £45 billion tax-cutting package that created an even wider hole in the public finances.

This is what markets feared: a government that planned to heavily increase day-to-day spending (it could have been on anything – tax cuts, more giveaways), announced without any credible plans to account for the money. The combination of the energy price guarantee – set to cost at a minimum the amount of furlough, and on the higher end, upwards of £150 billion – and then tax cuts without an utterance about fiscal discipline is what lost the government credibility with markets. Not one policy or another – but an attitude that they could borrow all they liked with impunity.

That is what Hunt has to tackle today: that hubristic attitude that saw markets lose their confidence in the government’s ability to practice fiscal restraint. But it means he will have to go much further to make the sums add up than he perhaps would have needed to do before the chaos. There was a time, just weeks ago, when the government might have got away with a slight challenge to the Office for Budget Responsibility’s forecasts, able to convince markets that their plans would fill in some of the gaps. Indeed, several other independent forecasters assumed the tax cuts would add 0.5 per cent growth to the economy – certainly not nothing in terms of additional revenue.

But having cut the OBR out so explicitly in September and having lost any kind of goodwill with the markets, today’s statement is no longer about balance, but about appeasement. Expect today’s tax announcements and plans for spending cuts to be both blunt and far more rigorous than had ever been discussed on the leadership campaign trail.

That’s because they never had any real plans to trim spending in the short term, and now the government is having to do so overnight. It’s perhaps the worst way to come up with a spending policy, especially one billed as a ‘medium-term’ plan. But given the mistakes of the past few weeks, it is the only option left.

Did Putin use Iranian martyr drones on Kyiv?

As Iranian munitions have hurtled through the air at the front line in the Donbas, and as Iranian suicide drones have smashed into Ukrainian cities, Tehran has denied everything – unconvincingly. The most recent was Iran’s foreign minister, Hossein Amirabdollahian, who said on Saturday: ‘The Islamic Republic of Iran has not and will not provide any weapon to be used in the war in Ukraine’. With the piety beloved of hypocrites everywhere, he went on: ‘We believe that the arming of each side of the crisis will prolong the war’.

This is part of a pattern. For most of the last few weeks, Iran has officially denied that its weapons and drones have been sold to Russia for use in Ukraine – even though the use of signature Iranian weapons has been very obvious. The Shahed ‘martyr drones’ alone are unmistakable, and they have been filmed crashing, like V2 bombs, into residential targets across the country. They struck Kyiv again today. 

America’s intelligence agencies have also passed on to the newspapers stories of Iranian officials travelling to Moscow to co-ordinate deliveries as early as September. And now, American newspapers report, Iran is preparing to send more types of drones, and much more of its large arsenal of ballistic missiles.

Iran’s ballistic missile programme is significant and diverse. It manufactures its own missiles and sends its Islamic Revolutionary Guards Corps missile-builders as far afield as Lebanon and Yemen. Iran operates a region-wide network of proxies, all of whom want to field missiles and drones to fire at Saudi Arabia, Israel, and American bases – and which the regime is happy to provide them.

But war is expensive and whenever wars break out, armies quickly run out of material. It seems every major conflict is accompanied by a ‘shell crisis’, in which the pace at which artillery is fired – by every side – significantly outstrips even the most realistic of pre-war estimates. Countries that can most effectively gear their entire economies to manufacture arms and provide soldiers tend to do better in existential wars like this.

For Russia, this is a double-edged problem. This invasion was always a ‘special military operation’, meant to be over in a week. Now it’s an almost total war of a scale military planners had never anticipated. Ukraine has largely outsourced its procurement and manufacturing of arms to the West – and its allies make up the majority of global GDP. Although European and British warehouses are emptying faster than anticipated, America is still equipped to arm Ukraine for many years.

Russia’s own stockpiles of arms were meant to be enormous, but they have proven not to be. Poor maintenance and corruption meant that Russian munitions were badly kept or stolen and sold. Sanctions mean that Russia cannot buy weaponry on the open market, or manufacture complex armaments using western components.

Russia’s armed forces were said to be running short of precision munitions – guided missiles and bombs – even early in its invasion. Iran seems a good enough source of extra weaponry. At least the deal would work out for Russia.

But for Iran, there are complications. All of this could easily backfire on the regime. One Israeli minister, Nachman Shai, minister of diaspora affairs, has already broken ranks to say that Israel should drop its official neutrality and begin arming Ukraine in response to Iranian actions. His perspective is not very important; he is not a defence minister and Israel has a weird cultural affinity – backed up by arms deals – for Putin’s Russia which for many of its advocates is privately maddening and self-defeating.

But the Iranian government faces problems at home. Millions of young people are marching in the streets and defying the violent threats of the clerics at this very moment. Protest movements in both Russia and Iran often focus on the foreign wars fought by the state at the people’s expense. The Navalny movement in Russia managed to make some headway suggesting that Russia’s years-long campaign to support the regime of Bashar al-Assad in Syria was a waste of time and money. Russian people being largely unwilling to hear that supporting Assad is evil, it’s easier to say that doing so is expensive.

In Iran, smaller protest movements over the years have baulked at the cost of funding Assad, of keeping a perpetual proxy war against Israel going, and building an expensive and difficult nuclear programme in the teeth of hard sanctions. Let us not forget that a symbol of the regime – the notorious Evin prison – very publicly burned this week.

The Islamic Revolutionary Guard and clerical hold on power has never looked weaker. Joining a doomed enterprise like Russia’s invasion of Ukraine may be a way to make quick money, but it cannot stabilise Iran domestically or diplomatically.

If the United States and Ukraine’s allies decide to penalise those countries covertly arming Russia, more sanctions could be on the way. Iran’s regime is already weakening. Selling drones and missiles might gratify its leaders’ bloodlust and hatred of an American-led world, but it could also doom the regime.

Flashback: Truss promises ‘no new taxes’

Trussonomics is dead, long live Treasury orthodoxy. New Chancellor Jeremy Hunt unpicked the bulk of his next-door neighbour’s policy agenda on TV this morning, telling the nation that nearly all of the tax measures that have not started legislation would now be reversed.

Income tax will now remain at 20 per cent ‘indefinitely’, the free on alcohol rates has been scrapped with only the National Insurance and Stamp Duty breaks surviving. Hunt also confirmed that he will go ahead with Rishi Sunak’s planned corporation tax increase next April from 19 per cent to 25 per cent. 

It’s a dramatic break with Liz Truss’s promise in, er, August at the Tory husting that there would be ‘no new taxes.’ Truss of course was echoing the infamous words of George HW Bush who made the pledge in his 1988 presidential campaign but ended up having to increase them as part of his 1990 budget compromises.
Bush broke his word after less than two years; Truss broke hers after less than two months.

Joe Biden has jolted China

The chip war between China and America is heating up, with an increasingly assertive Joe Biden battling with Xi Jinping as he enters his third term as Chinese leader. The US last week further restricted China’s access to advanced American know-how, in what were some of the most stringent export controls for decades. Xi didn’t mention semiconductors in a speech on Sunday marking the opening of the Communist party’s twice-a-decade congress in Beijing, but he did pledge that China would ‘resolutely win the battle in key core technologies’. To compete with the US, China will need better tech. These new export controls will make Xi’s vision much harder to achieve.

Joe Biden has tightened restrictions on exports to China of high-performance chips critical for the development of supercomputers, surveillance systems and advanced weapon systems. It has also blocked the Chinese from buying foreign-made chips that use American tools and software. The US dominates the production of such tools, and now any firm using them will require a licence for exporting to China. It is one of the US’s most aggressive moves against China yet.

Chips are fundamental to advanced economies: crucial to the production of products ranging from smartphones to laptops, cars, aircraft and even cookers and refrigerators. The most advanced chips are needed for the development of artificial intelligence, with numerous military implications. As relations between the US and China have deteriorated, they have become a key battleground as the two vie for technological leadership.

The US is trying to block China’s access to anything that could boost its military power. China is a massive consumer of American chips, and is also pouring $100 billion into its domestic industry in a race to achieve self-sufficiency. It has claimed significant advances, though these are difficult to verify. However, it is generally accepted that China’s chip-making abilities are years behind those of America or Taiwan. Estimates vary, but at the high end the ‘chip-gap’ is reckoned to be more than a decade. Even then, China is chasing a fast-moving target. Beijing’s cyber-spies have been scrutinising America’s capabilities.

The US has targeted a jewel in the Chinese crown: a rapidly growing Wuhan company called Yangtze Memory Technologies Corp (YMTC), which is China’s largest producer of memory chips. It is seen by Xi as a national champion in his efforts to develop a domestic chip industry. US officials allege that the company works closely with the Chinese military and has violated earlier trade sanctions by supplying chips to Huawei, the Chinese telecoms company: another adversary the US has tried to handicap.

YMTC was reportedly stockpiling foreign equipment for months in anticipation of US restrictions. Washington has put the company on its ‘unverified list’, meaning it has not been able to check whether American technology is being diverted for military use. The list is seen as a stepping stone to yet more severe sanctions against the Chinese chipmaker. US chip equipment suppliers are also pulling their US staff out of Chinese facilities, including those of YMTC.

YMTC’s rise may be somewhat halted. The company has reportedly been courting high-profile clients, including Apple. The iPhone-maker recently confirmed it was considering using YMTC chips in some smartphones, triggering outrage from US lawmakers. This will almost certainly be derailed by the latest export controls.

There have been signs that China’s chip splurge is not going according to plan for a while. In the run-up to the CCP congress, an anti-corruption campaign targeted top officials in the industry, including the country’s information technology minister, amid fears that funds are being squandered or stolen. Taken with the American restrictions, this represents a severe setback to Xi’s pledge to dominate the key technologies of the future. No wonder, then, that he has described corruption as ‘the biggest cancer’.

Xi told the CCP on Sunday that China would eventually achieve ‘technology self-reliance’. It has no option. If Beijing is cut off from American chips, China’s ability to develop a whole swathe of advanced technologies will set it back several steps in the new cold war.

Will Jeremy Hunt’s U-turns deepen recession?

Just two weeks ago, Liz Truss told the Tory conference that her priority was ‘growth, growth and growth’. But how much of that can she expect now that her new Chancellor plans to jack up corporation tax from 19 per cent to 25 per cent as the economic headwinds strengthen? 

As she never tired of telling us during the leadership campaign, it’s an unusual thing to do at a time of threatened recession: no other G7 country plans to put up taxes in this way. Now that she has agreed to go along with the Sunak plan in the name of assuaging the markets, City forecasters are doing a double-take. Instead of that ‘growth, growth and growth’ we are set for recession – and one that they say will be deepened by the U-turns. Expect more of those this morning at Jeremy Hunt’s statement. Some verdicts:

Oxford Economics said on Friday: 

Another tax U-turn (following backtracking on abolishing the 45p rate) will add to financial pressure on individuals. The rise in corporation tax will be borne by investors through lower dividends, consumers via higher prices, and workers through lower wages. It will also increase the cost of capital for firms, a negative for business investment. The tax burden is now headed to a 70-year high, a questionable development for an economy facing recession.

Martin Beck, chief economic adviser at the EY ITEM Club (on Radio 4 earlier):

The U-turns mean that the tax burden will be higher than we were expecting. Raising taxes heading into a recession is not the economically orthodox thing to do. Typically, you’d expect fiscal policy to loosen in a recession: for the taxes to come down and public sending to rise. There is a risk that the government’s actions, the U-turns, make the recession a bit deeper than we were expecting.

Liz Truss’s absurd ‘growth, growth and growth’ theme, and Kwarteng’s absurd talk of 2.5 per cent annual growth, will ring in the ears of voters as they suffer the predicted long recession. The whole thing will be remembered as a deranged Tory joke. Truss and Kwarteng were quite right to aspire to growth, but to dangle it in front of a country on the way to recession was cruel and irresponsible. Those two should only ever have spoken about taking the edge off  a likely recession because that’s all that their limited tax cuts were likely to do.

The major forces shaping the UK economy are not homegrown. Every country in Europe is feeling the impact of high energy prices, high inflation, economic weakness in the US and eurozone and the global rise in interest rates. Yes, it was possible to overturn this with major stimulatory reforms. But shaving a penny off income tax was never going to change the narrative. It would have added 0.5 per cent to growth at best, never the 2.5 per cent figure spoken of.

So what can people expect now? There will be the best part of a year for the electorate to experience economic contraction – and, after that, several years to experience the higher prices and lower wages that are the results of corporation tax increases. Perhaps in his statement this morning, Mr Hunt can now explain to us why this is a price worth paying. Politics is always about trade-offs, and the Tories have some way to go before they level with the public about the trade-offs they are now making and the economic situation that we are really in.

Who would vote for the Conservatives now?

As the Labour party’s lead reaches 27 per cent or more, it would be easy to place the entirety of the blame on Liz Truss. That doesn’t mean it would be fair; the effort to alienate all but the most hardline tribal Conservative supporters has been a joint effort across 12 years and multiple prime ministers.

Markets hated the mini-Budget; cutting taxes while making massive spending pledges to subsidise energy demand during a critical shortage was not a winning formula. Apparently, blackouts are not looked on kindly; who could have guessed? Voters, meanwhile, hated it because it offered more to those who are better off. In particular, the 45p tax cut – while economically one of the least significant measures – alienated large chunks of the population who felt that it was unfair, particularly when combined with the scrapping of the bonus cap; the Conservative party was back to its old tricks, looking out for its rich mates.

Taken in isolation, it would be easy to say that this, and this alone, has driven the sudden nosedive in the polls. And at a proximate level, it has. Dig a little deeper, however, and the problems start to pile up. Who exactly is both voting for the Conservative party, and also upset at the idea that top income tax rates might be lowered? Why is economic growth over redistribution such a hard sell to its electorate?

One option would be to simply blame the public. Britain may not be a communist country, but it probably would be if you left it to the voters; we are, after all, talking about a country where 23 per cent of the population would nationalise travel agents if you let them. Trying to deliver growth-boosting deregulation alongside tax cuts in such an environment is a bit like smoking in a fireworks factory; at the very least, your colleagues are going to ask you politely to stop.

But generally speaking, blaming the electorate is a sign that you’ve got your politics wrong. Back in 2020, researchers at More in Common argued you could divide Britain into a set of political ‘tribes’. ‘Backbone Conservatives’ – think ‘patriotic Brexiteer, reads his newspaper in print’ – made up about 15 per cent of the population. The Conservatives are currently sitting at a little over 20 per cent in the polls; they’ve got their backbone support, and a smattering of others, and that’s about it.

Everyone else has been thoroughly alienated. Only 6 per cent of those aged 18-24 would vote for the Tories, a figure that doesn’t improve much among those aged 25-49. And why would they? The Conservatives have spent 12 years making it extremely clear that they don’t care about young people in the slightest; they’re the party of the economically inactive pensioner, for whom government exists to pump up asset prices and redistribute income from those unfortunate enough to be young enough to work. Between soaring house prices, soaring tuition fees, stagnant wages, and constant fiscal bungs to the elderly, the Conservatives can forget about anyone under 50 voting for them anytime soon.

Perhaps, then, they can turn to the professional classes, who benefit from these tax cuts? Well, no. The ABC1s of British society are now less likely to vote Conservative than the C2DEs. In plain English, Cameron’s referendum drove a wedge between the party and its base, which the pro-European parties were all too happy to benefit from. 

What the Conservatives now have is the hangover of Boris Johnson’s successful realignment of British politics, which came at a substantial – though less discussed – cost: when your voting base, in economic terms, becomes more traditionally Labour, they’re not going to like it when you do traditionally Conservative things. And when your parliamentary party, shaped by Cameron and his successors, is as socially liberal as the average Labour voter, they won’t let you offer the socially conservative red meat that might have kept your old electorate onside.

Now Liz Truss has managed to alienate this new base, without bringing the old one back. That she was voted in by the members to do this is part of the problem; the membership doesn’t reflect the voters and neither do the socially-left-economically-right MPs. So where do the Conservatives go from here? Well, to opposition, of course.

Can you feel sorry for Liz Truss?

It is not easy to feel sorry for Liz Truss. She has a deeply unattractive streak of vanity – when in the Foreign Office, she seemed more interested in posing for the official photographers who trailed her round than she did in building relationships with the places she visited. She campaigned hard and sometimes dirty to obtain a job for which she was manifestly out of her depth.

Once in that job, she exercised power with peremptory arrogance. She rewarded people who had sucked up to her, cast out anyone who had spoken up for her rival, and allowed experienced civil servants to be hoofed ruthlessly out of their jobs. So confident was she that she knew best that she didn’t bother to seek the support of cabinet for her most radical proposals, and she rejected the advice of the OBR before it had even been given. She cannot claim to have been badly advised because she made sure that she was not advised at all. When the whole jerry-built rocket of her premiership exploded on the launch pad, she had nobody to blame but herself.

And yet, I think the human way into the story is this one. It is that her mini-Budget – and I use the possessive advisedly, because not a soul who pretends to have any insight into the matter thinks Kwasi Kwarteng was anything other than an enthusiastic junior partner in the project – was the folly of somebody deranged by unrequited love. Here was a new prime minister who loved, as the saying has it, not wisely but too well. Liz Truss was not in love with a person, but with an idea. She was in love with ‘the market’ – that belle dame sans merci of the Tory right. Her previous positions – republican, Liberal Democrat, Remainer – had been discarded like old crushes. Inexplicable what she ever saw in them. This, though: this wasn’t going to be like the last time, or the time before that. This was The One.

Don’t think of her as prime minister, with all the pomp and apparent assurance of her office. Think instead of ‘Liz’, the ambitious, clever teenager hiding in those power suits. Liz is an awkward girl who doesn’t make friends easily. She has a shy, detached manner. She misreads social signals. She sometimes seems cold or standoffish, then smiles awkwardly or expresses warmth and enthusiasm like someone who has read instructions on how to do so in a book. But inside, her emotions are in turmoil. On the bedroom wall where she lives inside her head are hand-knit samplers with quotations from Hayek and Adam Smith, Athena posters of Laffer curves smeared with lipstick kisses. She lies there sockless on top of her duvet, for hours at a time, kicking her legs and daydreaming hotly about ‘animal spirits’.

The fatal attraction of Liz’s idea of the market was its perfect simplicity. Small state good, big state bad. Tax cuts good, public spending bad. Freedom wasn’t a complicated concept of the kind Isaiah Berlin might write a book about but, rather, a simple and noble good which made your heart soar to even think of. The principles were so attractive, so gleamingly clear-cut, that you wouldn’t have to bother yourself with the mystifying contingencies of behavioural economics, or even the need to do any sums. Exchange rates, interest rates, gilt yields, inputs and outputs – all those tedious details were secondary. They were window-dressing. If you were only bold, and cut the wealth creators free, the magic of the market would make everything all right. And then, only then, would the market love her as she loved it, and the adoring eyes of the public affirm their union. This was a vision of economics no more realistic than a pull-out poster in a faded issue of Just 17.

When we’re in love, we don’t think rationally. Love is projection. We are not – during that initial period of what psychologists call ‘limerence’ – attracted to the person we adore, but to an idea of them that we have constructed in our own heads. As the trajectory of marriages contracted in haste tend to show, we love them so intensely because we don’t really know them. Their insistence on putting wooden-handled knives into the dishwasher, leaving the door open when they go to the loo, or humming tunelessly on long-distance car journeys, only start to impinge on our consciousness when we come to see them as they really are.

Much of that sort of infatuated love is almost indistinguishable from wounded narcissism: the desperate need to have our insecurities assuaged. We imagine that, if only they can be persuaded to love us back, the beloved will solve all our problems. We yearn not to know the beloved fully, but for the beloved to know and understand us as nobody else does. We ask them to validate our most cherished ideas of ourselves. And that, of course, sets us up for disappointment.

We abase ourselves before the beloved, and the beloved grows inexplicably crueller. As Yeats warned:

Never give all the heart, for loveWill scarcely seem worth thinking ofTo passionate women if it seemCertain, and they never dreamThat it fades out from kiss to kiss.

This is what happened to Liz. Her pash on the market was unrequited. It did not love her back. The market took from her everything she had to give – the bonus cap, the tax breaks – and then it said, roughly: ‘Seeya, loser.’ And it did so, like a cruel bad boy in a teen movie, in front of everybody.

The market didn’t love her back, because it doesn’t love anyone back. It is an impersonal, collective, often marvellous but entirely unsentimental system for exploiting opportunity and allocating resources. You might as well fall in love with a thunderstorm or a man-eating tiger. And here she is, now, broken-hearted and alone, having pushed away the friends who tried in vain to warn her off her unsuitable infatuation. She tries to front it out, to find scapegoats, to insist, against all the evidence, that she had the right basic idea and it was just the execution that was wrong. Back in the bedroom in her head, she’s singing brokenly along to Liza Minelli: ‘Maybe this time…’

On a psychological level, I think that’s how to understand the story. And it is indeed a matter for sympathy. It’s a reminder of how too human and silly, like us, people in the highest office can be. But it’s certainly not a reason to keep this too human, silly creature in power for a moment longer.

More mini-Budget U-turns coming today

In a sign of how nervous the government still is about the state of the gilts market, the Treasury has just made a pre-market announcement that Jeremy Hunt will bring forward further measures from the ‘Medium Term Fiscal Plan’ today – in other words, more measures from the mini-Budget will be abandoned. 

The Treasury says Hunt has briefed Andrew Bailey, the Governor of the Bank of England, and the Debt Management Office on these plans. We will get details on these measures when Hunt makes a statement to the Commons later today. 

Presumably this is what Hunt and Liz Truss agreed at Chequers when they met on Sunday. The fact that Hunt is making this statement is another illustration of the power he now holds in government, he is Truss’s gaoler. It also reveals that the new Chancellor was nervous about how the market would react today and so has felt the need to bring forward more U-turns in an attempt to reassure them.

There are now reports that the energy price cap will only remain universal until April. After that, it will become more targeted— which will reduce the cost of the package.

In defence of Shakespeare’s Globe

Off to my old manor, the Globe theatre, to join a celebratory gathering of thems and theys for I, Joan, a non-binary telling of the Joan of Arc story. The show has caused no shortage of outrage in various communities on the left, centre and right, and has had the Globe labelled as misogynist by feminists of a certain generation. It is a great compliment to the Globe that even though it only opened in 1997, it is already held so dear that whatever happens there is quickly amplified into a broader debate. In my time as artistic director, we had one Sun front page ridiculing our engagement with foreigners; then later a concerted pile-on from left and right when we had the temerity to invite both Israelis and Palestinians to an international festival.

All these scandals are testament to the Globe’s freedom of manoeuvre. The Globe took zero cash from the taxpayer in its first 20 years, and had no reliance on sponsors for core funding. Until a recent government bailout its sole source of income was the box office, which meant few or no rules. I once welcomed Tony Benn to the stage after a play about the early days of trade unionism, and he encouraged the audience to march on parliament. On another occasion, we live-streamed a Belarussian production of King Lear into Belarus, which was followed by many a speech about the evils of Lukashenko. And as for the Alternative Miss World competition – that made I, Joan look like Terence Rattigan. My board of trustees didn’t bat an eye, provided we were still making the pennies.

The storm swirling around I, Joan has been brutal, exacerbated by the cowardly indignation of social media. Once I realised it is only necessary to say the words ‘J.K. Rowling’ in the company of different generations to guarantee that voices will be raised, I decided the best tactic on this topic was to shut up and listen. If I, Joan erred towards the presumption that everyone is onside without testing its own thinking, then the makers could quite justifiably say that others have had two and a half millennia of the same presumption. But the sun was out, the dancing was fun, a story was told, and long may the Globe go on stirring the pot.

I have been to several first nights recently. It is amazing how whatever the occasion, whether a super-swanky West End ta-daa, a hyper-hipster private showing in a Hoxton gallery or a small room above a pub, all generate the same hysteria backstage. We always used to tell each other that the amount of adrenaline in the body at a press night was equivalent to a car crash, and nod sagely, awed at our own endurance, secretly knowing we were talking rubbish. It is an excitement usually doused by liberal quantities of booze. Two recent occasions have involved events put together by my ridiculously enterprising daughters. My new year’s resolution will be to read better the look that says ‘Time for the old ones to go home now’, and learn not to outstay my welcome.

All actors have a hard time emerging from a soap. It is hard to shake off the public’s perception that you are just that character. Few had a harder time than Anne Reid, an early star of Coronation Street, who had a career lull of almost 20 years afterwards, before theatre, and then film, and then television rediscovered her particular genius. We’re working together on a project for next spring. She told me recently that after spending decades erasing the cloud of Corrie, she was less than happy on receiving her OBE when our late and much-lamented Queen leant forwards and asked her: ‘How is life on the Street?’ Happily, the look on her face afterwards is captured on film, and it is not one of reverence for the monarchy.

Tea with Simon Callow, who told me an even better investiture story. He was running late after two cars had broken down, and rushed in in a flurry of clothes-changing and panic. Though he had missed his slot, he was added to the end of the queue, and calmed by a smooth equerry, who told him: ‘In normal circumstances, I would simply say ‘“Just do what the person in front of you does”, but no longer.’ ‘Why not?’ asked Simon. ‘At the last event I said that to a rather elderly admiral. Unfortunately just before him a Gurkha was being given an award, and it is their habit in the presence of Her Majesty to prostrate themselves entirely on the floor with arms spread out. It took us rather a while to get the admiral back up.’

Roger Scruton’s philosophy of wine

The philosopher Roger Scruton died in January 2020 just a few weeks shy of his 76th birthday. He left behind a large circle of admirers and a correspondingly large shelf of books in a variety of genres – novels, opera libretti, volumes of occasional journalism, cultural and architectural criticism, and various philosophical works, popular as well as technical. He wrote and wrote about music, hunting to hounds and politics. He also wrote about the subject that brings us together: wine.

Roger was a gifted teacher, always on the lookout for opportunities to educate the ignorant, enlighten the benighted and expand the horizons of those cramped by bigotry and parti pris. His missionary work extended to the pages of the New Statesman, in whose pages his wine columns appeared. That magazine later repaid his patronage very poorly, but that is a subject for another day and, besides, it was after he compiled a selection of his columns in a book with the splendid title I Drink Therefore I Am (2010). The back cover of my edition informs the curious that the book is ‘a good-humoured antidote to the pretentious clap-trap that is written about wine today and a profound apology for the drink on which civilisation was founded’. Indeed it is.

Roger was an eloquent apologist for the pleasures of wine, indeed for pleasure period. Like Walter Bagehot before him, Roger, a high Tory himself, understood that ‘the essence of Toryism is enjoyment’. True pleasure, pleasure rightly understood (as Tocqueville might have put it) is at bottom a conservative prerogative. It is also an ancient one, as the author of Genesis acknowledged when he observed that ‘God made the world and saw that it was good’. It is (to use a locution dear to our Marxist friends) no accident that Jesus’s first recorded miracle was the transformation of the base liquid water into the precious liquid wine – and good stuff, too, by all accounts.

Wine, of course, enjoys a distinguished philosophical as well as a distinguished theological pedigree. In the Symposium, Plato enacts his inquiry into the true nature of love, beauty and immortality on a stage set by the drinking of wine: ‘symposium’ meaning ‘drinking party’, something you can easily forget if you spend too much time on a contemporary college campus.

I Drink Therefore I Am occupies an eminent place in this tradition of elevated speculation. The title, of course, recalls Descartes’ famous exercise in epistemological hubris. I feel certain that had Descartes argued Bibo, ergo sum instead of Cogito, ergo sum, he would have had many more disciples today. Whatever can be said for the ontological argument for the existence of God, Roger showed that the oenological argument has the advantage of instant intuitive conviction. To alter A.E. Housman’s effort at theodicy, let us say that ‘Wine does more than Milton can to justify God’s ways to man’.

Roger’s title also recalls another famous chapter in contemporary thought, namely Monty Python and their bracing philosophers’ drinking song. If you do not know it, please look it up. It may be on the test. Like most serious books, I Drink Therefore I Am is a tribute to the importance of appearances – what shallow people disparage as the surfaces of thing. As Oscar Wilde once put it, only very shallow people do not judge things by their appearances. Roger was not a shallow person. Ergo, etc., etc.

He described the book as ‘a tribute to pleasure, by a devotee of happiness’. It is addressed to everyone – ‘theists and atheists, to Christians, Jews, Hindus and Muslims’ – in short ‘to every thinking person in whom the joy of meditation has not extinguished the pleasures of embodiment’.

Not everyone celebrates the fruit of the vine, and Roger has some condign animadversions about ‘health fanatics, about mad mullahs and about anybody else who prefers taking offence to seeing another’s viewpoint’.

This cheering book contains much wisdom and some sage advice. In his dubious pamphlet On Liberty, John Stuart Mill announced ‘one very simple principle’ that, he promised, would encourage beneficent eccentricity, hone everyone’s critical faculties and nurture pleasing ‘experiments in living’. What he in fact managed was to raise querulousness to the status of a categorical imperative and to undermine the rich amplitude of custom, habit and tradition.

The principles Roger Scruton offers us are much more benign. The first is that ‘you should drink what you like, in the quantities you like’. Another principle is no less salubrious: ‘Drinks which have a depressive effect – water, for example – should be taken in small doses, for medicinal reasons only.’ To which I will only add: salut!

This article was originally published in The Spectator’s World edition.

How long can Liz Truss hold on?

How much trouble is Liz Truss in? Just six weeks into her premiership, the Prime Minister’s economic plans are in tatters after she axed her chancellor Kwasi Kwarteng, reversed on her campaign pledge to scrap the scheduled corporation tax hike and brought in Jeremy Hunt as his successor. Now Hunt is calling the shots on the economy and he plans to reverse much of what the Truss government have announced so far, with tax rises and public spending cuts to come. Truss’s own supporters are privately asking what the point of her government is now.

Unsurprisingly, this has all led to talk among Tory MPs that the end is nigh. One Tory MP, Crispin Blunt, has come out publicly to call for Truss to go. The mood in the party soured last week after Truss’s difficult 1922 committee appearance and her painful press conference on Friday where she refused to offer an apology or engage with questions on why Kwarteng had been sacked. The papers are filled with apocalyptic source quotes predicting Truss’s imminent demise, while various potential successors are being talked up: from Ben Wallace as a great unifier to Rishi Sunak as the best placed candidate to calm the markets.

So, how realistic is the idea that Truss could be forced out within days or weeks? ‘It seems over,’ says a former minister. ‘Nothing can be worse than this.’ Other MPs say they believe a lot of letters of no confidence have already gone in and think there could be an attempt to oust her within a fortnight. Technically Truss is safe for a year – but a high number of letters could lead the 1922 committee to consider changing the rules.

What helps Truss is that there is no common consensus on who would be best placed to take over. In the past, MPs have held off on regicide by fearing the successor. ‘Changing leader is unrealistic,’ says a minister. It’s also the case that Downing Street plan to dig in. Jeremy Hunt’s appointment as Chancellor is intended to ease the concerns of MPs on the left of the party, thereby shoring up Truss’s position.

There are also plenty of Tory MPs who are very unhappy with the leadership and believe it could be terminal who still say it’s too early to move. Instead, they argue Truss is in last chance saloon. Rob Halfon has said Truss still has an opportunity to change tack and survive if she moves fast. Matt Hancock has suggested the answer is a reshuffle bringing in all the talent (no word on whether that includes the former health secretary). Meanwhile, on the right of the party, Christopher Chope has expressed his dissatisfaction that Truss U-turned on tax cuts – but said he still backs her: ‘I’m more confident that if we gave the Prime Minister our support, then she’d be back on track’.

In the case of both Theresa May and Boris Johnson, MPs took their time between the leader’s loss of authority and pushing them out. The danger for Truss is that a combination of bad polling, economic uncertainty and a lack of parliamentary support means that MPs conclude the situation is unsustainable and act now, worrying about what comes next after.

Jeremy Hunt is the ‘unity’ leader the Tories need

Liz Truss is now prime minister in name only: Jeremy Hunt, her chancellor of the exchequer, now holds power. He has repudiated her tax-cutting mini-Budget in a round of media appearances – his performances being far more convincing than Truss’s graceless eight-minute press conference on Friday. His admission that spending cuts will be needed and that ‘some taxes are going to go up’ to balance the books has injected a much-needed dose of realism.

The question on everyone’s lips is: what will Hunt do now? Is he a stalking horse for a new PM (Rishi Sunak being the obvious candidate) or is the former head boy at Charterhouse himself a prime minister-in-waiting?

Let’s look at the options. Even a deeply divided Tory party should be able to see that the Truss project – whether you liked or hated it – is now dead in the water. But they need to pull together around something. Can Tory MPs bury their differences and rally around a unity candidate? The job would be to see the country through the market squalls into a general election, possibly as early as next year.

Hunt is an obvious choice, given that he has already started the repair work. He is now working on a medium-term financial strategy at the Treasury and operating in tandem with Andrew Bailey, Governor of the Bank of England, to make the numbers add up to the satisfaction of a newly-empowered Office of Budget Responsibility.

Each of these institutions – the Bank, the Treasury and the OBR – were treated with disdain by Truss and Kwarteng. Indeed, the disagreement between Bailey and Kwarteng over who was responsible for ructions in the bond market and the knock-on impact on pension funds may well have settled the latter’s fate.

The Bank was sensitive to Tory criticism that it had been too timid in raising interest rates – it blamed the abrupt increase in gilt yields on the government’s mini-Budget. But Kwarteng and Truss (aided and abetted by Jacob Rees-Mogg) disagreed. The row did a fair bit to undermine investor confidence in the stewardship of the UK economy.

Jeremy Hunt is the proverbial safe pair of hands. He ran as the self-styled ‘sensible candidate’ in the 2019 leadership race to succeed Theresa May but his Remain credentials did for him in the end – and he lost decisively to Boris Johnson. Now he is both in office and in power. He wouldn’t ever have agreed to take on the chancellorship (the most thankless job in government) without extracting terms. He will have insisted on picking his own team, and on being given a free hand to reverse the brief, ill-fated Truss-Kwarteng trickle-down economics experiment.

The cabinet ousted Boris Johnson, but don’t expect the cabinet to depose Liz Truss, who picked her ministers based on fealty to her rather than competence. So everything comes down to the parliamentary party. Crispin Blunt has today become the first backbencher to call for her to go but there have so far been no others. The 1922 committee no longer enjoys its fearsome reputation, irrespective of what you may make of Sir Graham Brady (who is returning from holiday in Greece this weekend).

MPs will be moved by two factors: the financial markets (which are pushing up the cost of borrowing) and the polls which currently show a 27-point Labour party lead.

Sir Roger Gale, the perennial Tory party rebel in recent years, told LBC that a period of calm under Truss-Hunt leadership may save her – at least in the short term. This may well be wishful thinking.

Hunt is a man who cares about the national interest, but he is not lacking in ambition. Sunak has been proved right about ‘fairy tale economics’ but having moved against Johnson, he may worry about wielding the knife again – or standing and losing again. This offers an opening to Hunt (assuming there is no deal between the two men).

During the 2019 leadership election campaign, I had breakfast with Hunt (then foreign secretary) at the Corinthia hotel. He arrived with a Union Jack badge in his left lapel and not a hair out of place. At the time, sensing he was losing to Johnson, Hunt told me that ‘being boring and technocratic does not work’.

Well, boring does it for me. And, I suspect, for much of the rest of the country. So hold on Sir Keir Starmer: Jeremy Hunt’s time might just have come.

Watch: first Tory MP calls for Truss to go

In office, Liz Truss promised to be the ‘disruptor in chief’. Unfortunately, most of that disruption has proved to be in the markets and the polls as her short-lived revolution tanked the standing of both her currency and her party. With Labour and mortgage rates on the rise, Truss’s authority has disappeared within days. She’s been forced to ditch her ideological soulmate Kwasi Kwarteng for Jeremy Hunt, the embodiment of Tory orthodoxy, and is now very much a prisoner of her party as they try to find someone – anyone – who can dig them out of their self-inflicted mess.

Most of these discussions are happening behind closed doors as MPs weigh up their various options: a coronation or a contest? Ben or Boris? A fresh face or old? But this afternoon one Tory MP has at last opted to break cover and call for Liz Truss’s resignation: Crispin Blunt, the onetime prisons minister last seen attempting to defend disgraced jailbird Imran Ahmad Khan. Blunt by name, and by nature, the Reigate MP chose the comforts of the Andrew Neil Show to declare that ‘The game is up’ for Truss, adding that if his colleagues agree ‘that we have to have a change, then it will be effected’ though ‘exactly how it’s done and exactly under what mechanism’ is not yet clear.

How many of Blunt’s colleagues will follow suit? Mr S will be keeping track on Coffee House so watch this space…

Sunday shows round-up: Is Truss a ‘libertarian jihadist’?

Jeremy Hunt – ‘The Prime Minister is in charge’

To say things do not look rosy for Liz Truss would be quite the understatement. With the government now on its second Chancellor in as many months, and its once flagship policies being hastily swept under the carpet, the Conservative party appears to be in damage limitation mode. Laura Kuenssberg spoke to the new Chancellor this morning, in a pre-recorded interview, asking him if Truss was now such a damaged figure that he was the one really calling the shots:

‘There is a very difficult job to be done right now’

Hunt told Kuenssberg that he would be looking at all government departments’ ‘efficiencies’ and refused to rule out ditching more measures from September’s mini-Budget. He added that ‘some taxes will go up’ to help smooth over the recent economic turbulence:

Robert Halfon – The government has looked like ‘libertarian jihadists’

Sophy Ridge spoke to the chair of the Commons Education Committee, Robert Halfon. Halfon argued that the government had lost public faith because it was straying too far from compassionate conservatism:

No. 10 remarks about Javid ‘disgusting’

Ridge also bought up remarks reportedly made by the Prime Minister about the former Chancellor Sajid Javid:

Matt Hancock – Truss should reshuffle her cabinet

The former Health Secretary Matt Hancock made up one member of Laura Kuenssberg’s political panel. She asked him what he thought the Prime Minister’s next steps should be:

BioNTech team – ‘Changing cancer patients’ lives is in our grasp’

And finally, Kuenssberg spoke to Uğur Şahin and Özlem Türeci, the co-founders of BioNTech, the company made famous by the Covid vaccine which they developed alongside Pfizer. The pair spoke about a potential breakthrough in using vaccinations to fight against cancer:

Hunt on Truss: ‘She’s willing to change’

Liz Truss’s gaoler has just done another BBC interview. Jeremy Hunt continued to try and give himself maximum room for manoeuvre, saying ‘I’m not taking anything off the table’. He repeated his message:

We are going to have to take some very difficult decisions both on spending and on tax. Spending is not going to increase by as much as people hoped, and indeed we’re going to have to ask all government departments to find more efficiencies than they’d planned. And taxes are not going to go down as quickly as people thought, and some taxes are going to go up.

It will be fascinating to see if Truss is as direct on this when she is asked the question at PMQs next week.

Hunt also pledged that the Halloween fiscal statement would be ‘a bit like a Budget’ and that the government would ‘properly account for every penny.’ On the OBR’s assessments, he said ‘we’ve been honest that it was a mistake not to do that in the mini-Budget before.’

The abacus is back. He set the government the test of minimising the rise in interest rates: remember the Bank of England monetary policy committee meets on 3 November to set interest rates. The market still expects big rate rises, from 2.25 per cent now to 4.25 per cent by Christmas.

On Truss, Hunt insisted ‘she’s listened, she’s changed’. He maintained that she was still in charge, but that the government’s mission had been delayed, not stopped:

She has changed the way we’re going to get there. She hasn’t changed the destination, which is to get the country growing. I think she’s right to recognise, in the international situation and the market situation, that change was necessary. But change absolutely determined to deliver that economic growth that’s going to bring more prosperity to ordinary families up and down the country.

When asked about his own prospects, Hunt said he wanted to show that he was an ‘honest Chancellor’. He also said of his own leadership ambitions:

I think having run two leadership campaigns and having, by the way, failed in both of them, the desire to be leader has been clinically excised from me.

Seal of approval: Over in Washington this weekend, Bank of England Governor Andrew Bailey said of Hunt that there had been an ‘immediate meeting of minds on the importance of stability and sustainability.’ But, in what will be seen as a hint of more interest rate pain to come, Bailey suggested a ‘stronger response’ might be needed to combat inflation. Reuters has more.

Does Joe Biden know what ‘super-wealthy’ Americans pay in tax?

Joe Biden, ice cream in hand as so often, yesterday pronounced on Liz Truss’s tax reform disaster. 

‘I wasn’t the only one that thought it was a mistake,’ said Joe Biden, sounding every bit the wise old man of global politics. ‘I think that the idea of cutting taxes on the super-wealthy at a time when… I disagree with the policy, but that’s up to Great Britain.’

That concession at the end is the President realising he’s just breached the normal rules of diplomacy – by giving his opinion on an ally’s domestic difficulties. But he just can’t help himself.

Steerpike wonders, however, if Biden – no pauper himself after cashing in on his status after the Obama years – can recall what the highest rate of income tax in the United States is. 

Because Liz Truss’s proposal, if it had been allowed, would still have left Britain a considerably less accommodating fiscal destination for the super wealthy than America currently is. 

Let’s explain it, nice and clear for dear old Joe. Liz Truss had proposed reducing the highest rate of income tax – on people earning £150,000 or more per year – from 45 per cent to 40 per cent. In the US, at the federal level, the highest rate of income tax comes in at 37 per cent for those earning $523,600 (about £470,000 at current exchange rates). Someone earning the equivalent £150,000 in America would only narrowly creep into the third highest federal tax bracket of 32 per cent. If they managed to shed $4k from their income liability, they would pay just 24 per cent.  

Yes, Americans face more state-level and property taxes – but only three states have a personal income tax rate above 10 per cent. Most states charge far less. Someone earning $550,000 a year in Wyoming, for instance, would pay about 33 per cent in tax. 

So – not only are there many more ‘super wealthy’ Americans – they pay considerably less as a percentage of their income in tax than their well-off British peers. It’s not very fashionable to say so, but Steerpike can’t help wondering if those two points are connected. 

Biden has probably forgotten, but he has proposed increasing the top rate of marginal tax in the US – for those earning over $530k, remember – to 39 per cent. That would still leave the US federal rate below where Liz Truss was proposing it should be for the UK. 

Perhaps he should reflect less on Britain’s fiscal rates and more on the failure of his absurdly named Inflation Reduction Act and the threat facing his party in the upcoming mid-terms – as less fortunate Americans struggle to cope with the cost of living. 

Who voted for Jeremy Hunt to run Britain?

Jeremy Hunt has no mandate to lead Britain. He couldn’t muster sufficient Tory MPs behind him to properly enter the last leadership contest. He was beaten overwhelmingly in the one before that. 

He was a key part of the failed Theresa May administration that lost a parliamentary majority at a general election. He played no role in the Boris Johnson administration that won it back with plenty to spare (a victory from which the Conservative mandate to govern still flows).

Yet in a round of interviews this weekend, the new Chancellor of the Exchequer simply ripped up the economic agenda of Liz Truss. He mocked and then buried the PM’s vision of dynamic unfunded tax cuts. He pulled the rug from under her Commons pledge that the Government will not cut public expenditure. And Hunt made clear that he, rather than she, will decide on such matters as whether to stick with a promised reduction in the basic rate of income tax.

He was only in post because of mistakes that had been made, he added. All he would say in defence of his nominal boss was that she had won the Tory leadership contest ‘fair and square’ and therefore could not respectably be removed from 10 Downing Street absent a general election. Yet he did not even bother to pretend that the economic strategy he intends to impose requires her consent, let alone her active support.

Perhaps the calculation is that, given sufficient humiliation, even such an extreme case study of the Dunning-Kruger effect as Liz Truss has turned out to be, will realise that her reputation is being further depleted rather than enhanced by every extra day she chooses to cling on.

It is facile to complain that Truss is an altogether blameless victim of a shadowy financial establishment which holds illegitimate primacy over democratic outcomes. For a start, her own mandates are narrow and fragile: from her constituents in 2019 to be the MP for South West Norfolk and from 58 per cent of the Tory grassroots electorate to be their party leader. It has never been the popular will that she should be prime minister: that post depends on the consent of her parliamentary colleagues.

More pertinently still, private citizens and private concerns are not under any compulsion to lend their money to a government; and if they decide an administration is not a good bet they will naturally charge more to do so. If the administration in question cannot afford the bills then it must borrow and spend less or tax more. If it has promised not to do so then its authority will be shattered. These are basic laws of political gravity. Regimes which seek to defy them always come a cropper. No conspiracy required. So one should not weep for Truss. 

But a few tears for the overall standing of British democracy would certainly be in order.

The takeover of the levers of power by Hunt, who supported the defeated Rishi Sunak in the latter stages of the recent leadership race, certainly has echoes of the old Tory ‘magic circle’ method of selecting a head honcho. He may not have the air of the grouse moor about him, as was said about Alec Douglas-Home, but the patina of the standard issue Home Counties Cameronian centrist is unmistakable. 

On Friday, Nigel Farage claimed to have it on good authority that Hunt was returning from a mysterious trip to Brussels when he was confirmed as the new chancellor and mischievously asked in a tweet: ‘Had he taken any instructions?’

Lately, comparisons between UK politics and its traditionally chaotic Italian counterpart have been all the rage. We have clearly entered an era of Tuscan turnover in the Palace of Westminster. Or maybe that should be Sicilian snakes and Lazio ladders.

In which case it is hard not to see Hunt as our version of the former European Central Bank boss Mario Draghi, who was called in by Italy’s president to form a technocratic government after the collapse of a previous regime.

He’s on his way out now – getting replaced by a populist right-winger after the Italian electorate were allowed a say on the future direction of their country via a general election.

It is getting harder and harder to dispute that a fresh popular mandate to determine who should govern is needed here as well, less than three years after we last went to the polls. Brenda from Bristol will not be pleased, but another early general election is starting to feel inevitable.

Ben Wallace: If defence spending pledge goes, so do I

In politics, where there’s death, there’s life. And as Liz Truss’s premiership crumbles before our eyes, all attention in SW1 is which lucky legislator gets to replace her. Second time Sunak? The people’s Penny? Back again Boris? Or perhaps the man who many wanted to run this summer but ended up dropping out: Ben Wallace, the popular Defence Secretary. 

The former Scots Guards officer has been a long-standing fixture at the top of the ConservativeHome Cabinet rankings but opted to back Liz Truss in July rather than run himself. Instead, he extracted a pledge from the Trussette to raise defence spending to 3 per cent of GDP by 2030 – a pledge that appears to be in danger after Jeremy Hunt’s media round this morning.

Now, with Truss’s unhappy interregnum drawing towards its close, could the Flasheart of the Forces mount a bid himself? For the Mail on Sunday – the voice of Middle England – reports that friends of Wallace are saying he is ‘rethinking’ his objections to running for leader. One chatty chum of Wallace tells the paper:

Ben is concerned that the economic problems mean that the Prime Minister could U-turn over her pledge to increase defence spending to 3 per cent of GDP by 2030. He is very concerned that we could be on the brink of a global war, and wants to make sure that we are well-protected as a country.

The ally pitches Wallace as that rarity in British politics: a unity candidate who can bring the hopelessly divided Tories together in a way others can’t. Mr S is a fan of Wallace’s talents, but can’t help but wonder what has shifted so suddenly in his fortunes now. Is the Defence Secretary actually making a run? Or is it more about maneuvering to keep that 3 per cent commitment alive and well?