UK Fiscal Policy : The Prime Minister is at her wits’ end

What was supposed to ensure growth became the British government’s declaration of bankruptcy: after the announced tax plans failed, Great Britain now actually needs new elections.

Britain’s new Treasury Secretary Jeremy Hunt today rolled back what was left of the Prime Minister’s plans. With great fanfare, Liz Truss had announced several tax cuts – without securing the financing. She just tried it once without listening to economists and politicians.

Now she is left humiliated. This is a spectacular example of trial and error: let’s try it.

Chaotic picture of the Conservatives

But what was supposed to be an impetus for growth ended up declaring bankruptcy for that government. Worse still, the Conservatives, who have always insisted that they are the party of entrepreneurs, of sound fiscal policy, now have to admit that they painted a chaotic picture.

Just a few days ago at the Conservative Party Convention, Truss called out to enthusiastic party members that she only knew three goals: growth, growth, growth. She railed against environmental activists, the supposedly leftist journalists and Labour, they all belonged to the anti-growth coalition, the anti-growth coalition. This silly image of the enemy now falls on her feet. Now that all tax cut plans have been rolled back, is Truss now part of the anti-growth coalition?

Who is actually ruling?

The markets appear to be stabilizing somewhat. This is good news for a country whose people are reeling from raging inflation, high energy prices, an overwhelmed healthcare system and social divisions. They all deserve better government.

But who is actually ruling? Hunt announced the about-face today. He is so experienced and clever that one or two of his faction are already asking whether Hunt is the new prime minister. Truss did not face the debate in the House of Commons today. She sent a deputy. The Prime Minister is finished. It is no longer a question of if, but of when.

However, the Conservatives still have to negotiate what should happen now, how the transition can be shaped. If the Conservatives change the prime minister again, it will start to get silly. How many times can the Torries actually do this without asking the people? Keyword trial and error policy? Great Britain actually needs new elections. Anything else would be unacceptable to the voter.