Liz Truss’ first few weeks as British Prime Minister have been defined by crisis. She had only been in the job for 48 hours when news broke that Queen Elizabeth II had died, sending the country into mourning and delaying the official launch of the Truss plan for Britain.
After that official mourning period ended last Monday, her government rolled out a wave of radical policies, culminating on Friday in announcing £45 billion ($48 billion) in tax cuts. The measures include eliminating the top rate paid by the highest earners in adjustments that would benefit the wealthy more than millions of people on low incomes.
According to the Truss government, the rationale is that cutting personal and corporate taxes will boost investment and kick-start the British economy.
In an interview with CNN’s Jake Tapper last week, Truss defended her economic plans, saying her government is “incentivizing businesses to invest and we’re helping ordinary people with their taxes.”
But Truss’ plans backfired almost immediately. The pound fell to its lowest level in nearly four decades on Monday, at one point close to parity with the dollar. It looks like the Bank of England will raise interest rates, making it harder for those lucky enough to get a mortgage to repay, while banks looking to get mortgages already seem to have withdrawn products.
On Wednesday, the Bank of England announced that it would buy UK government bonds to “restore orderly market conditions” and prevent “dysfunction” from a cut and subsequent fall in the pound.
The International Monetary Fund (IMF) issued a rare rebuke to a developed country on Tuesday night, criticizing the UK’s tax-cut plans, saying they would “increase inequality.”
The chaos could not have come at a better time for the official opposition Labor Party, which held its annual conference in Liverpool this week.
Going into the conference, Labor was enjoying poll leads not seen since the days of Tony Blair, the last Labor prime minister to win a general election.
The Labor Party has suffered a lot since losing power in 2010. Its two previous leaders have struggled for their personal credibility on a range of issues from economics to security.
Jeremy Corbyn, the last leader of the party, came from the far left of the party. He was associated with known militants in the past, opposed NATO, shared common platforms and generally existed on the fringes of politics for decades.
When his successor Keir Starr took office in 2020, he received wisdom that his job would be to remove Corbyn’s influence in the party and then hand it over to a new leader, perhaps closer to 2030 than the next scheduled general election in 2024.
In Liverpool this week, however, Starmer’s Labor legitimately looked like a government-in-waiting. This is hardly remarkable considering that even a year ago Boris Johnson looked like the undisputed champion of British politics.
But after scandals plunged his premiership and the Conservatives’ approval ratings, the unassuming Starmer, a soft-spoken lawyer with a smart haircut and unremarkable suit, really looks like he could be the UK’s next prime minister.
In his two years at the helm, Starmer has succeeded in appeasing many elements of his party attracted by Corbyn. It has gone from being home to far-left radicals to a party whose conference this week attracted corporate lobbyists who were only too happy to bankroll events and rub shoulders with the potential next government.
And after years of accusations that Labor was somehow anti-British when Corbyn was in charge, this year’s conference opened with delegates singing the national anthem.
Those around Starmer are tempering their optimism. Labor had tasted power before, only to be disappointed when the next general election came around. The UK, particularly England, has traditionally been a Conservative-voting country. Previous Labor governments largely gained power thanks to Scottish support.
All this has been lost since the 2014 independence referendum, in which Scotland voted to remain in the UK by a margin of 55% to 45%. This disaffected almost half of Scots and threw their support behind the pro-independence Scottish National Party.
The Labor Party also has a form of making inappropriate mistakes. While this year’s conference went off largely without a hitch, there was one near-miss.
On Tuesday, a video surfaced of a Labor MP calling Conservative finance minister, Chancellor Kwasi Kwarteng, a “superficial” black. MP Rupa Haque had her party whip removed almost immediately, meaning she has been expelled from the party and now sits as an independent. After Haq Tweeted She apologized for the comments, which she described as “improper justice” by Kwarteng.
And Labor Party members are well aware that the Conservative Party plays the game of politics better than most. The term “natural party of government” may sound strange, given the chaos surrounding Truss at the moment, but the Conservatives prefer to win at almost any cost.
However, none of this is of much comfort to Conservative MPs.
“Every problem we face now is self-inflicted. We look like reckless gamblers who only care about people who can afford to gamble,” one former Conservative minister told CNN on Wednesday morning.
Taking aim at the team around Truss, which is largely made up of liberal Conservatives, the former minister said: “We have made the mistake of thinking that things that go down well in free-market think tanks will go down well in the free market. ”
Things don’t look good for Truss, with fears in Labor circles that the current polls are more a reflection of Conservative disaffection than enthusiasm for Labour. Many question whether Starmer really has the strength of personality to win over enough voters to defeat the Conservatives comprehensively at the next election.
That caution can be born out of a reluctance to get ahead of yourself. And their misgivings about Starr may be why some Conservatives are quietly optimistic that Truss has more personal substance than her Labor rival and could win over him in the future.
It is undeniable that expectations in British politics have changed this week. For the first time in years, the next election is unquestionably a Labor defeat.