7 September 2022

Liz Truss and the cost of winning

In her campaign, she told party members what they wanted to hear. The new prime minister’s troubles are only just beginning.

By David Gauke

Photo by Andrew Milligan / POOL / AFP

Winning the premiership was the easy bit for Liz Truss. Her success was not inevitable – at the beginning of the Conservative leadership contest you could have got odds of 12/1 – but her chances were widely underestimated. The right of the parliamentary party was always likely to ensure that it had one candidate in the final two, and the other candidates of the right fell by the wayside. Priti Patel did not enter the race, Suella Braverman only received support from the ultras, Kemi Badenoch impressed but was too junior, Penny Mordaunt provoked suspicion by seeking to be a unifier. Truss started slowly – only 50 Tory MPs supported her in the first round – and could have fallen in a crowded field. But the fixers in the European Research Group (ERG) could see what was happening and ensured that she was on the membership ballot. She owes them.

There is a curious video clip, released by Rishi Sunak’s team, of the final MPs’ vote being announced. We see Sunak in his office, back turned to the camera. We hear Mordaunt’s support being declared (105), then Sunak’s (137). At this point, he knew that he was on the final ballot and that he had the most support from MPs but he merely nodded his head. It was only when Truss’s result was announced – 113 – that Sunak and his team celebrated. It appears that Truss was the candidate he wanted to face.

If so, that was a mistake. She understands what Conservative Party members want and she knows how to give it to them. She had concluded that they liked Boris Johnson, and she stayed loyal to him. They admired his boosterism, and she emulated it. But they worried that there was a lack of ideological clarity about Johnson, a willingness to allow too big a role for the state and an acceptance of higher levels of tax. Truss not only recognised this concern but genuinely shared it. She would be the continuity Johnson candidate, but also a more ideological candidate.

Sunak’s supporters may have hoped that Truss would implode. She can be a poor communicator and an impulsive policy-maker. There have been stumbles along the way – the botched announcement on regional public sector pay, her initial rejection of “handouts” in response to soaring energy prices – but her hustings performances were confident and she avoided the risks of lengthy broadcast interviews by not doing them. Her core message – “I will deliver a bold plan to cut taxes” – may be misguided but it was consistent, straightforward, authentic and designed to appeal to her immediate electorate.

Sunak, in contrast, gave the impression that dealing with crises is really rather complex, with lots of annoying trade-offs. He even tentatively suggested that Johnson had not behaved quite as well as he should have done. Neither message was well received by the members. To compensate, Sunak turned himself into an unconvincing culture warrior.

It was to no avail. But while Truss won, she did so at a cost. She said the right things to her party membership but, as prime minister, she is left boxed in and vulnerable in three areas in particular.

[See also: Liz Truss and the cost of winning]

The first is the cost-of-living crisis. Truss has made the argument for a smaller state, but, even if one thinks that is the right course of action in normal circumstances, these are not normal circumstances. Whatever merits low taxes and deregulation may have, their impact on the cost of living this winter – especially for the poorest – will be marginal. A small state will not give them more money or insulate their homes. As for rapidly expanding renewables which could (at the margins) improve our security of supply in the near future, Truss instead plays into the suspicions held by some on the right about the green-energy sector. She will, apparently, stop “filling fields with paraphernalia like solar farms”. And what if we have a cold winter and we face a shortage of energy? This is not a far-fetched scenario, and many European countries have developed plans to ration non-domestic energy if necessary. Truss, however, has guaranteed party members that she will not do so. What happens if we are in such a situation is less clear – presumably we will simply have random blackouts.

The UK has just recovered from one emergency – the Covid-19 pandemic – when the state took exceptional powers in response. This was deeply troubling for many Conservatives and, as memories fade of the realities of that crisis, a myth has grown on the right of politics that the response – lockdown restrictions and emergency public spending – was unnecessary. That myth influences the thinking of some on the right about how to respond to the energy-cost crisis. The fear is that this will be another excuse to expand government spending. Truss – by refusing to set out her thinking beyond tax cuts – allowed some to believe that she will resist this.

Substantial assistance under Truss faces a further difficulty. Her campaign has been based on £30bn of unfunded tax cuts (relative to current planned increases). She also vowed to increase defence spending to 3 per cent of GDP (from 2.1 per cent) by 2030. Add significant support to mitigate energy prices, and the aggregate sums of money look eye-watering at a time when the government’s debt interest payments are growing. Cutting taxes may appeal to her members, but it seems an odd priority to the country at large.

On this point, Truss will be more pragmatic in government than when campaigning, even embracing a market-unfriendly price freeze on energy bills. Some of her more dogmatic supporters may be disappointed, but that is unavoidable if Truss wants to survive.

The second area where the instincts of the membership leave her vulnerable is Europe and the Northern Ireland protocol. No leadership candidate challenged the consensus within the party that the EU is to blame for the customs border in the Irish Sea, that the UK is entitled to address this unilaterally, and that it is perfectly reasonable to legislate to rewrite a protocol signed three years ago.

This has attracted little attention but it really is a quite extraordinary position. It requires a complete rewriting of history (sorry, but the checks were part of an agreement that was at the heart of the 2019 general election); involves the acceptance of a flagrant breach of international law; makes it harder to resolve the issue in question (because the EU cannot afford to be seen to be bullied); and has every chance of ultimately inflicting a trade war on an already fragile UK economy.

With great skill and luck, Truss may find an answer. She might convince her followers that she is being tough while being sufficiently pragmatic to reach a deal with the EU.

It is possible. But the hardcore Brexiteers, now well represented in the cabinet, will be watching and will not tolerate compromise. They have a well-developed sense of betrayal, and they have not forgotten how she voted in the Brexit referendum. Their support got her where she is, and, as I say, she owes them. What the ERG giveth, the ERG may ultimately taketh away.

The third area where Truss has indulged the views of members is their attitude to Johnson. It is evident that many Conservatives do not understand why he was forced to resign. Sunak, instrumental in that happening, has paid a price for acting. Truss has sided with the membership.

This has served her well in the short term but creates a problem for her in future. If there was no good reason for him to resign, there is no good reason why he could not – like Cincinnatus – return. Some of us might argue that he was forced out in disgrace and is wholly unsuited to hold high office, but it is too late for Truss to make that argument. This leaves her with an ambitious figure on the back benches, nursing a grievance, popular with the membership and with a record of winning general elections in difficult circumstances shortly after assuming the leadership. This will not be a comfortable situation for Prime Minister Truss if she is trailing in the polls in a year’s time.

On the cost-of-living crisis, Europe and Johnson, one can accuse Truss of lacking bravery in confronting the membership. She has focused on the Conservative Party, not the country at large; she has been tactical, not strategic; she has told an unrepresentative minority of the population what they have wanted to hear, however unrealistic. All this is true, but did she have any choice?

To win the leadership of the Conservative Party, one needs the support of Conservative members. A leadership candidate can challenge the membership’s dogmatism, populism and indulgence of Johnson, but such a candidate will not win. Liz Truss has long understood that better than most, and it is an insight that has helped make her prime minister. It is not an insight, however, that will guide her well now that she is in office.