Exactly one year ago, Liz Truss took office as the prime minister of the U.K., promising a transformative era of free-market economics. However, the 12-months that followed her appointment painted an entirely different picture, marked by economic upheaval, political farce, and a series of unexpected events that shook the very core of British politics.
We revisit the most significant moments of Truss’ brief tenure and look at how they impacted the U.K.’s political and economic landscape.
The Dawn of a New Era
The first day of Liz Truss as PM was marked by high optimism and anticipation. The former foreign secretary pledged to address the issues hampering Britain’s growth and hinted at a pro-growth agenda that aimed to reshape the U.K. economy. However, the journey ahead was far from smooth.
Truss’ ambitious economic plan, dubbed “Trussonomics“, was introduced through a mini-budget just days after her appointment. The plan, which comprised a series of supply-side reforms and debt-funded tax cuts, was expected to stimulate the economy. However, it led to an unprecedented drop in the pound’s value, forcing the Bank of England to intervene with an emergency bond-buying program.
Despite the initial setback, Truss remained steadfast in her commitment to deregulation and tax cuts, believing it to be the key to fostering economic growth. However, her approach was met with strong criticism, with detractors arguing that it would only fuel inflation and fail to address the cost-of-living crisis.
Adding to the economic turmoil, Truss faced unexpected challenges that further complicated her tenure. The death of Queen Elizabeth II, just days after Truss’ appointment, resulted in a period of national mourning that disrupted the government’s schedule and delayed the implementation of Truss’ economic plan.
Furthermore, Truss was under immense pressure to address the energy crisis triggered by Russia’s invasion of Ukraine, which threatened to significantly increase energy bills for the U.K.’s most vulnerable citizens. Despite promising to cap energy bills, Truss’ energy strategy remained largely unclear, adding to the uncertainty facing the U.K. economy.
As the economic situation worsened, Truss found herself backtracking on several policies. In a desperate attempt to calm the turbulent markets, her key ally and the then Chancellor, Kwasi Kwarteng, reversed the flagship cut to the top rate of tax. Despite these efforts, Truss’ economic plan continued to falter, leading to rising mortgage rates and increasing economic instability.
Just when it seemed that things couldn’t get worse, Truss was forced to resign, ending her brief yet tumultuous tenure as PM. Her resignation came after a series of political scandals and a party row over state pensions. The abrupt end to her leadership marked one of the shortest tenures of a U.K. prime minister, leaving a legacy of economic instability and political uncertainty.
The Aftermath of Truss’ Leadership
A year after Truss’ appointment, the repercussions of her leadership continue to be felt across the U.K. The Ipsos poll shows that the public’s trust in the Conservatives to manage the economy significantly declined during Truss’ tenure and has yet to recover. This decline in trust has given the Labour Party a considerable lead in the polls, leaving the Conservatives in a precarious position with an election looming.
Moreover, Truss’ time in office has negatively impacted Britain’s reputation globally. According to a survey by EY, Foreign Direct Investment (FDI) into the U.K. fell significantly last year, placing the U.K. behind France. This decline in FDI, coupled with the U.K.’s underperformance post-COVID, paints a grim picture of the country’s economic prospects.
Despite her brief and controversial tenure, Truss remains a prominent figure in British politics. She continues to defend her economic approach, attributing the failure of her plan to a powerful economic establishment resistant to change. Truss is advocating for the overhaul of the U.K.’s sluggish economy and is expected to deliver a keynote speech on the country’s economic woes.
Liz Truss’ tenure as PM was a critical period in British politics, marked by high economic volatility and political uncertainty. A year on, the repercussions of her leadership continue to shape the U.K.’s political and economic landscape. As we look ahead, the lessons from Truss’ tenure offer valuable insights into the challenges and complexities of leading a nation through times of crisis.