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Denis Staunton: Truss poised to plunge UK into deeper division on accession to Tory leadership

Johnson loyalty candidate has doubled down on most radical vision of Brexit and adopted crudest possible position on culture war issues

Rishi Sunak and Liz Truss during a hustings event at Wembley Arena, London, as part of their campaign to be leader of the Conservative Party and the next UK prime minister. Photograph: PA Wire

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Denis Staunton London Editor
Fri Sep 2 2022 - 20:37

Around lunchtime on Monday, unless every opinion poll and survey of the Conservative membership is wildly wrong, Liz Truss will become the party’s next leader and will succeed Boris Johnson as prime minister the following day. If the outcome is predictable, the campaign has been anything but, leaving Britain on the verge of plunging deeper into the revolutionary politics of Brexit behind the unlikely figure of a former Liberal Democrat who campaigned eloquently in 2016 against leaving the European Union.

Sunak’s supporters were eager for him to face Truss rather than Penny Mordaunt in the final stage of the contest, based on the expectation that the foreign secretary would implode. A notoriously awkward public speaker, Truss appeared painfully light on detail compared with the former chancellor of the exchequer.

But as party members saw the candidates on offer, many became nostalgic for Johnson and they blamed Sunak’s resignation from the cabinet for triggering the prime minister’s downfall. Truss not only became the loyalty candidate but she doubled down on the most radical vision of Brexit and adopted the crudest possible position on culture war issues like LGBT rights and critical interpretations of Britain’s history.

At the same time, she made promises on the economy that horrified orthodox economists but delighted right-wingers in the party such as Iain Duncan Smith and John Redwood. While Sunak urged a prudent approach to the public finances, Truss promised tax cuts that would be funded by tens of billions of pounds in fresh borrowing.

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Her critics say that deficit-funded tax cuts will fuel inflation, push up interest rates and wreck the public finances without helping the most vulnerable to deal with the cost of living crisis. Julian Jessop, former chief economist at the right-wing Institute for Economic Affairs and a supporter of Truss’s politics, told the Spectator this week that the markets would recognise her strategy as one that will drive growth.

“The Treasury has been too quick to believe you need to start paying the debt down by raising taxes, both personal and corporate taxes. Far better to let the deficit take the strain,” he said.

“If tax cuts do mean more borrowing in the short term, I’m completely relaxed about that. I suspect the markets will be as well. If the consequence of this is a stronger economy and stronger public finances over the longer term, that’s a positive outcome that markets will actually quite like.”

Kwasi Kwarteng, who is expected to become chancellor of the exchequer under Truss, will introduce an emergency budget later this month to reverse some of the tax rises Sunak introduced. He will also have to offer a package of support for people facing the threat of destitution as energy prices rise by 80 per cent.

Truss initially ruled out what she called “handouts” but she is expected to offer direct help to the most vulnerable, requiring her to borrow tens of billions more.

Another piece of urgent business surrounds the Northern Ireland protocol, with a September 15th deadline for Britain to respond to the EU’s legal action over London’s failure to fully implement the agreement. The Northern Ireland Protocol Bill, which gives British ministers the power to unilaterally scrap most of the agreement, will take months to go through the House of Lords and back to the Commons before becoming law.

In the meantime, Truss is reported to be considering triggering article 16, which allows each party to unilaterally suspend parts of the protocol in certain circumstances. Invoking article 16 sets in motion a process of negotiation and Truss has presented her unilateral approach as an effort to put pressure on the EU, declaring that all they understand is strength.

There is no appetite in European capitals to renegotiate the protocol, particularly under duress following a British breach of international law. The European Commission has drawn up a plan to escalate retaliation as Britain takes each new step towards scrapping the protocol, first by passing the Northern Ireland Protocol Bill and then by implementing it.

At the upper end of the scale of possible retaliation are trade sanctions and even the termination of the Trade and Co-operation Agreement, actions that would further undermine market confidence in Britain’s economic future. But Truss may be trapped by her reliance on the wilder Eurosceptic elements within her party so that she is unable to back down even if she wants to.

If Truss has benefited from the betrayal narrative surrounding Johnson’s fall, the outgoing prime minister could swiftly become a problem for her. As long as he remains an MP he has the potential to undermine his successor and rally opposition to her if she attempts to make painful choices.

Her backbenches will already be overstocked with bitter former ministers and other MPs who feel unjustly passed over after she reshuffles the ministerial pack next week. If Johnson remains a viable political force, he can only cause her trouble.

Truss’s interest lies in her predecessor’s reputation being trashed as quickly and as comprehensively as possible. The privileges committee into his alleged lying to parliament over Downing Street parties offers one opportunity to remind Conservatives about the trouble with Johnson.

But revelations from inside Downing Street about other irregularities uncovered after his departure could be even more effective. The incoming prime minister could not stoop to such mischief making. But she knows people who can.

Boris Johnson