Liz Truss’ waning power brings political plots, and jokes

LONDON (AP):

Powerless, humiliated, labelled a “ghost” prime minister and compared unfavourably to a head of lettuce — this is not a good week for Liz Truss.

Britain’s prime minister was scrambling to recover her grasp on power on Tuesday after her economic plans were ripped up and repudiated by a Treasury chief whom she was forced to appoint to avoid a meltdown on the financial markets.

Truss remains in office, for now, largely because her Conservative Party is divided over how to replace her.

In a bid at business as usual, Truss held a Cabinet meeting on Tuesday, where, her spokesman said, there was an “in-depth discussion” of the new economic plan, and no one asked her to resign.

Truss also met lawmakers from rival Conservative factions, arguing that keeping her in the post can provide stability, even though she has had to ditch almost the entire prospectus on which she was elected party leader just six weeks ago.

Chastened but defiant, Truss acknowledged on Monday that “mistakes were made” — but insisted she would lead the Conservatives into the next national election.

Few believe that Britain’s lively, partisan press is unusually united in the opinion that Truss is doomed. The Conservative-backing tabloid The Sun called her “a ghost PM” and said “for the sake of the country, we cannot go on like this”. The left-leaning Guardian compared the Conservatives to a mutinous ship’s crew, saying, “Truss has not left her party. But it appears to have left her.”

After The Economist said Truss’ time in control of the government — before the September 23 ‘mini-budget’ that set the markets aflame — was “roughly the shelf-life of a lettuce,” the tabloid Daily Star set up a livestream featuring a photo of the prime minister beside a head of iceberg, adorned with a blond wig, eyes and a mouth. It asks “Can Liz Truss outlast this lettuce?” — which, five days in, is gradually turning brown.

Truss initially tried to stay the course after her government’s package of 45 billion pounds (US$50 billion) in unfunded tax cuts spooked the markets, pushing up government borrowing costs, raising home mortgage costs, and sending the pound plummeting to an all-time low against the dollar. The Bank of England was forced to intervene to protect pension funds, which were squeezed by volatility in the bond market.

Under intense political and economic pressure, Truss last week fired her ally Kwasi Kwarteng as Treasury chief, replacing him with Cabinet veteran Jeremy Hunt, who had been sidelined since 2019.

On Monday, Hunt scrapped almost all of Truss’ tax cuts, along with her flagship energy policy and her promise that there will be no public spending cuts, saying there are “many difficult decisions” to be made before he issues a medium-term fiscal plan on October 31.

The market for British government bonds and the pound weakened on Tuesday as relief over the government’s about-face was tempered by the recognition that the new policies are likely to mean slower economic growth.

The pound fell 0.75 per cent against the US dollar to $1.1273 in late-morning trading in London, after jumping as much as 1.2 per cent on Monday. Yields on 10-year government bonds rose to 4.081 per cent after dropping to 3.973 per cent on Monday. Bond yields, which represent the return investors receive on their money, rise as a borrower’s creditworthiness decreases, and decline when it improves.