Truss can’t hide from the crisis she created

For a politician who only a few days ago was bravely mocking Vladimir Putin as a ‘sabre-rattling’ loudmouth ‘desperately trying to justify his catastrophic failures,’ Liz Truss has turned out to be the greatest coward ever to be prime minister.

At least Putin feels the need to justify the catastrophe he has inflicted. Truss and her Chancellor believe they can hide away like children putting pillows over their heads to escape a bad dream, and say nothing at all.

The public may not understand the full ramifications of the crisis the Conservatives have unleashed in a moment of ideological delirium. The technical reasons why the Bank of England had to promise a £65 billion bond-buying programme to stop pension funds from selling off assets may go above our heads. But we know what the Bank means when it says the government has unleashed ‘a material threat to UK financial stability’.

We have a basic enough grasp of economics to guess that pumping yet more billions into the economy will be inflationary. We can see interest rates rising as a consequence, and those of us with mortgages shudder. We can see the pound collapsing, and know that its fall is the world's judgement on Truss and Kwarteng’s disastrous experiment. People with pension plans see enough to realise the Conservatives have shrunk them. The millions – no tens of millions – wondering how they will heat and eat in the coming months can see inflation rising. When the International Monetary Fund says ‘we do not recommend large and untargeted fiscal packages at this juncture,’ and then adds that ‘the nature of the UK measures will likely increase inequality,’ we see what it is getting at..

The one thing we cannot see is our leader. Where the hell is she? Hiding in a darkened room reciting lines from Atlas Shrugged to ward off evil spirits? Calling an emergency meeting of free market think tanks in the hope that another dose of voodoo economics will magic the crisis away?

Leaders need to be seen. They need to explain a crisis to the voters and tell us how they intend to lead us out of it.

Truss and Kwarteng cannot perform their basic duties because they have led themselves (and the rest of us) into a trap. Lord Nick Macpherson, former Permanent Secretary to the Treasury, said on Tuesday that Kwarteng had ‘broken a cardinal rule: don't look like an outlier relative to other G7 countries’. The UK was now the wounded beast adrift from the herd, and predators with hungry eyes were bearing down on it. ‘The markets now have sterling and gilts in their sights,’ he continued. ‘There will be rallies followed by brief substantive lurches downwards. We probably haven't seen the bottom’.

To escape back to the safety of the G7 herd, Truss would have to reverse the tax cuts Kwarteng announced last week. Abandoning her Reaganite agenda will destroy her premiership before it has begun and leave as a lame-duck Prime Minister. ‘You know what, I don’t care,’ I hear you say, ‘why should Truss put her career before the national interest?’ But she cares. And so does Kwarteng.

Alternatively, the markets might buy massive spending cuts. The great economic historian Adam Tooze wrote earlier this week that he suspected Kwarteng would use the crisis to slash public services. If Tooze was implying conspiratorial intent, he is attributing too much foresight and rationality to the clique of wide-eyed fanatics who now control our government. But he makes a fair point nevertheless. Perhaps a desperate government will order a vast reduction in public spending to reduce the pressure.

Yet does anyone think that the markets will believe that with every part of the public sphere looking broken: that even this government would have the guts to tear up the state and slash meagre benefits with only two years before a general election. There would be riots in the streets if the government told the poor they must suffer so it could borrow money at extortionate rates to give the 1 per cent a tax cut. Frankly, it looks like there’ll be riots in any event.

Two malign trends you can trace back to the Brexit referendum have come together to push this country over edge. The first is a contempt for expertise. Anyone who tells our rulers what they don’t want to hear is dismissed as ideologically impure. During the Conservative leadership campaign, Suella Braverman, a Truss outrider who is now Home Secretary, apparently questioned whether the Bank of England was ‘fit for purpose’. One of Kwarteng’s first act as Chancellor was to fire Tom Scholar, Permanent Secretary at the Treasury, because he was a leading proponent of the ’Treasury orthodoxy’ Truss was railing against. (You know the orthodoxy that says that you shouldn’t tank the pound, or bankrupt mortgage holders or trash the public’s pensions. That orthodoxy.)

After the bank and the Treasury came the independent Office for Budget Responsibility. Kwarteng stopped it assessing his mini-Budget, presumably for fear it would come out with unhelpful comments such as ‘are you out of your mind?’

The question arises: why is such a dangerous man even in the Treasury? The answer lies in the post-Brexit shrinking of the Conservative party from a broad church to a weird sect that makes the Scientologists appear sensible. First Boris Johnson either withdrew the Conservative party whip from or drove away Tory politicians who would not accept a disastrous Brexit deal. His cabinet was a coalition of all the chums not of all the talents, as he excluded any Conservative politician who was not his made man. Truss only managed to attract the support of 50 MPs in the first round of the Tory leadership election . She had no broad base of support. Undeterred, she still filled the cabinet with sycophants like Johnson before her.

She ought to fire Kwarteng, reappoint Rishi Sunak as Chancellor, and pray he can clean up the mess she has made. There’s no chance of that.

My guess is that when she finally dares show her face, Truss will insist that she is right and the world is wrong. The world will listen politely and then start hammering us again.