Boris Johnson’s terrible farewell gift
During his last days as British Prime Minister, Boris Johnson made a farewell tour of the country. Perhaps he was expecting something like the accolades his beloved Roman generals received – a small arch in his honor, say – or at least a few angry Gauls walking miserably behind his chariot. Instead, he went to a field in South West England and looked at a hole in the ground.
The hole will one day be filled by super-fast internet cables, but it could also serve as a grave for Johnson’s hopes of remembering something other than the prime minister who ‘made Brexit happen’. After overseeing Britain’s departure from the European Union, the coronavirus intervened and his government’s national agenda became bogged down amid scandals over lockdown parties, wallpaper and corruption. His own ministers ousted him in July, when he announced he would remain “interim” until the Conservative Party could choose his replacement. The country Johnson handed over to his successor has been stuck in limbo all summer, anxious and adrift.
His Foreign Secretary, Liz Truss, replaces him today, and has inherited not so much an entrance tray as a portal to a nightmarish dimension. COVID-19 has been in the headlines. Truss has to deal with one of them – impending skyrocketing energy bills – but also a host of other problems, including high inflation, widespread social unrest and long waits for medical treatment. Whatever the opposite of a honeymoon is, that’s what she’s up against. “We’ll deliver, we’ll deliver, we’ll deliver,” Truss told the party after his victory was announced – in a flat, boilerplate acceptance speech that was more reminiscent of the goofy, serious prose of former Prime Minister Theresa May than Truss’ immediate speech. predecessor, the clown and charismatic Boris Johnson.
The first order of business will be to tackle the energy crisis triggered by the Russian invasion of Ukraine earlier this year and increased demand as the pandemic subsides. In Britain, average gas and electricity bills for ordinary households are capped by a regulator on the basis of wholesale costs. In October, the typical bill will be three times what it was 12 months earlier, and it is expected to rise further in January. Things are so dystopian that the price of one breakfast show call contest today was getting your energy bill paid for the next four months. A reputable forecaster expects the average UK household to pay the equivalent of £6,616 ($7,633) a year in gas and electricity bills by April.
Do you think that’s exorbitant? No price ceiling exists for businesses and public bodies. Restaurants, museums, nursing homes and schools are already warning that they cannot cope. Some regions are considering turning public buildings into “hot banks” – like food banks – for those who cannot afford to heat their homes. For many white-collar Britons now used to working several days a week from home, high energy bills could force them back into offices.
Truss cannot do much about gas prices in the European wholesale market. Russia is a major supplier of gas to Europe, and Vladimir Putin is fully exploiting the leverage this gives him in foreign affairs. Nevertheless, the new Prime Minister will face enormous pressure to support British households through the winter. So far, Truss has dismissed the idea of more direct support, insisting that tax cuts are his economic goal. Yesterday she said something no UK leader has said in decades: that the wealthiest will benefit the most from her tax policy, and she thought it was right. “Looking at everything through the prism of redistribution, I think that’s wrong because what I’m talking about is growing the economy and growing the economy benefits everyone,” a- she told the BBC.
Her adherence to the Laffer Curve, a beloved right-wing theory challenged by mainstream economists, suggests Truss will govern as she has, at least in this contest. The 47-year-old new Conservative leader began her political career as a liberal democrat – centrist – and voted to remain in the European Union in 2016. Since then, however, she has veered sharply to the right and has been rewarded with the support of libertarian and socially conservative members of the Conservative Party. With such a base, it will struggle to run larger deficits to fund public spending. And energy bills are far from the only problem facing average Brits. Every utility in the country is crying out for money after a decade of austerity, the COVID disruption and now the effects of high inflation. (The current figure is 10.1% and Goldman Sachs expects it to reach 22% next year.)
Take a train somewhere? Be prepared for the trip to be canceled or the car to be full to bursting: the railway workers have been on strike intermittently all summer. Waiting to testify in a criminal case? The justice system has been plagued by delays since the start of the pandemic, and prosecutors and criminal defense lawyers have announced what the BBC describes as an “indefinite and uninterrupted” strike, effective today. Want to send a letter? The postal workers still have two days of strike planned in the next fortnight. Need to repair your cataracts or replace your hip? Some 6.6 million Britons, 2 million more than before the pandemic, are currently on the National Health Service’s waiting list for non-emergency medical care. Need an ambulance? Over the summer, an 87-year-old man with a cracked pelvis waited 15 hours outside his home after a fall. His family made him a makeshift shelter with a football goal, garbage bags and umbrellas.
What makes this omni-crisis even more alarming is how few economic levers Truss can pull. She cannot reverse Brexit, or even soften its implementation: her party activists would devour her raw. A classic response to high inflation is to raise interest rates, but that’s a big decision in Britain, a country bloated with mortgage debt. In all cases, interest rates are set by the Bank of England, rather than the Prime Minister’s government, to protect them from political interference. Truss made noise to review the independence of the bank during the campaign; yesterday she tried to disavow that suggestion.
Why pick fights on purpose when there are so many other things to worry about? She might have played against the Conservative base to win the leadership election. The only people eligible to vote were dues-paying party members, so Truss spent the entire summer courting the populist right. Late last month, he was asked if French President Emmanuel Macron was a “friend or foe”. The answer should have been simple: France is both a key security partner and the preferred destination for Brits looking for a nearby sunny beach. And yet: “The jury is out,” Truss replied. Macron was pleasantly carefree at the insult, responding to reporters with a perfect Gallic shrug and a long exhale. Britain, he said, was a powerful ally of France, “regardless of its rulers, and sometimes in spite of its rulers.” Other fights less likely to go away: As a born-again Brexiteer, Truss is bracing for a showdown with the EU over Northern Ireland’s special status. And though culture war issues receded in the leadership race, as the scale of the economic challenge became apparent, Truss’ disregard for progressive orthodoxies (“I’m very clear that a woman is a woman “, she said at Wembley Arena) is a guaranteed line of applause for right-wing audiences.
What skills does Truss bring to this nightmarish situation? As the most recent foreign minister, she will be knowledgeable about the war in Ukraine, the status of negotiations with the EU and the risk of relying on imported energy. She has the capacity for intellectual change, having traveled from liberal to conservative, and the rest to Brexiteer. She is preparing to be prime minister – plotting, if we’re mean – long before the post officially becomes vacant, and so already has her ministerial team chosen and an emergency financial statement planned for the next few weeks.
Critics look to Britain’s third female prime minister, with her inky blue blouses and purple rhetoric, and call it an act of tribute to Margaret Thatcher. The test now will be whether Truss can weather an economic crisis as severe as any his predecessor faced in the 1980s, without dividing the country as Thatcher did.
Good luck, Liz Truss. You are going to need it.