A British friend who is a senior lawmaker in the Conservative Party and has a keen interest in South Africa, said at the weekend: “What’s going on here makes South Africa seem dull and stable by comparison.”
He was referencing the chaos unleashed by his country’s prime minister, Liz Truss, who, in a bid to restart the economy and anchor her premiership by turbocharging growth through unfunded tax cuts, landed up by Monday on political death row. Her likely execution as party leader and prime minister — she’s the fourth incumbent in just six years — now fills the airwaves and consumes her party, which enjoys the moniker, “most ruthless and successful democratic party of modern times”.
If Truss is ejected from 10 Downing Street, the “ruthless’’ adjective will be confirmed and, after less than two months in office, she will be in danger of becoming the shortest serving British prime minister. As a commentator wrote last week, she will need to stay in office until January 2 to escape this fate. George Canning, the title-holder, at least had the excuse that he died after just less than four months in the post. That was back in 1827.
On Friday Truss displayed her own version of brutal by firing her best political friend, Kwasi Kwarteng, who holds the dubious record of shortest serving Chancellor of the Exchequer, bar another dead incumbent, Iain Macleod, who died after just one month in office in 1970.
Before too many locals enjoy Schadenfreude at Kwarteng’s ejection after just 38 days, it is worth recalling at the heights or depths of state capture in December 2015 the lamentable Des van Rooyen, who lacked any background for the post, and was removed by the man who appointed him, former president Jacob Zuma, after a mere four days. A big difference, whatever the “Kwasikame” mini-budget Kwarteng cooked up according to the Truss recipe, is that it was not motivated by greed and corruption. But the net effect in both instances was to crash the currency and spook bond markets, as well as telegraph to the world that investment was imperilled and the sobriety of the National Treasury was at risk.
It is true Zuma was never accused of being a Thatcherite or any sort of ideologue, and famously had great difficulty reading a set of figures. No such excuses or explanations for Truss. She cast herself, to the point of mimicry, in the mould of former British prime minister Margaret Thatcher, and despite a background in economics and a spell as a minister in the treasury, seemed to forget one of Thatcher’s sternest warnings: “You can’t buck the markets.”
At one level Tress, who entered office on September 6, decided her economic programme, which her vanquished leadership opponent, previous chancellor and possible next prime minister Rishi Sunak, dismissed as a “fairy-tale”, needed to be implemented full-bore. Announce upfront £45bn in tax cuts, “with more to come” and energy subsidies, to offset the steady rise in direct and indirect UK taxes necessitated by public spending, rising inflation and surging energy prices. The hope was this would kick-start investment, spur growth and the tax cuts and spending plans would pay for themselves. This was classic, perhaps extreme, supply-side theory in action.
Instead, it didn’t long survive contact with harsh reality: the plan, when announced, terrified investors, spiked the price in gilt yields (the borrowing costs for government) and mortgages, and crashed the currency to levels unseen for decades. The Tory twin claims to economic competence and sound public finances, and as guarantor of a stable property market, crashed with it.
Little wonder that by this week the once most ruthlessly successful political party of the age was recorded as polling 36% behind Labour. The margin is not only the largest in 25 years, but the lead Labour now enjoys is larger than the percentage the party obtained in the last general election in 2019 (32%).
A poll is not predictive of a real result, of course. And the next election is still two years away. Kwarteng’s replacement as chancellor, Jeremy Hunt, showed on Monday, by reversing most of his predecessor and Truss’s big, bold plans and proposals, that he hews to the very treasury orthodoxy she disparaged. However, given he has also, with her apparent acquiescence, shredded the theory of the case she offered for her leadership and her irrecoverable unpopularity with the voters (her approval rating is minus 47%), many in her party will conclude her time is up. But installing a third leader in one year will make the clamour for a general election deafening.
There are though, two wider points in this saga.
First, assume there is a Tory wipeout in the next election. There will be a direct connection between that possibility and the disastrous crash of the Labour Party just three years ago.. It was then led by far-left ideologue Jeremy Corbyn. Truss might have former US president Ronald Reagan’s low tax and small state mantra as her ideological lodestar. Corbyn had Hugo Chavez and Venezuela as his role models. It would seem, at the risk of stating the obvious, that Brits are large on competence and moderation and low on zealotry and ideology.
Second, power grabs and political pretensions there will always be resisted by a humorous ability to poke fun at the affectation of leaders. The Economist compared Truss’s grip on real power, before she was forced into excruciating U-turns on her economic policy, as “roughly the shelf life of a lettuce”.
Then there was the contribution by a reader of the Financial Times, who posted on Truss: “She will be gone soon. Her legacy is quite impressive, she buried the queen, the pound and the Tory party.”
While Hunt on Monday dismantled most of “Trussenomics”, bowing to public and market pressure, at home there was also a welcome and rare government U-turn. President Cyril Ramaphosa, under intense political pressure and public outrage, binned the ministerial perks book he approved in April. It would have allowed cabinet elite unlimited free utilities and dozens of state domestics and minders. Multimillionaire cabinet members guzzling at the public trough while the rest freeze in the dark was a gift for cartoonists.
So it is hard in a democracy to buck the markets, economic or public, it would seem. And mocking the great is a healthy antidote in hard times. It can even force U-turns.
Tony Leon, a former leader of the opposition, now chairs Resolve Communications. @TonyLeonSA