No.257 - Where is Liz Truss?

Dear James, 

Where is Liz Truss? Where is Kwasi Kwarteng? The pound has lost 21% of its value this year. On Monday it reached its lowest level ever against the US dollar at $1.03. Yields on ten year government gilts rose to 4.2%. Mortgage lenders have closed their doors to new customers. Our new government has crashed into the wall called ‘reality’. No one trusts it. Not the markets, not the people, not the Tory Party itself. And what do we hear from Truss and Kwarteng? Absolutely nothing! Zilch!

James, we live in an era of massive political miscalculation. It started with Brexit, spread across the pond to Trump’s election the same year, then to Russia when Putin Invaded Ukraine six months ago and then, back home, your Party chose a clown to be PM. Now, post-clown, the sorry story continues. Liz Truss’s government has been thrown at the first fence. No wonder she remains silent!

So what’s going on behind the doors of No.10? Obviously, panic! Liz Truss is not known as a lady with her own ideas. Like you James, she has changed her mind regularly over the last twenty years and seems perpetual prey to the nearest siren voice. Kwarteng is the latest ‘Liz Whisperer’. He is an ideologue with that typical Etonian separation from the realities of ‘normal life’. That reality in the form of international markets has suddenly hit him between the eyes. In an instant he has lost whatever trust the world had in him. Kwarteng is the latest doomed version of that Tory hunger for a messiah. Dominic Cummings was the first, then came Boris, then the inimitable Lord Frost, and now presided over by the infamous Jacob Rees-Mogg.

Last night the latest dose of reality came from the IMF. The IMF is the lender of last resort to the global financial system and is tasked with ensuring the stability of that system. Yesterday It launched the kind of warning usually reserved for financially errant third world nations. In a stinging attack on Kwarteng’s tax cutting agenda, it called on Liz Truss to reverse her policy. The IMF,s message was that the current policy would lead to a greater gap between rich and poor and would undermine the Bank of England’s attempts to control inflation. And indeed yesterday the Bank gave a clear warning that it would have to raise interest rates considerably in the near future. Mortgage borrowers across the land have been forced into to their very own panic mode with mortgage rates of 6% predicted for next year. This would put the costs of the average mortgage up from £870 to over £1,400 per month.

Amid this turmoil, the only response we’ve had from government so far is the attack by Lord Frost on the IMF itself, a brief appearance by that intellectual dinosaur John Redwood to defend the policy and a promise by Kwarteng to give a detailed analysis of his plans on November 23rd. November 23rd is seven weeks away which is a life time compared with the lightning moves of the current market indicators. Keep our heads down, pretend calm and insist that the policy ‘needs time to work seems to be the order of the day.

The world is watching the UK as if one of its own has gone completely mad. Late on Tuesday, Moody’s said that it was watching the UK credit rating very closely and the US treasury secretary, Janet Yellen, said the US was also “monitoring developments.”

Yesterday Kier Starmer made an excellent speech to the Labour Party Conference in which he claimed that the Tory’s ‘have lost control of the economy’. Then he put forward the outline of a plan for Britain’s, Fairer, Greener Future. Perhaps we can all see at last a future, free of crazed ideologies and much more rational than anything we’ve seen from your party James in the last six years. There’s hope yet!

James, many of your colleagues are despondent for the truth is that your party is dead in the water. The latest opinion poll put Labour about 17 points ahead of the Tories. No wonder we’ve heard nothing from Truss or Kwarteng.  Frozen into silence by their massive error, they’re probably looking for the nearest Trappist Monastery?

BH - Your Concerned Constituent