UK is embroiled in two-year ideological battle between left-wing Labor and libertarian ‘Toryism’
Chaotic, unprecedented, the breakup of the conservative party. This is how the circumstances of British politics are described today. MPs confess to the media that the die has been cast, that they will lose their seat in 2023 and will have to look for a new job. Others assess the fallout from an overthrow of Liz Truss, such as those who overthrew Theresa May and Boris Johnson.
A party so successful in maintaining power is divided and undergoing purges. Johnson expelled the deputies linked to the opposition to prevent a march without the consent of the European Union. Truss has only appointed those in the cabinet who supported her in the campaign to replace Johnson. She was elected by eighty thousand party members, after she did not have the majority of the faction in parliament.
In the sometimes bitter campaign, he blamed his rival and former finance minister, Rishi Sunak, for failing to keep his pledge not to raise income taxes in the 2019 election manifesto. Two months after those elections, the Covid epidemic spread, leading to an extraordinary surge in government spending. According to Sunak, the tax increase was necessary to reduce the debt.
Truss delivered on her election promise by withdrawing Sunak’s tax hikes, while also announcing that she would spend at least €70 billion to lower rising energy prices. Sunak, who lost the election to replace Johnson, had warned of the risk of capital markets reacting against the pound if Truss kept his promise.
Not only did he do it, but his finance minister, Kwasi Kwarteng, added cuts in other taxes, making it clear from day one that this is a libertarian, low-tax, pro-corporate government. Sunak’s prophecy was more than fulfilled. And Truss and Kwarteng have been linked to unprecedented chaos and the breakup of the conservative party.
But interpretations of the attack on the pound and on bonds have varied: the arrogance of Truss and Kwarteng; another opportunistic and hysterical reaction from the stock markets; the role of derivative financial instruments, which already caused serious damage in 2008; some believe it was a predictive flare-up of the crisis that will trigger the central banks’ monetary expansion since then and their recent sluggishness in the face of inflation.
The UK economy, sixth in the world, has the second lowest debt, as a percentage, of the G7 countries and some notable data. In the first quarter a historical deficit, 8% of GDP, on the current account (the difference between what it consumes and what it produces). It is the only developed country where the number of people of working age withdrawing from the labor market after the pandemic is increasing. There are already 9 million and the most common reasons are chronic pain and mental health.
The European divisions of the Conservative Party have led to political instability, but for the first time in more than a decade, there is an opposition striving to rule. Unlike the recent elections in Germany, France or Italy, where there was continuity of governance or where general democracy issues were discussed, in the two years remaining until the next British election, two ideologies will face each other.
Truss will struggle to defend the legitimacy of governing with doctrinal determination when elected by a number of people who would fit in a football stadium, but he will be stubborn in affirming his belief that through reductions, he will receive an annual will achieve growth of 2.5% in taxes and the elimination or amendment of regulations that impede business activities.
Labor is proposing a more left-wing policy than that of Tony Blair, whose landslide victory in 1997 is now predicted by the polls of current leader, Keir Starmer. Most notable are the nationalization of the railways and the creation of a public company to promote renewable energy. It also has internal divisions, but the desire to rule muffles them.
The latest UK Social Attitudes Report shows a shift in favor of the opposition. 52% want an increase in taxes and spending on health, education and social subsidies. 40%, keep them. 6%, to be reduced. For the first time, there is a small majority in favor of changing the majority system for a proportional electoral system.
Source: La Verdad
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