The constitution and the fiscal statement disaster

Andrew Blick
By: Andrew Blick

The self-inflicted difficulties of the Liz Truss government have a variety of constitutional dimensions. The advent of an administration willing and able to embark upon the recent disastrous course of action is attributable in part to various interconnected features of the political system. The outcome of the attempted fiscal initiative also prompts some more general reflections.

The single member plurality (‘first past the post’) system employed for elections to the House of Commons has played a part. It means in practice that one of the two main parties can secure a majority of seats – thus enabling them to form governments on their own – while falling well short of 50 per cent of the popular vote. Within these parties, it is possible for particular groupings and viewpoints to come of the fore, even if they are not wholly representative of opinion among the voter base or the parliamentary cohort of the party. The party membership, moreover, can potentially choose a leader (and by extension perhaps a Prime Minister) to whom there is significant opposition among party MPs.

Taken together, these characteristics create the potential for the ascendancy within government of factions associated with radical, ideologically driven agendas that depart significantly from much opinion within the party of government and the wider public. The Truss premiership and its programme – including its controversial fiscal policy – represent a realisation of this potential. Up to this point, the Truss project appears in part to have been a vehicle for an assertive section within the Conservative parliamentary party, connected to the European Research Group. In the recent Conservative leadership contest, this faction was able to place a preferred candidate, Truss, in the role, via a vote of members, despite coming second in the final of the MPs’ rounds of voting. Installed in a new government, Truss and other ministerial colleagues have commenced implementing ideas associated with the tendency that elevated them, the early results of which we are witnessing.

A group that captures the executive finds itself at the head of a branch of the constitution that, in the UK system, has significant discretionary power and capacity for independent action – up to a point. Founded in and formed out of Parliament, UK governments are long accustomed to their fiscal proposals being passed unamended and with little difficulty. But the fate of the recent announcement demonstrates that latent limitations upon the executive exist and can become real. A range of factors – notably the markets, an intervention from an international organisation, the media, public opinion, and ultimately the parliamentary party – came together to inflict serious political damage, and to force a partial reversal of policy. This episode is one in which an hubristic administration, driven by ideological enthusiasm, failed to recognise the potential barriers to the exercise of its power.

The Truss government, perhaps unsurprisingly, seems to have inherited some of the disdain for convention that characterised the predecessor administration of Boris Johnson. The recent removal of Tom Scholar as Permanent Secretary to the Treasury; and the avoidance of releasing official forecasts through reclassifying an emergency budget as a fiscal statement, for example, are both suggestive of a government that, in seeking to eliminate any irritants or perceived obstacles to its goals, is comfortable with violating established norms. But the problems that followed the announcement demonstrate that such conduct can come at a cost, possibly far outweighing the supposed benefits. Ignoring custom and regular practice can, for instance, contribute to flawed, self-defeating policy with negative consequences, and to political friction. Johnson fell partly because of a failure to adhere to the standards and rules of the system (both voluntary and more formal). Truss may now also be fatally wounded, following an episode which involved the government overriding of norms.

A final observation involves the concept and exercise of sovereignty. An important strand of the Brexit project, which has persisted up to present, is the idea that being outside the European Union (EU) is a means of providing the control that the UK lacked while inside it. Membership of the EU, so the argument runs, denied the UK opportunities that Brexit would allow it to pursue. A key part of the Truss platform has been a commitment to the aggressive realisation of this supposed potential. But the market response to the fiscal announcement is a reminder that national sovereignty is always exercised subject to external limitations. In fact, it could be argued that, by leaving the EU, the UK deprived itself of the most effective means it had of helping to shape the transnational environment. Through Brexit, then, arguably the UK significantly undermined rather than enhanced its practical sovereignty. This issue, moreover, is wider than, and will presumably outlast, the Truss administration. There is at present a consensus across the leadership of major UK-wide parties that Brexit is irreversible, that difficulties it has generated can be eliminated, and that there are benefits to be reaped from it. Recent experience should cause all who hold such a position to reflect on the difficulties of reconciling such exceptionalist notions of constitutional autonomy with reality.

Andrew Blick is Professor of Politics and Contemporary History and Head of the Department of Political Economy at King’s College London and Senior Adviser to The Constitution Society.

The Constitution Society is committed to the promotion of informed debate and is politically impartial. Any views expressed in this article are the personal views of the author and not those of The Constitution Society.