Liz Truss’s meteoric downfall is being seen by some Brexiters as a Remainer coup. Peter Ramsay argues that this reading of recent events has cause and effect the wrong way round.
Despite appearances, the fall of Liz Truss is not really a coup, as some have claimed. It is true that the financial markets swiftly destroyed her incoherent and hastily announced mini-budget, and a caretaker government of Remainers is now in place pending a Tory leadership election. It is also true that while a new government elected by Tory MPs will be technically constitutional, it will probably lack democratic authority as it will be based on a political programme far removed from the platform the Conservatives were elected on in 2019.
What has happened does look a bit like a ‘soft coup’ of the sort that Italian politics has been repeatedly subject to in recent years. Governments are elected to pursue policies that contradict the central bankers’ narrow neoliberal orthodoxy, but they are stymied and replaced by technocrats committed to the same old, same old. But despite growing convergence, events in Westminster have not yet reached Italian levels of political failure. Jeremy Hunt is not a general, even metaphorically. Not only has he not put any tanks on parliament’s lawn, but, unlike Mario Draghi or Mario Monti, Hunt has not been appointed behind the scenes by outsiders. Liz Truss made him Chancellor in a desperate but unsuccessful attempt to prevent her own elected colleagues bringing her down, as they now have. They will replace her in an open contest. Central bankers played little part in the drama.
In any case, the language of ‘soft coup’ tends to hide as much as it reveals about the character of the events it describes, even in the Italian context. Why does a soft coup work? What sort of coup can be carried out constitutionally, without generals and soldiers with guns, without even a mob or two?
That Truss’s government has collapsed leaving Remainers in charge, and the pro-Brexit majority that brought the Tories to power in 2019 unrepresented, is much less the consequence of the evil machinations of a powerful technocratic elite (although no doubt there have been plenty of machinations), and much more the effect of the Brexiteers’ dire political weakness. Recent events result from the failure and decay of the elected much more than they do from the success and vigour of the unelected. The Tory Brexiteers have handed power back to the old order, and this experience speaks to the longstanding political weakness of British Euroscepticism.
This frailty of Euroscepticism is not the one that has been trumpeted by Remainiacs and Rejoiners. Superficially the events of recent weeks appear to confirm the basic thesis of the Remainers’ Project Fear. ‘You can’t buck the markets’, they said: and the markets, they claimed, dictated that Britain should Remain. Brexit was therefore always a fantasy, the argument runs, and recent events appear to bear this out with the markets’ reaction to the mini-budget having humbled Truss. The trouble is that what brought Truss down had next to nothing to do with Brexit, and rejoining the EU will not fix Britain’s economic difficulties.
Liz Truss and Kwasi Kwarteng brought themselves down because they were cut off in their own ideological bubble, isolated from the world outside and apparently unaware of its concerns. Pursuing a Thatcherite mania for tax cuts they took no notice of the fact that financial markets were already spooked by inflation and by the prospect of recession. Instead, they announced unfunded tax cuts and spending measures without even coordinating the policy with the Bank of England, let alone building wider political support for the measures. They seemed unable to grasp that tax cuts are not politically popular—even most Tory voters want taxes to remain stable or even increase—with the consequence that they would find themselves rapidly isolated in the face of speculative aggression against the policy. The financial markets quickly sensed just how vulnerable the policy was and started making big self-fulfilling bets against it.
The political crisis was of Truss’s own making, a result of ideological fanaticism uncoupled from any political nous. This combination was characteristic of the Tory Brexiteers throughout the Brexit crisis. Brexit is a political process that they led without ever understanding. Diehard Thatcherites, they rowed to victory in 2016 on the back of a populist rebellion against deregulated labour markets and by offering promises of more public spending. Nevertheless, they remained obsessed with deregulation and foreign trade. They never grasped why ordinary voters had voted for Brexit, nor did they have a vision of national sovereignty to inspire Leave voters in the struggle with the state’s elites that followed the referendum. When the Brexit Party defeated Theresa May in the 2019 European Parliament elections and forced the Tory Party’s hand, it wasn’t the Thatcherite Brexiteers who carried the day but the opportunist Boris Johnson. He dumped any hint of Thatcherism in favour of a populist pitch: respecting the 2016 vote and promises of investment and levelling up.
Johnson stormed to electoral victory, but just as Thatcherism could not enlighten the Eurosceptics as to the political character of the Brexit that Thatcherism had provoked, so populism gave Johnson no political resources with which to develop the levelling up programme he promised. (And this has not changed, so that even if he makes an improbable comeback in the next few weeks, he is very unlikely to be able to implement much of what was promised in 2019.) Johnson became mired in petty scandals arising from his own technocratic response to Covid-19, and so became vulnerable to the Thatcherites, who forced him out as soon as his popularity with voters faltered. They duly installed Truss and Kwarteng with their anachronistic Singaporean obsessions. As we pointed out at the time of Johnson’s fall, the pursuit of Thatcherite dogma could only undermine the authority of the nation-state and its sovereignty, and so it has proved with the rapid destruction of Truss’s government at the hands of the financial markets.
At the end of this sorry story, the old Remainer elite gets its revenge. It finds itself in a position to recover some of the ground it lost in its self-inflicted disaster of 2016-19. The Labour Party looks all but certain to win the next election. Even if Brexit is not to blame for the economic crisis, the Brexiteers have utterly failed in government and discredited the idea for many voters. But there is the rub for Labour and the Remainers. This situation has not really been made by them. They have opportunistically profited from the political incoherence and emptiness of the Brexiteers, populist and Thatcherite alike. But the old elite and the Labour Party have nothing to offer except a return to pre-2016 austerity, only this time with added stagflation.
None of the current economic crisis is down to Brexit. The same combination of high public indebtedness, inflation and recession menaces the Eurozone, if anything more severely than it does the UK. These problems are a consequence of the massive Covid lockdown and decades of underinvestment in energy production, compounded by sanctions against Russian oil and gas. All of these policies have been fully supported by Labour. Whoever rules over this winter and spring, living standards are going to be under severe pressure as energy prices sky-rocket, power cuts bite, and wider inflation remains high and persistent. Following the Truss debacle, the Remain doctrine of obedience to the markets will rule, and rejoining the EU will solve nothing.
The irony is that the Tories have destroyed themselves, but the party likely to replace them did the same to itself three years ago when, in its own deluded ideological frenzy of hostility to national sovereignty, it repudiated the political equality of the large majority of working class citizens who had voted for Brexit. All the existing parliamentary parties are intellectually dead and politically useless, except as vehicles for careerist politicians to strike culture war postures and cook up different justifications for police repression. These zombies need to be put out of their misery. We need new parties, and we need proportional representation (PR) so that the new parties can have real influence.
However merely writing this brings us back to Italy. It has PR and this has allowed Italian voters to destroy the old parties of left and right, that they inherited from the twentieth century, and to innovate new ones. But these parties, too, have failed, leading to the ECB’s repeated soft coups. Here, too, the capacity of the bankers to overrule elected government speaks to the political failure of the Italian parties. Their failure is quite specific and at root the same as that of the Thatcherites. The Italian populists appear unwilling to connect popular discontent to the tasks of Italy’s national sovereignty, while the Thatcherites are unable to understand that their ideas are partly responsible for the weakness of national sovereignty in Britain. A government that will be able to overcome the bankers and the markets is one that is first able to put together a real national growth plan that it builds political support for, and, second, has deep reserves of political authority with its supporters – and such authority can only be forged through a real proven commitment to representing those supporters.
This is what the idea of the soft coup obscures. It makes it seem as if critics of the status quo are up against a force as powerful as the military when what we are failing against is pen-pushers with fancy qualifications. Soft coups invoke the idea of resisting the bankers’ power when our problem is a different one: our problem is how to establish a collective political authority, so that we ourselves can constitute a nation-state with the power to set economic agendas and, if necessary, defy the markets to do so. PR is a necessary condition of this work, but only that. The sufficient condition is much more demanding than merely complaining about a malevolent elite.
The image of ‘a very British coup’ is really a comforting one, implying that ‘the men in grey suits’ are still there, calling the shots behind the scenes. But that old Establishment is long gone. Even if some pale imitations still wander the corridors of power, they no longer know their arses from their elbows. And that’s our problem.