Only a month in, Liz Truss is a prime minister without credibility

Editorial: In the traditional eve-of-conference BBC interview, Liz Truss continued to maintain that the terrible reaction to her Budget in financial markets was in fact a reaction to Vladimir Putin’s war in Ukraine

The PM has only one hope, that her drastic economic action will turn the country’s economy around in lightning speed (Reuters)

Prime ministers are done for when they lose their credibility. Gordon Brown never recovered from being frightened out of calling a general election. Theresa May revealed herself to be ridiculous in the 2017 election campaign. Boris Johnson made it transparently obvious that he could not be trusted or believed.

Liz Truss, not yet a month into the job, has already lost hers and the consequences will be the same. She will go through the Tory party conference refusing to back down, refusing to change course. But she will also continue to refuse to be honest about its consequences, and everybody but her can see what they are.

She is already if not delusional, then seeking to delude others – but they are not fooled. In the traditional prime minister’s eve-of-conference BBC interview, she continued to maintain, as she did in her disastrous round of interviews on Thursday, that the terrible reaction to her Budget in financial markets was in fact a reaction to Vladimir Putin’s war in Ukraine (it isn’t), or a reaction to her much-needed energy market intervention (it wasn’t – this intervention happened three weeks ago).

She goes into her conference 33 points behind in the polls. This is the worst polling result in modern – and quite possibly ancient – times. It is happening because of her and her chancellor’s deliberate strategic choice to make her tax cuts for millionaires the defining moment of their mini-Budget. And that Budget also required borrowing huge amounts of money just to cut taxes, at a time when huge amounts of extra spending were also necessary, and the rates to borrow money were rising.

She set fire to her credibility in that moment and it will not come back. She has also made it worse. For the entirety of her leadership election campaign, she promised there would be no cuts to public spending. Now, her chancellor has made no effort to conceal the inevitable – that public spending cuts are indeed coming, and they will have been made all the more severe as a direct result of the decisions he made.

She promised that the pensions triple lock would stay in place – that pensions will continue to rise in line with inflation. But she declined to say the same about benefits, a tacit but nonetheless clear admission that they won’t. Ms Truss has a huge parliamentary majority. It was won on the back of promises by her predecessor, and one of those was a promise to raise benefits in line with inflation. It was not her promise, but it was the promise made to the voters on whose patronage she depends, and she is going to break it.

She has only one hope, that her drastic economic action will turn the country’s economy around in lightning speed, and the voters who have stampeded away from her turn around and come straight back again. To do so, many of them will have to be prepared to overlook the disastrous impact she has already had on their mortgages.

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There is almost no analysis to be found in the mainstream that thinks this can possibly happen. She has been accused of trying to attempt Reaganism but without the dollar. One of Reagan’s most important economic advisers, David Stockman, now 75, has responded to her Budget by asking: “What are they smoking?” (Though it must be said, Arthur Laffer, now 82, he of the Laffer Curve fame, appears to think she is a genius and will be vindicated almost immediately.)

Michael Gove, in many ways the Tory Mandelson, is clearly on manoeuvres. Reacting to the prime minister’s BBC interview, he made it clear he might not even be able to find it within himself to vote her Budget through. Rebellions on budgets are enormous. If you cannot pass a budget, you cannot govern. If there are 40 others to be found like him, and if they actually go through with their threats, the Truss administration will be over before it has begun.

That specific outcome seems unlikely, but the same will almost certainly happen in a different way. The beginning of the end is upon us.