As I feared the new Prime Minister is demonstrating that she lacks the experience, the necessary skills, the judgment and many of the other qualities required. As I blogged earlier in the year the job is impossible, but some do it very much better than others and Ms Truss has certainly made a dreadful start. She has made errors in management, in economics, in politics, in foreign relations and is playing fast and loose with the constitution. In this blog I will take each of these in turn.

Management. One of her first actions was to fire Sir Tom Scholar, the Permanent Secretary to the Treasury of which the Prime Minister is the First Lord. It seems clear that if she had listened to her principal adviser instead of firing him, she may have avoided some of the mistakes she and her Chancellor of the Exchequer, Kwasi Kwarteng have made. She also cleared out some of the official staff at No 10 Downing Street. When the markets reacted badly to the Chancellor’s so-called mini-budget on 23^rd September it seemed that No 10 was surprised. Several of her cabinet appointments were beyond belief. I’m not going to list them all here but to appoint as Secretary of Health an obese cigar smoker and also give her the role of Deputy Prime Minister and two or three other jobs when the Health role is one of the most difficult of all cabinet jobs is bizarre.

Economics. Another early action was to declare that energy prices would be frozen for a period of two years and at the same time some handouts would come down the pipe to help the cost-of-living crisis. There is no question that energy prices have increased very substantially and will be very challenging for many households. In my case however I am on a fixed price tariff that was agreed in April last year for a two-year period and so I have not yet seen any increase in my energy bills other than the tiny amount of petrol that we use in our car. Perhaps from a political point of view something had to be done. It would appear that windfall taxes proposed by the Labour Party and others were ruled out on the grounds that they deter investment. There is some truth in that, but it might be interesting to remind Ms Truss that in Margaret Thatcher’s first budget as Prime Minister where she had a severe economic crisis to deal with one of her solutions was to indeed impose windfall taxes on the banks who despite the crisis appeared to have done very well. Also, in Margaret Thatcher’s first budget she didn’t reduce taxes, she raised them. Tax cuts came later when they were more affordable. But the biggest problem about this action is that it is completely unfunded. No one knows, certainly not Ms Truss or Mr Kwarteng, just how much this is going to cost because no one can forecast with accuracy what the prices of energy are going to be over the next two years. For someone who describes herself as a free-marketeer this colossal intervention is extraordinary.

The so-called Mini-Budget proposed the largest set of fiscal measures in my lifetime and that is why I called this blog the Maxi-Budget. It was positioned in this way as a deliberate attempt to get round the rule that ever since George Osborne introduced the Office of Budget Responsibility, that independent group must have the opportunity to review budget proposals before they are presented to Parliament and to indicate their own forecasts of the impact. When George Osborne introduced the measure, he explained clearly that it was designed to get more accurate forecasts as all Chancellors have tended to seek to influence the Treasury in their forecasts. This cynical action again produced a terrible result from the markets who realised that this was a government that could not be trusted.
  
The Chancellor then made things worse by indicating that more tax cuts were on the way without giving any explanation as to how these will be funded. Soon after Simon Clarke, the new Secretary of State for Levelling Up, Housing and Communities added that big spending cuts were also coming in. This undoubtedly would have a negative impact on poorer members of society.

Politics. I can see that there is an economic argument to reduce the upper rates of tax. Indeed, when previously the upper rate was reduced from 45% to 40% it did lead to an increase in the amount of tax that was collected as the better paid became more willing to pay that tax and not seek to avoid it perhaps by moving to a more sympathetic jurisdiction overseas. But the political argument against it in my opinion is much stronger. The timing was simply wrong when so many people are struggling with the cost-of-living crisis. To suggest that the rich will be better off is simply bad political judgement. By all means indicate that you want to get to the point where we can make that change but to do so at the same time as a great many people are struggling is just bad politics. Of course, this particular argument is now already proven as the Chancellor has withdrawn this proposal and so we already know that unlike Margaret Thatcher this lady is for turning.

Similarly, the economic argument for allowing bankers bonuses to be uncapped is very powerful. One may argue that what actually happened since the EU imposed this on the UK and the rest of the EU nations is that instead of a large proportion of bankers’ remuneration being geared to successful outcomes, now a much more significant part of it is simply paid for turning up as base salaries have increased in proportion. But again the politics should trump the economics. It just looks unfair.

Foreign relations. The mistakes that have been made are already impacting on foreign relations. President Biden when he was in London to attend the funeral of HM Queen Elizabeth II refused to have a separate meeting with the new Prime Minister. We can remind ourselves that while Joe Biden had 81 million Americans vote for him as President Ms Truss had just 81,000 members of the Conservative party vote for her as the new leader of the Conservative party. President Biden then made it clear that there would be no new US-UK trade agreement.

The Constitution. I have already mentioned that the Chancellor rejected advice from the Office of Budget Responsibility and pretended that this huge range of fiscal measures was in some way a so-called Mini-Budget that did not require oversight by the Office of Budget Responsibility. To my mind this is simply unconstitutional. The rules were set up some time ago and were set up to be followed. By not following them they have not only risked Britain’s reputation for sound finance but also acted ultra vires.

But I think it goes further than that. We now have a process whereby the leaders of both major parties are elected not by their fellow members of Parliament as used to be the case but by the relatively unrepresentative unelected members of the party. To be clear we are not talking about people who voted Conservative but about people who are paid up members of the Conservative party. 17 million people voted for the Conservative party led by Boris Johnson in the 2019 general election.
  
Only a tiny fraction of that number voted in the leadership election and Ms Truss, while getting more votes than her rival Rishi Sunak still got less than 50% of the actual membership of the Conservative party. In my opinion that does not give her a mandate to vary from the manifesto that was presented to the British people in 2019. If she wants to vary from the manifesto, she has to win her own mandate in a new general election, and it is quite clear that is not going to happen because she would lose very, very badly indeed. So again she is acting unconstitutionally as very few of the proposals that she has made so far were in the 2019 manifesto.

But since it is the case that she is presenting proposals that were not in that manifesto then not only does she have the problem of convincing enough members of her party in the House of Commons to vote for these new measures. She also has the problem that she has to get the House of Lords to approve them too. The Parliament Acts of 1911 and 1949 limit the powers of the House of Lords to oppose Acts of Parliament approved by the House of Commons but the convention is that this depends on the manifesto. Acts that were not proposed by the winning party’s manifesto can be opposed and certainly delayed. Most of the new proposals were simply things that Ms Truss made in her campaign to that very small number of Conservative members. They were not in the Boris Johnson led manifesto in 2019 and therefore the House of Lords is free to oppose them. The Conservative party do not have anything like a majority in the House of Lords. Not only are they in the minority among the party-political representatives but there are also a very large number of independent crossbenchers, and I can imagine that most of those would be firmly against much of what Ms Truss and Mr Kwarteng are proposing. In that respect it would seem that according to many recent opinion polls they would be representing the views of the majority of the country.