Rishi Sunak gets into his stride during his first Prime Minister’s Questions on Wednesday.Credit:AP
How ironic that this season of national drama should come on the eve of the latest series ofThe Crown,a heavily fictionalised version of real events that plays fast and loose with history. Although perhaps that provides us with a useful frame for understanding this current era of British life:a politics based on castles in the air that also relies on questionable interpretations of the past.
The speedy demise of Liz Truss,and the discrediting of Trussonomics,proved the impossibility of running a country based on post-truth politics and post-truth policy. The former prime minister and her ideological soul-mate,the then chancellor Kwasi Kwarteng,tried to peddle the fallacy that mammoth unfunded tax cuts would spur higher economic growth. But their mini-budget never survived its first brush with reality. Even before Kwarteng had finished delivering his fiscal statement,the pound was nose-diving while government borrowing costs were soaring.
The Truss government was acting as if Britain was a global fiscal superpower – as theFinancial TimescolumnistJanan Ganesh cleverly observed,this was Reaganomics without the mighty dollar. Alas,currency and bond traders viewed the country more as an economic castaway,which had needlessly cut itself adrift from the giant market across the sea.
And now for something completely different...Credit:AP
The result was a financial iteration of the 1956 Suez crisis when,despite the loss of its empire,Britain made the mistake of thinking it remained a great power. That episode also ended in global humiliation,when US president Dwight D. Eisenhower demanded an immediate halt to Britain’s military operation to seize back control of the Suez Canal from the Egyptian leader Gamal Abdel Nasser.
Back then,the Americans threatened to wreck Britain’s financial system if the prime minister of the day,Anthony Eden,refused to reverse his decision to invade. This time Britain risked scuppering the UK economy all on its own,as Joe Biden strongly hinted at when he took the unusual step of publicly rebuking Truss’s trickle-down economics.
Not unsurprisingly and not unreasonably,Britain’s national mindset continues to be shaped by the glories of World War II rather than the ignominy of Suez. Unfortunately,however,this nostalgic nationalism,and the inflated sense of self-importance and self-sufficiency that goes with it,has accelerated Britain’s post-imperial decline. It is precisely this kind of wishful thinking,premised on a rose-tinted view of history,that led to Brexit – the root of the present turmoil.