GP Short Notes

GP Short Notes # 679, 23 October 2022

The UK: Liz Truss' resignation spins political chaos
Padmashree Anandhan

What happened?
On 17 October, Jeremy Hunt was appointed as the UK’s new chancellor replacing Kwasi Kwarteng as the announced economic mini-budget to “unfunded tax cuts” backfired. The plan resulted in sudden fluctuation in inflation, currency, and borrowing rates leading to domestic and international criticisms. According to an IMF spokesperson: “There is also a sense of problems in the country's economic management and their ability to handle issues, which could lead to problems of inflation [and] financial market difficulties.” Right after the appointment, Hunt reverses GBP 32 billion out of the GBP 45 billion announced under the economic plan of Liz Truss.
On 19 October, UK’s Home Secretary, Suella Braverman handed in the resignation citing technical infringement and raised concerns over the ruling government in terms of “honoring manifesto commitments” and immigration. Along with the resignation and the reversal of the economic plan not having a drastic change in the economy, the conservative party leader asked Liz Truss to step down.
On 20 October, despite continued meetings with the conservative party members, Liz Truss succumbed to the pressure and resigned as Prime Minister. The term longed only 45 days, and the labour party leader Sir Keir Starmer called for a general election.
On 22 October, BBC reported the probable candidates for contenting in the Tory leadership next. Rishi Sunak who was a former competitor against Liz Truss topped the list with support from 93 MPs, followed by Boris Johnson with the support of 44 MPs, and lastly Penny Mordaunt with 21 MP’s support. To go forward the support of 100 MPs will be required by the contenders.

What is the background?
First, the reversal of Truss’s mini-budget. Since the 2016 Brexit, UK’s economic management has been under pressure and the mini-budget plan which was supposed to boost the economy went in the opposite direction. The energy support package, aimed at keeping the unit price under the cap and slashing taxes was done to provide space to rework the economy but it prompting inflation, increased the risk of a recession, and the pound value crashed. With negative reactions within the conservative party, domestic and international asking for a reversal laid the basis for Truss to step down. If the budget had been introduced before Brexit, the immediate fallout could have been less burden on UK’s economy, but without its access to the EU market, its businesses still recovering from COVID-19 and reduced trade traffic, only the conservatives are at the receiving end for their bad economic plans.
Second, crack within the conservatives. Truss who was seen as the best replacement for Boris Johnson was expected to cut taxes and lead the party like a conservative, but the crack within the party is not only about the economic policy, leadership, or the selection process. Since Brexit, the differences between the nationalists and unionists over culture, climate change, and measures for the working class weakened the unity, immigration, and contending interest for the economy making it challenging to lead the party in one direction. Apart from this, the recurring contest for leadership within the party has prompted the members to grow a thirst for power and implement their vision for the UK. Brexit, combined with the widening differences after Truss’s administration has devasted the equation within the party members threatening its continuity in the UK’s political fora.
Third, the possibility of a general election. The previous contest to lead the Tories which longed to three months is not cut down where contenders for the next leadership will qualify upon getting backing from 100 MPs, Rishi Sunak or Boris Johnson emerging as the top two contenders will now be voted amongst the conservatives to select the next Prime Minister. If either one withdraws the candidacy, the other candidate will be chosen as the leader. If the Tories continue to be split the Prime Minister can call for a general election as per the Dissolution and Calling of Parliament Act 2022, which will prompt a confidence vote in the House of Commons, and if the government loses the vote, new elections will be held in next 25 days, this means a complete teardown of the Tories.

What does it mean?
First, the conservative party’s failure to stand put, Truss’s overarching dart to economic growth, and the effects of Brexit, the pandemic, and the Ukraine war, have tumulted the political and economic landscape of the UK into clutter. The next UK Prime Minister will have more pressure and a more complexed scenario than Truss to bring a pause to the ongoing chaos, but the continuity of the Torys till the 2025 general elections remains in the hands of the members than its leader.
Second, on the front, Brexit might be seen as a cause of the broadening ideological divide, economic challenges, and political chaos, for the EU always wants to grow its relations with the UK. For the UK whether it is the Tories or the Labour party accomplishing Brexit remains a priority. With the economic escalations, the UK might draw closer to improving its equation with specific EU member states but in cooperation with the Brexit agreement, the Ukraine war and tackling the energy crisis can be expected to be seriously affected due to the political instability ahead.

30 October 2022 | GP Short Notes # 681
Putin's address in the Valdai Club" Four Takeaways
30 October 2022 | GP Short Notes # 680
Elon Musk's Twitter deal
16 October 2022 | GP Short Notes # 677
UN deems Russia’s referendums illegal

13 October 2022 | GP Short Notes # 676
China: UNHRC proceeding on Xinjiang
9 October 2022 | GP Short Notes # 675
Trade and Statistics Outlook 2022-23: Four takeaways
9 October 2022 | GP Short Notes # 674
OPEC: The curious case of OPEC's production cuts
9 October 2022 | GP Short Notes # 672
Reducing Inequality Index 2022: Three Takeaways
2 October 2022 | GP Short Notes # 665
The new DART Mission: A new era of planetary defence

29 September 2022 | GP Short Notes # 669
Iran: Protests spark against hijab rules
25 September 2022 | GP Short Notes # 664
Putin and Russia's New Ukraine Strategy
22 September 2022 | GP Short Notes # 668
EU's food waste 2022: Three takeaways
18 September 2022 | GP Short Notes # 663
Sweden: 2022 elections reflect political polarization
18 September 2022 | GP Short Notes # 662
SCO Summit 2022: Who said what
16 September 2022 | GP Short Notes # 666
Global Estimates of Modern Slavery 2021: Six takeaw
16 September 2022 | GP Short Notes # 665
North Korea: New legislation hinders denuclearization talks

16 September 2022 | GP Short Notes # 664
Ukraine: Counteroffensive in Kharkiv and Kherson
11 September 2022 | GP Short Notes # 661
Bangladesh: Sheikh Hasina’s State visit to India
11 September 2022 | GP Short Notes # 659
Russia: Military exercise Vostok 2022

8 September 2022 | GP Short Notes # 658
The UN report on Xinjiang: Four Takeaways
1 September 2022 | GP Short Notes # 656
Iraq-Al-Sadr Withdraws, Protests Intensify
7 August 2022 | GP Short Notes # 653
Sri Lanka starts bailout talks with IMF
31 July 2022 | GP Short Notes # 651
Tunisia: Referendum paves the way for one-man rule

24 July 2022 | GP Short Notes # 649
Putin’s meeting with Khamenei and Erdogan
17 July 2022 | GP Short Notes # 648
Elon Musk Versus: 'Twas a troll after all
3 July 2022 | GP Short Notes # 643
NATO 2022 Strategic Concept: Four takeaways

26 June 2022 | GP Short Notes # 639
Saudi Arabia: Rapprochement with Turkey

26 June 2022 | GP Short Notes # 638
Europe: Approving Ukraine's candidature for the EU
8 May 2022 | GP Short Notes # 635
EU: New sanctions on Russia

24 April 2022 | GP Short Notes # 631
Russia: New nuclear-capable ICBM test

17 April 2022 | GP Short Notes # 629
Elon Musk and the battle for Twitter
10 April 2022 | GP Short Notes # 627
New actions and sanctions on Russia

28 March 2022 | GP Short Notes # 625
Europe: The new focus on defence
28 March 2022 | GP Short Notes # 624
The G7 Summit: Focus on Russia and Ukraine’s defence
20 March 2022 | GP Short Notes # 622
China: A careful strategy on Russia and Ukraine
13 March 2022 | GP Short Notes # 620
China: Fifth Session of the 13th NPC
13 March 2022 | GP Short Notes # 619
Ukraine: The Versailles declaration of the EU leaders

6 March 2022 | GP Short Notes # 617
Sanctions against Russia: Effects and Divides
12 February 2022 | GP Short Notes # 614
Quad summit in Australia: Focus on the Indo-Pacific 
12 February 2022 | GP Short Notes # 613
The One Ocean Summit: A framework toward conservation
5 February 2022 | GP Short Notes # 612
Escalation and de-escalation in the Ukraine crisis
29 January 2022 | GP Short Notes # 610
The Normandy Format: Europe, Russia and Ukraine
15 January 2022 | GP Short Notes # 609
Mali: Tensions escalate as ECOWAS imposes sanctions
15 January 2022 | GP Short Notes # 608
Kazakhstan: Russia, China and the protests
15 January 2022 | GP Short Notes # 606
India, China 14th round of military talks in Ladakh
8 January 2022 | GP Short Notes # 605
The US: Remembering 6 January

Click below links for year wise archive
2021 | 2020 | 2019 | 2018

Click here for old Short Notes