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The constitutional causes and consequences of the Truss-Kwarteng budget crisis

By Rowan Hall, on 5 October 2022

Within weeks, Liz Truss’s premiership was plunged into economic and political turmoil due to Kwasi Kwarteng’s ‘mini budget’. But this crisis, suggests Meg Russell, has distinctly constitutional roots. Building on Boris Johnson’s legacy, Truss chose to sideline expert officials and regulators, and shut out her own MPs. The consequences that have since befallen her are a compelling advertisement for respecting – and rebuilding – appropriate constitutional checks and balances.

The Conservative Party conference, indeed the entirety of Liz Truss’s new premiership, has been severely destabilised by the market reaction to Chancellor Kwasi Kwarteng’s ‘mini budget’. Far from securing Truss her desired reputation for acting on the energy crisis and boosting the economy, and a positive bounce in the polls, Kwarteng’s 23 September ‘fiscal event’ saw the pound plunge, lenders withdraw mortgage products, and Labour achieve record poll leads. Faced with a mass rebellion by Conservative MPs, Kwarteng performed a U-turn on abolition of the top rate of income tax, while other parts of the package may face further such trouble ahead.

Fiscal policy is well beyond the usual scope of the Constitution Unit blog, or of this author. But the extent to which the unforced economic and political crisis built on foundations of poor constitutional and governance practice is striking. Boris Johnson played fast and loose with many constitutional norms, and Liz Truss seems quickly to have followed suit. But her now catastrophic position – with some Conservative MPs calling for the Prime Minister’s removal after less than a month in the job – demonstrates just how shortsighted and dangerous such behaviour can be.

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Monitor 76: Democratic lockdown?

By Rowan Hall, on 12 November 2020

The latest edition of Monitor, the Unit’s regular news update on constitutional issues, was published today. In this lead article from Monitor 76, Meg Russell and Alan Renwick discuss the key events and themes of  the past four months. They include tensions between devolved and central govermnent related to Brexit and COVID-19; concern about parliamentary scrutiny of the pandemic; criticism of the government’s commitment to the rule of law (called into question by the UK Internal Market Bill, the Faulks review and criticism of the legal profession); the Russia report and other concerns about the country’s electoral framework; and the reshaping of government and civil service operations by Number 10.

England entered a new COVID-19 ‘lockdown’ just before Monitor went to press. The pandemic continues to dominate politics in the UK and globally, with a return to politics-as-usual appearing distant. Both the handling of the crisis and the government’s latest actions on Brexit have been key factors driving serious concerns about the maintenance of constitutional norms in the UK. But as this latest Monitor catalogues, the roots of those concerns – about declining respect for conventions and deliberate or accidental erosion of ‘checks and balances’ – are now spread across many fields.

There was tolerance in the early stages of the pandemic for quick decision-making, and partial bypassing of parliament. But that has increasingly grown thin. The UK is one of many countries where concerns have been expressed about COVID facilitating an executive ‘power grab’. Worldwide, experts have warned that ‘democracy, human rights and the rule of law cannot be allowed to become the collateral damage of the pandemic’. Most key decisions at UK level have come via secondary legislation, often published at short notice with little or no opportunity for parliamentary scrutiny. Increasing protests from MPs, parliamentary committees and the Commons Speaker (see page 5) extracted concessions from ministers that parliamentary oversight would increase – hence the difficult vote on the new lockdown arrangements on 4 November. A total of 34 Conservative MPs voted against the new regulations – which represents almost half of the government’s working majority – and others abstained; though the measure passed comfortably with Labour support. A concerted cross-party approach from the start might have been sensible, but can be uncomfortable for ministers, particularly when accompanied by internal party dissent.

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