Five prime ministers in seven years have been in power, the longest only two years, the shortest only forty-five days.
As the shortest-lived prime minister in British history, Truss left Downing Street in a lost spirit, and Downing Street is about to welcome its new owner.
The 42-year-old Sunak lost the battle with Truss 50 days ago, and never imagined that 50 days later, Sunak would become the British prime minister as the only nominee candidate.
Some say Sunak picked up a big leak, losing the election just over a month ago, and then ran successfully again and became the sole candidate for prime minister. While people envy Sunak for picking up a big leak, then the question is, can Sunak, who is coveted for the only hope, really be worthy of the big job? Will he really be able to save Britain, which is now in a mess? Will he really be able to sit full term? Before answering these questions, let's take a look at how Sunak's predecessor stepped down.
People are ridiculing Truss for being a short-lived prime minister, but calm down and think about it, the reason why Truss is so short-lived is not so simple. On the surface, Truss stepped down because his own governance measures failed to lead to his own downfall, but the problem behind it was the complete degradation of the British economy and institutions.
Truss's election as prime minister comes against the backdrop of former Prime Minister Johnson because of a scandal. Truss was elected in a short time and rushed to take office. In fact, we see that Truss did not have any achievements before he was elected, even when he was British foreign minister. There were also a lot of jokes. It was such a female politician with few achievements and mediocre abilities who took over a chaotic British political scene. Although people think that Truss is mediocre, she herself does not think so.
Truss always regarded himself as Margaret Thatcher's second, and in addition to imitating Margaret Thatcher everywhere in food, clothing, housing and transportation, even the policy after taking office was imitating Margaret Thatcher. It was this delusion that led people to think that Truss could save Britain as Margaret Thatcher did. It was in this way that she won favor, won votes, and became the prime minister in danger.
But Truss was not Margaret Thatcher after all, and she did not have that iron-fisted political talent. On the other hand, we see that Margaret Thatcher was the prime minister of Britain in the eighties, and Truss copied Margaret Thatcher's policy, and thirty years have passed, and now moving out unchanged seems to have a little taste of carving a sword.
Let's take a look at Truss's policy after taking office, the so-called tax cut, her tax reduction plan is mainly aimed at personal income tax, which is to reduce the tax paid by the people. It would have been a good thing to reduce taxes for the people, but she chose me at the wrong time. Much of this tax cut is focused on the high-income part of the wealthy British.
In addition, she canceled the original corporate tax hike plan, which together reduced the British government's revenue. It is very important that Truss also has to give subsidies to British families, and the cost before and after adds up to 200 billion pounds, you know, Britain's fiscal revenue last year was only 800 billion, and Truss's policy spent a quarter of Britain's fiscal revenue, which can be described as a large sum.
Truss seems to be thinking about the people. It should have received strong support from the population. According to polls conducted by Truss before he stepped down, Truss's support rating was only a little over 20 percent, a record low.
After a significant increase in government spending, after this year's energy crisis, the UK has little left of finances, and I am afraid that it will be difficult to reach even last year's level. What to do if there is no money, Britain can only continue to overissue government bonds like the United States. In this way, this part is made up for the deficiency.
One of the most injured demands for British pensions, such as old developed countries such as Europe, aging has long been a social problem, and there are a large number of elderly people in society waiting for pensions to live. Pensions need a lot of expenditure, in order to increase the appreciation of the pension in hand, not to have no money to issue, British pensions have chosen to buy government bonds, compared with other financial products, government bonds are still relatively stable. Steady and safe, the natural corresponding income will be reduced, in order to pursue greater returns, pensions slowly into higher income bank wealth management products, British pension will buy government bonds, mortgaged to the bank, so as to get a lot of cash, used to distribute to the people.
The expectation of a large number of over-issued government bonds, coupled with the superposition of this year's energy crisis, makes people more pessimistic about the future economic situation of the United Kingdom, and the effect is that the stock market and bond market both dive, and at this time the national bonds in the hands of pensions naturally depreciate, and the national bonds given to the bank as collateral are naturally not valuable before, so the national bonds held by the bank naturally depreciate. There is no value before, the bank's money has been lent out, and the risks naturally taken have intensified. Therefore, the bank requires the pension to increase the security deposit to offset their own risks. In order to raise a margin, pensions can only sell bonds in their hands. British gilts have experienced a sell-off in the past period, causing the price of British gilts to fall sharply.
With the fall of government bonds, pensions need to pay more margin, so they are selling, falling, paying margin, and selling again, so as to enter a dead circle.
The result was a near collapse of the bond market. In the end, everything was taken over by the Bank of England, which issued a large number of pounds to buy government bonds, and the pound plummeted, making the already high inflation of the United Kingdom even worse. Prices soared, and in the end it was all the British who paid for Truss's decisions. This is also why policies that seem to be for the sake of ordinary people everywhere end up not receiving popular support. This is followed by popular opposition and support, and this is the reason for the low approval rate.
In order to calm the anger of the people, Truss fired his chancellor of the exchequer. But it was too late, and the anger of the population was already difficult to quell. Conservative support has also plummeted. In order to save its election, the Conservative Party had to oust Truss, which is the direct reason why Truss suddenly announced his resignation just 45 days after taking office. But in the longer term, this is exactly what the UK economy is gradually declining. Truss just caught up with this point in time, with the concentrated outbreak of all contradictions. In this case, if anyone comes up, it will not do a very good job.
Let's look before
With the first industrial revolution, Britain accumulated a rich family wealth, which in turn led to the birth of the empire where the sun never sets. But after the first, Second World War, especially World War II, all the British family funds were basically lost. In order to protect itself, Britain had to sell its overseas assets, and until the end of World War II, the sun never set that year was actually gone.
After the end of World War II, Britain fully nationalized all infrastructure industries and provided social benefits, which short-term healed the trauma caused by the war. But then the problem is that all state-owned enterprises are inefficient, and the high welfare of society just increases the burden of the state, in order to maintain good welfare, the government can only increase taxes to increase revenue, enterprise costs rise, people's income decreases, workers demand higher wages, and a series of contradictions erupt in a concentrated manner.
At this time, the Iron Lady Margaret Thatcher came to power, and the tax cuts she introduced and the privatization of state-owned enterprises injected vitality into idle Britain and saved chaotic Britain. At this time, Britain had long lost its position as the leading big brother, surrendered to the United States, and became a regional country. To this day, Britain is still just a little brother behind the United States. Since then, the UK economy has also shifted from a real economy to a financial one. This is still the case today.
Today's British economy has been deeply tied to the financial industry, and any turmoil in the financial industry will cause turmoil in British society. That was true of the financial crisis of 2008, and it is still true of Britain today. There is very little left of Britain's dominant manufacturing industry. Blindly exaggerating the function and role of finance, in the end, will only make finance lose itself, once it encounters the epidemic, labor conflicts, and inflation caused by the energy crisis. Perhaps a small financial instrument will cause a full-scale economic crisis, which is the structural contradiction between Britain and the high welfare society. And Truss just stepped on the thunder.
Therefore, the departure of Truss is by no means the end of Britain's decline, but the beginning of the British economy's fall into the abyss. Sunak took the baton in Truss's hands, and whether he can lead LinkedIn out of the quagmire depends on his ability. But until the contradictions in British society are resolved, whoever takes office may have the same result.
Well, that's it for today, like a little attention and like, thank you!