A few weeks into her new role Liz Truss and her Chancellor Kwasi Kwarteng would have been forgiven for thinking that Tory conference would have been something of a party. After all, Tory party members favoured her candidacy by some margin – even if Conservative MPs were more enamoured by the now extremely quiet Rishi Sunak.
Of course, the opposite is true. Some of the more over-excited of the commentariat are warning that Truss needs to save her administration after markets delivered a punchy verdict on her mini-budget last week. That is, of course, absurd: or at least it should be. If the Conservative party thinks an internecine squabble over the leadership would be good for either them or the country, they truly have taken leave of their senses. But Truss and her colleagues do have quite the job to do to restore confidence in their management of the country.
Step one in the rebuild comes today, with Kwasi Kwarteng’s ‘stay the course’ speech. He has the unfortunate task of keeping restive Tory MPs onside, keeping Tory members convinced that this really is the second coming of Thatcher (at least in their imagination) as well as giving markets confidence in the party’s commitment to fiscal responsibility. It is, as they say, an unenviable task.
But the Chancellor should have the courage of his convictions. The budget was a communications disaster, but it does have a host of measures within it which will boost growth in the medium- and long-term. Further promised supply-side reforms around childcare and regulation will, we are told, also be distinctly pro-growth in their intention. It is shock therapy for the economy, and the point about shock therapy is that it isn’t very pleasant in the short-term. What Kwarteng must now do is explain why it’s necessary – even if the answer to that may be rather painful for his party, which after twelve years of being in government has summarily failed to solve Britain’s growth and productivity puzzle.