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

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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Boris Johnson’s constitutional legacy

Boris Johnson’s premiership is expected to end on 6 September, when it is anticipated that he will offer his formal resignation to the Queen at Balmoral and make way for the winner of the Conservative Party leadership election. Lisa James demonstrates that his time in office has been marked by an impatience with constitutional checks and balances and a willingness to depart from convention. She argues that his legacy risks being the normalisation of such behaviour.

What have been the major issues and challenges during Johnson’s premiership? 

Constitutional controversy has been a consistent feature of Boris Johnson’s premiership. His first months in office, amid the turmoil and acrimony of the late-2019 Brexit deadlock, were marked by the unlawful prorogation of parliament, suggestions that he would defy the law, and briefings from allies that if the Commons withdrew its confidence he would ‘dare the Queen to sack him’.

Thankfully, the monarch was not dragged into Johnson’s resignation this summer. But the Prime Minister stepped down only after a tense standoff with his own party, as it forced him from office over a series of standards-related scandals. The most prominent of these, partygate, will outlast Johnson’s premiership – with the Privileges Committee’s investigation into whether the Prime Minister misled parliament ongoing.

Though the intervening years perhaps lacked such obvious constitutional fireworks, these topics were never off the agenda. The Johnson government’s reform programme, and behaviour, often provoked controversy; the COVID-19 pandemic raised questions about how the country should be governed in times of crisis; and the fallout from Brexit heightened tensions over the territorial constitution, as discussed elsewhere on this blog – particularly in Northern Ireland.

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Rebuilding constitutional standards: five questions for the next Conservative leader

Boris Johnson yesterday fired the starting gun on a Conservative leadership race which should make the winner Prime Minister. Meg Russell, Alan Renwick and Robert Hazell pose five key questions which Conservative MPs and others are encouraged to ask the party leadership candidates, based on recent public, parliamentary and expert concerns.

Boris Johnson’s premiership has been marked by ever-growing concerns about the maintenance of various constitutional standards, which in recent days have reached fever pitch. These were echoed repeatedly in ministerial resignation statements and calls for him to go. Recent opinion polls meanwhile show strong public support for constitutional standards of integrity and accountability.

Conservative MPs now have an opportunity to choose among candidates to take Johnson’s place, which also creates an important constitutional responsibility. A high priority when picking the next Conservative leader should be to restore the standards essential to UK democracy, in order both to rebuild integrity in politics, and to work towards rebuilding public trust.

This blogpost sets out five key questions for Conservative leadership candidates, reflecting concerns raised by the public, independent expert organisations, and MPs themselves. Conservative MPs and others are encouraged to prioritise these questions, and raise them with the candidates when the party is making its choice.

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What happened to the Constitution, Democracy and Rights Commission?

The 2019 Conservative Party manifesto promised to appoint a Constitution, Democracy and Rights Commission to conduct a wide-ranging constitutional review. In practice, this promise has not been delivered. Tom Fleming and Petra Schleiter discuss this by summarising their recent article about the Commission, Radical departure or opportunity not taken? The Johnson government’s Constitution, Democracy and Rights Commission, as published in ‘British Politics’.

What did the government promise?

At the 2019 general election, the Conservative Party’s manifesto promised to appoint a ‘Constitution, Democracy and Rights Commission’. This body would be tasked with reviewing various aspects of the constitution and producing proposals ‘to restore trust in our institutions and in how our democracy operates’.

The Commission’s proposed remit was very broad, encompassing many of the central elements of the UK’s constitution. It would be asked to examine: ‘the relationship between the Government, Parliament and the courts; the functioning of the Royal Prerogative; the role of the House of Lords; and access to justice for ordinary people’, as well as the Human Rights Act, administrative law, and judicial review. However, the manifesto was decidedly vague about how the Commission would be organised. There was no information about its proposed membership, format, or timeline, beyond a commitment that it would be established within a year of the election.

The manifesto’s language suggested that this proposal stemmed in part from the government’s experience of the Brexit process. This was most obvious from the manifesto’s controversial description of ‘the way so many MPs have devoted themselves to thwarting the democratic decision of the British people in the 2016 referendum’ creating ‘a destabilising and potentially extremely damaging rift between politicians and people’. This led some observers to warn against the dangers of the Commission ‘fighting the last war’ rather than crafting durable constitutional reforms.

Whatever its motivation, the proposed Commission had the potential to be a radical departure from previous investigations of constitutional reform in the UK. In particular, it held out the prospect of a joined-up review of multiple interconnected constitutional issues. Such joined-up thinking is vital for ensuring a coherent reform agenda, but has been conspicuous by its absence in recent decades.

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The Fixed-term Parliaments Act did not cause the Brexit impasse

Next week MPs debate the government’s bill to repeal the Fixed-term Parliaments Act 2011. One argument frequently deployed for scrapping the Act is that it generated gridlock over Brexit. But, Meg Russell argues, no clear counterfactual to support this claim has ever been presented. In fact, when considering the possible scenarios, it seems likely that the situation would have been made worse, not better, had the Prime Minister retained an untrammelled prerogative power to dissolve parliament in 2017–19.

Next week MPs debate the remaining stages of the Dissolution and Calling of Parliament Bill, which seeks to repeal the Fixed-term Parliaments Act 2011 (FTPA). It proposes to reinstate the pre-FTPA position, whereby the Prime Minister would effectively control general election timing using prerogative power. A key argument deployed by those seeking repeal of the FTPA is that it helped to cause the Brexit deadlock of 2019: that the FTPA, as the Conservative manifesto put it, ‘led to paralysis at a time the country needed decisive action’. But to what extent is this really true?

While suggestions that the FTPA created the Brexit deadlock are commonplace, most experts who contributed to the three parliamentary committees that have considered FTPA repeal (the Commons Public Administration and Constitutional Affairs Committee, Lords Constitution Committee and Joint Committee on the Fixed-term Parliaments Act) argued that the deadlock resulted from other factors. Most obvious were the post-2017 combination of a minority government, the need to deliver on a contested referendum result, and deep divisions within the governing party. These problems were clearly serious, and it is very far from clear that the FTPA could have resolved them.

A careful reading of the evidence presented to the three parliamentary committees, and of the Commons second reading debate on the bill, finds that most claims against the FTPA over Brexit are distinctly vague. No clear counterfactual is offered. This particularly applies to events during Theresa May’s premiership, when the most intractable problems arose. The situation did change in the autumn of 2019 under Boris Johnson (as discussed below), but the FTPA’s targeting as a causal factor dates back far earlier than this. Likewise, during interviews with a series of senior figures for a current book project on parliament and the Brexit process, I have asked several critics of the FTPA how, if Theresa May had been able to trigger an early general election without parliament’s consent, things would have turned out differently. I have yet to receive a convincing reply.

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