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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What role should party members have in leadership elections?

As Boris Johnson and Keir Starmer continue to be investigated for possible breaches of lockdown rules, it is conceivable that both major parties could hold leadership contests in the near future. What role should party members have in those elections? The Unit asked Paul Goodman, Cat Smith and Tom Quinn for their view. Tom Fieldhouse summarises their responses.

The Westminster system, where the leader of the largest party in the House of Commons usually becomes Prime Minister, makes how parties select their leaders (and the electorate), matter enormously to the health of our democracy.

In light of the continuing uncertainty about whether the current Prime Minister, Boris Johnson, will face a leadership challenge, the Constitution Unit held a webinar on 7 April 2022, entitled ‘What role should party members have in leadership elections?’. The event was chaired by the Constitution Unit’s Director, Professor Meg Russell, and she was joined by three distinguished panellists: Paul Goodman, Editor of Conservativehome and former Conservative MP for Wycombe; Cat Smith MP, Labour Member of Parliament for Lancaster and Fleetwood; and Dr Tom Quinn, Senior Lecturer, Department of Government, University of Essex

The summaries below are presented in the order of the speakers’ contributions. The video of the full event, including a lively and informative Q&A, is available on our YouTube page, while the audio version forms a Unit podcast.

Paul Goodman

Paul began his contribution by providing some useful history, reminding us, that Conservativehome (under its previous editor), had risen to prominence when it campaigned for the right of Conservative Party members to have a role in electing party leaders.

He went on to explain that, at least in relation to Labour and the Conservatives, an intractable tension exists that prevents a perfect solution. On the one hand, party leaders are the leader of a political organisation – and so it follows that to have a democratic culture the party members should elect the leader. However, because both parties seek to govern (via exercising a majority in the House of Commons), they also need their leader to enjoy the confidence of MPs – suggesting it should be they who decide instead. Paul thought that, considering this tension, the best solution involves both members and MPs each having a say, and that the present Conservative Party system actually does quite a good job in this regard.

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What happens when the Prime Minister is incapacitated?

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Boris Johnson’s admission to hospital has led to speculation about who is ‘in charge’, if he is not able to fulfil his duties. Former Unit Director Robert Hazell outlines the constitutional position when the serving Prime Minister is incapacitated, arguing that our parliamentary system allows for greater flexiblity than a system in which a president is directly elected.

Since Boris Johnson was admitted to an Intensive Care Unit, the airwaves have been full of speculation about how government will be conducted in his absence, and what would happen if his condition worsens; or worse still, if he fails to recover.

When he formed his government, Boris Johnson appointed Dominic Raab as First Secretary of State as well as Foreign Secretary, and when he went into intensive care Johnson asked Raab to lead the government in his absence. So Dominic Raab will chair meetings of the Cabinet and the main Cabinet committees, and at the end of the discussion he will sum up and pronounce their collective decision. He will represent the government at its regular COVID-19 press briefings, unless he invites another minister to do so: as Johnson himself did in asking Health Secretary Matt Hancock to talk about health issues. And Raab will lead on all the government’s day-to-day business, and in responding to any other emergencies: for example, convening meetings of the National Security Council if there is a flare-up in the Middle East. In all this he will be supported by Sir Mark Sedwill, now a very experienced Cabinet Secretary, and the staff of the Cabinet Office, as well as the civil servants and political staff in Number 10.

What will happen if Johnson is ill for longer than expected? The Cabinet would then have to discuss whether to continue with these temporary arrangements, or start to consider a longer term solution if it seemed unlikely that Johnson could return to office. That leads on to the further question, what would happen if Johnson failed to recover. In those circumstances the Cabinet would then discuss who should be appointed as his successor, and would advise the Queen accordingly. Back in 1963, when Harold Macmillan reluctantly resigned from his hospital bed, it was the party elders (led by the Lord Chancellor, Lord Dilhorne) who took soundings of the Cabinet, leading to the Queen being advised to appoint Lord Home as his successor. But party leaders are now elected by the party membership rather than emerging through secret soundings, which can lead to a much longer process, typically lasting three months if the leadership election is contested. However, these would be difficult circumstances in which to hold a leadership contest, and it is notable that since the change in their rules the Conservatives have twice managed to choose a new party leader without reference to the wider membership – Michael Howard being elected unopposed in 2003, and Theresa May in 2016, when two of her rival candidates were eliminated in the initial votes by MPs, and two other candidates withdrew. Continue reading

Who should pick party leaders: MPs, members or a wider public?

The Conservatives and Liberal Democrats are currently in the midst of party leadership campaigns that could change the country’s political course. The winner of the former will likely succeed Theresa May as Prime Minister, whilst the next Lib Dem leader could lend a crucial number of votes to the largest minority party in the event of a hung parliament. On 17 June the Constitution Unit hosted four experts in political party processes to discuss the question, ‘Who should pick party leaders: MPs, members or a wider public?’. Lorenzo Leoni summarises the speakers’ contributions.

The question of how parties elect their leaders has perhaps never been so pertinent to the wider political process. For the first time, the decision of who becomes the country’s next Prime Minister looks likely to be decided as a consequence of a party membership choosing their party leader, without the intervening event of a general election. The implications of this (and the growing influence of memberships in party leadership elections more generally) for our system of representative democracy have perhaps not been sufficiently articulated before now. This well timed seminar sought to address some of these issues by bringing together four party experts to help make sense of leadership elections:  Tim Bale, Professor of Politics, Queen Mary University of London; Mark Pack, editor of Liberal Democrat Newswire and former Head of Innovations at the Liberal Democrats; Jess Garland, Director of Policy and Research at the Electoral Reform Society and Paul Webb, Professor of Politics at the Sussex European Institute.

Tim Bale, Professor of Politics, Queen Mary University of London

Tim Bale opened the evening with what was perhaps the most timely analysis: that of how the Conservative Party chooses its leader. Unlike members of other parties, they have no direct influence on policy, so leadership elections are one of the only ways in which they can influence the party’s direction. Beginning with a brief pen-portrait of the party, he illustrated how the 160,000 or so members of the party are unrepresentative of the population as a whole: demographically they are middle class, over 50, white, and geographically concentrated in the South; ideologically they generally identify as either ‘fairly or very right-wing’.

Bale was sanguine about the fact that a small group of people are responsible for electing not only their party leader but the country’s Prime Minister. Whilst divergent from the wider population, Bale noted that Conservative members are not too dissimilar from the larger group of people who vote for the party at a general election: they are not a ‘breed apart’ from those who support the party come polling day. He also sought to remind the audience that the UK is a democracy that relies on party strength within the House of Commons to determine who should be Prime Minister. In that context, he argued, allowing the party to select their own leader (and therefore the Prime Minister) was not automatically a cause for concern.  

Bale argued that it is imperative that parties remain organisations of civil society rather than drifting into a position where they are over-regulated and closely entwined with the apparatus of the state. It is crucial they have agency to do as they wish and, as the ‘movers and shakers’ in our system, if the party commands a majority in parliament it is quite natural that their leader should also become Prime Minister.  Continue reading