Is there any way Truss could win the next election?

There is a narrow path, but it will require a lot of luck and better judgement than we've seen so far

(Photo by Toby Melville - Pool/Getty Images)

Back in February I wrote a post setting out why I thought a Labour majority at the next election was a good value bet. I still think it is. As I said then:

“[whoever replaces Johnson] will have an almost impossible job. All of the fundamental metrics look terrible. People will feel materially poorer in 2024 than they did in 2019 due to inflation and low growth. On current projections they’ll be, on average, poorer than they were in 2008. According to Government analysis released this week NHS waiting lists will still be growing – 15% of the entire population will be on one by then. Crime is rising again too. These problems have all been exacerbated by Covid but they are tied to a lack of long-term thinking about economic productivity and public service reform.”

When I wrote this the market gave the Tories a 30% chance of a majority and Labour a 20% chance. Now it’s 25% each so there’s a little less value but I think it’s still a decent bet, though I agree with the markets, as I did then, that a hung Parliament remains the most likely outcome. This is also the widespread consensus amongst commentators and parliamentarians, including Conservative ones, in private if not in public.

Truss’s first full week of activity, following the Queen’s mourning period, has magnified these doubts within her own party. It was notable that three of the first four Tory backbench questions to Kwasi Kwarteng after his ersatz budget were hostile. As Rachel Wolf, who co-wrote the Tories 2019 manifesto, has noted, the announcements of the past view days – from removing the fracking moratorium to undoing Sunak’s tax plans – “seem focused on reversing every decision that has irritated them…over the last decade.” Not a recipe for a united party.

Team Truss are pushing a narrative, eagerly lapped up by some pundits, that these reversals show they are prepared to do tough, unpopular, things that their predecessors were not, in pursuit of economic growth. But in reality most of these gestures are symbolic. Things like fracking, removing the bankers’ bonus cap, and abolishing the 45p income tax rate, will cause a huge amount of negative noise for little, if any, economic benefit. The two really substantive tax announcements – on National Insurance and Corporation tax  - simply reverse very recent tax rises or stop future ones from happening, so it’s hard to see how they could improve growth, as opposed to, at best, stopping things getting worse. And this at the cost of a risky and loose fiscal position, which has already led the pound to drop substantially and government borrowing rates to shoot up.

But there’s always a danger of slipping into confirmation bias, of deciding Truss is inevitably going to lose and then interpreting everything that happens in that light. As one subscriber said to me – “there seems such consensus that she will fail that it’s making me nervous, it feels like the Brexit referendum again.” One of the best ways to test your priors is by setting out what an alternative scenario might look like. So what follows is not a prediction but an attempt to set out what a path to a record fifth Tory election victory might look like, and what markers along the way would indicate it was on track to happen. Naturally it would depend on luck, as any election win does, but also how Truss uses any lucky breaks she gets.