Is Brexit at the roots of British Prime Minister Liz Truss' quick exit?
AILSA CHANG, HOST:
Well, British Prime Minister Liz Truss resigned after a 45-day tenure.
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LIZ TRUSS: I cannot deliver the mandate on which I was elected by the Conservative Party. I have therefore spoken to His Majesty the King to notify him that I am resigning as leader of the Conservative Party.
CHANG: And that was her announcement in front of 10 Downing Street this morning. Just a few weeks ago, the British pound hit an all time low amid political and economic turmoil. One question coming up a lot is, how did the U.K. get here? Did the Brexit vote six years ago play any role? Well, to talk about that, Financial Times political editor George Parker joins us now from London. Welcome.
GEORGE PARKER: Hello.
CHANG: Hello. OK. So we just heard Liz Truss mention her mandate there, which was to deliver high economic growth, low taxes. How would you characterize what went so wrong in all of this?
PARKER: Well, I suppose the simplest way to look at is the government, led by Liz Truss, became taken over by free marketeers. Unfortunately, didn't seem to understand how the free market works. So they launched a series of economic policies and tax cuts funded by huge amounts of borrowing into an already volatile international situation of the economy. And the markets took one look at it, decided the sums didn't add up. They thought the government was being reckless. They thought it was undermining some of the institutions that normally act as guardrails to any economic policy like the Bank of England, for example. And they started selling British assets. The markets went into freefall. And the government quickly had to reverse tack.
CHANG: OK. I hear you. But the thing is, British politics, I mean, it's been pretty turbulent since the U.K. voted to leave the European Union in 2016. And I mean, by the end of this month, your country will have had, what, five prime ministers in a little more than six years. How much do you think Brexit is to blame in all of that turnover?
PARKER: I think it's certainly - very large elements of it. It's introduced an element of division into British politics that wasn't there before. As you remember, the vote in 2016 split the country down the middle and the winners, including the people who've been running the government in the last 44 days, believed that they had to show that Brexit worked. They had to deliver on what - Liz Truss was even today calling the promise of Brexit, by which she means deregulating stuff, cutting taxes and turning Britain into a small state, sort of a version of Singapore. The problem is those policies, as it turned out, didn't fly with the markets. They also didn't fly with the electorate because the opinion polls suggest the public hated some of this stuff, including tax cuts for the rich, for example, and they rejected it. So Brexit sort of injected sort of a toxicity into the British political bloodstream, destabilized what had traditionally be seen as rather a stable democracy, the U.K. And it's becoming increasingly frenetic. So we ended up looking - we have ended up looking in the last few years more like a country like Greece or Italy, I guess.
CHANG: Well, have you seen any financial benefits since the U.K. left the EU? What do you think?
PARKER: No. No. I mean, the Financial Times that I work, for course, is a paper which opposed Brexit, so I should say that. But look. I mean, the official government forecasters say that Brexit will leave the U.K. in the medium term about 4% poorer than it otherwise would have been. And that amounts to a huge hit to revenues to the treasury, about 40 billion pounds a year, which coincidentally is exactly the hole that Liz Truss was trying to fill in the public finances. So that has definitely been a problem. It's making (inaudible) trade with the European Union more difficult. It's made life harder for small businesses. And it's extremely hard to point to anything really which counts as a benefit of Brexit.
CHANG: That is George Parker, political editor for the Financial Times, talking about the role that Brexit may have played in all the political and economic turmoil that we have seen in the U.K. Thank you so much for joining us.
PARKER: A pleasure. Transcript provided by NPR, Copyright NPR.