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Everywhere you look at the moment, the news is grim. The soaring cost of energy. The plunging pound. Putin’s threats to use nuclear weapons as Ukrainian forces liberate towns and villages captured by Russian forces.

Yet in Liverpool at Labour’s annual conference last month, there was a sense of silver lining in the air. Truss’s unnervingly terrible approach to the economy is creating an ideological divide with the Labour Party so clear and sharp it can be seen from outer space. Gone is the loose rhetoric from Boris Johnson about levelling up. Instead we have a
new regime aggressively trying to out-Thatcher Thatcher.

Truss and Kwarteng have made a bad situation much, much worse in the name of the quack economic ideology to which they are both subscribed

The energy crisis – a financial crisis on an even bigger scale than the impact of covid or the global banking crisis of 2008 – has demanded a huge universal programme of support with energy bills. Instead of trying to recoup some of that spending through taxing the windfall gains of the North Sea oil producers, who are currently raking it in, the new chancellor Kwasi Kwarteng has announced a vastly expensive set of tax cuts on a scale not seen since the early 1970s. It redistributes resources from the worst-off to the very wealthiest in society, leaving those in their teens and 20s to pay off the resulting debt for the rest of their working lives.

The monetary policy levers the Bank of England needs to pull will make this even worse – the markets are now betting on interest rates to reach 6% next year – and risk plunging some homeowners into negative equity. The fall in the value of sterling against other countries will push up the cost of imports significantly, further fuelling inflation. Truss and Kwarteng have made a bad situation much, much worse in the name of the quack economic ideology to which they are both subscribed.

This creates a political opportunity for Labour, but also a trap. The financial situation looks set to get much worse over the next couple of years, thanks to global energy shocks, the impact of Brexit on imports and productivity, and Truss and Kwarteng’s apparent determination to do all they can to tank the economy further. Voters will – rightly – blame the government. That will push political momentum towards Labour.

But whoever wins the next general election will inherit the worst economic legacy in decades: an economy crippled by debt-funded tax cuts with none of the long-term structural issues – poor productivity growth and an out-of-control housing market – sorted. Labour will still somehow have to paint a picture of how life will be different if they are in charge. “We’re not as dire as the other lot,” may be enough to get them over the line. But a decisive win, indicative of a government that will be around for more than one term, requires more.

Labour needs what is often termed a “retail offer”: a few key policies that give people a sense of what they’re voting for. Think the 2024 version of the 1997 pledge card promising smaller class sizes and shorter NHS waiting lists. But it is harder to sound credible about pledging to expand free childcare, or build a national care service, for example, if the public finances have been wrecked by your predecessors.

Labour announced some bold and radical ideas at its conference – a commitment to making Britain self-sufficient in electricity by 2030, a promise to build 400,000 new social homes over a decade, a plan to train more doctors and nurses on the proceeds of reintroducing the top 45% rate of tax. But they’re too wedded to talking about the big numbers, with not enough detailed focus on what this actually means for people in their day-to-day lives.

Next to Truss and Kwarteng, Keir Starmer and his shadow chancellor Rachel Reeves look like political giants. But Labour has a long way to go in honing its message to voters.

Hilary Mantel
I will remember September 2022 as the month we lost two great women: not just the Queen, but also the great chronicler of monarchy past and one of my favourite-ever writers, Hilary Mantel. Mantel died at just 70, a devastating loss to literature.

A trilogy charting the rise and fall of Thomas Cromwell during the reign of Henry VIII doesn’t sound like the makings of one of the greatest literary triumphs in modern fiction. But I still remember how blown away I was after reading Wolf Hall for the first time. I don’t think I’ve ever read a more exquisitely crafted novel.

Mantel was also an astute observer of monarchy present. In her decade-old essay Royal Bodies, she ponders how it feels to be the person on the other side of the bowed heads and curtsies, the pomp and circumstance. It wasn’t a vantage point I’d given much consideration to before, but Mantel illustrated that a constitutional monarchy is problematic not just because of the birthright principle it smuggles into democracy, but because of its impact on the people who constitute it. She famously predicted Prince George would never be king, and I suspect she’s right.

Sonia Sodha is chief leader writer at the Observer and a Guardian/Observer columnist. She also presents Analysis documentaries for Radio 4