The recent upheaval in government that saw an un-costed mini-budget foisted on the country has exposed the limitations of democracy in the UK.

Leaving aside for a moment the lack of an electoral mandate for the measures, never approved by the British people, enacted by a leader elected by 81,000 Tory members, the reaction of the markets effectively led to the reversal of the measures.

The un-costed package lacked any evidential back-up to suggest it would work.

The much talked-of analysis of the Office for Budget Responsibility was not there. Indeed, it seems the Bank of England was hardly informed as to what was going on.

The result was government borrowing shot up, forcing a Bank of England intervention to reassure the markets.

The Alice in Wonderland economics of the government foresaw all the measures being proposed, such as reversing the National Insurance charge to fund health and social care, being funded by borrowing.

Not anymore, said the markets. The whole package of cutting taxes for the rich, whilst penalising everyone else, was a step too far.

The mini-budget was scrapped, with a whole new era of austerity now beckoning due to these reckless actions. The Prime Minister (PM) has resigned.

Market confidence, though, has been eroding in the UK for some time. The mini-budget was probably just the final straw.

Investors like stability, something that used to be one of the attractions of the UK. Enter Brexit and Boris Johnson.

A PM who signed agreements, then failed to abide by them. A PM who illegally prorogued parliament. A leader who got rid of experienced MPs who wouldn’t back his Brexit line.

An individual who said ‘do as I say, not as I do’ in relation to partying during Covid.

Then, along came Liz Truss, a logical extension in many ways of the mayhem of the Johnson years.

The Tory government seems now to have lost the confidence of the markets and the people. It is time for a general election.

Whoever forms the next government would be wise to acknowledge that we live in an interconnected globalised world. There are limitations on what can and can’t be done according to an international consensus. The markets are an important part of this equation and need to be heeded.

  • Paul Donovan is a Redbridge Labour councillor for Wanstead village and blogger. See paulfdonovan.blogspot.com