Liz Truss has said this week: “Things
would be better if I was still in charge” – a comment which has elicited
ridicule and chagrin with almost equal measure.
I’m not convinced that most of the critics of what’s been pejoratively labelled ‘Trussonomics’ are qualified enough to know better, especially those who looked to reject the whole thing; but I’m equally unconvinced that Liz Truss ever had a proper handle on things either. And although it’s a personal thing, I don’t find her very likeable, which probably makes it harder to warm to her intentions, and give her some benefit of doubt.
But I'll try, because theoretically Trussonomics needn't have been quite as bad as many people made out – it’s a combination of one main fatal flaw in the idea and the practical elements which made it a disaster. The framework of Truss’s proposals are the very thing the UK so badly needs – especially tax cuts, supply-side reforms, deregulation, and stimulating economic growth by removing state-imposed impediments and incentivising investment. Because what Britain needs is long-term economic growth – and that will only happen with deregulation, decreased state spending, increased private sector investment and job creation.
Truss wanted to turn Britain into a much-needed thriving economy, with increased productivity, and as a place where outsiders were willing to invest. Critics who favour free markets said the big problem was the execution, not the idea. But that’s not quite right. The execution was indeed terrible – that’s plain for all to see; it culminated in panic, financial turmoil and lost confidence in the markets, necessitating a quick government u-turn. But the idea was fundamentally flawed too, because it was based on increasing borrowing with a flaky strategy for fiscal discipline. Combined with the high levels of public debt and the unique inflationary pressures around that time, the idea was defective and poorly timed, which made the execution inevitably disastrous.
The upshot is, I think Truss deserves most of her criticism – but it should be borne in mind that many of the fundamental principles of Trussonomics are still exactly what the country badly needs – especially lower taxes, a less burdensome state, supply-side reforms, mass deregulation, increased private sector investment and job creation. It’s just that I honestly can’t think of any politicians in any of the current political parties in whom I’d have enough confidence that they have the combined competence and courage to do what’s required to turn this economy around.
