Gavin Williamson once said that Russia should ‘shut up’ and ‘go away’. I must confess to feeling a similar sentiment whenever Liz Truss tries to re-enter public life.
Yesterday, our former Prime Minister and future pub quiz question answer made a speech to the Institute for Government. One year on from her premiership, Truss sought to defend her economic approach and the measures taken in her so-called Mini-Budget – where Kwasi Kwarteng announced the biggest fiscal loosening since the Barber Boom, and which she later largely U-turned on as Number 10 burnt around her.
Perhaps surprisingly, Truss made for interesting listening. She acknowledged that her plans were somewhat rushed, that ‘communication wasn’t as good as it could have been’ and that she was ‘blindsided’ by the meltdown in pension funds caused by liability-driven investments (LDIs). But the tone was very much one of je ne regrette rien.
Truss said she was incapable of acting differently. Any mistakes were because of ‘basically the way [she is] and [her] character’. As she urged Rishi Sunak to set a manifesto of tax breaks, benefit cuts, and scrapping Net Zero, Truss blamed her record on the resistance of a left-wing ‘political economic establishment’ and its attendant ‘institutional bureaucracy’, a confused media class, and cowardly Tory MPs.
Many a CapX reader will agree with a lot of what she said. When asked about Mark Carney’s snide suggestion that she had turned Britain into ‘Argentina-on-the-Channel’, she pointed out the ex-Governor of the Bank England was part of a ’25-year economic consensus that had let to low growth across the western world’.
She was right to point out interest rates had been ‘artificially low’ for too long and, political drama notwithstanding, would have risen whatever her policies were. And she was on the money in saying that the civil service has many good people, but they’re keener on Net Zero, diversity lanyards, and working from home than they are shipping criminals to Rwanda.
The central element of Truss’ analysis is and always has been sound: that growth in this country has been too low for too long, and that we cannot tackle the challenges of demography or balancing the books until we get it up. Whatever her mistakes, she is at least justified in claiming that she has put this issue onto the agenda. That, post-Truss, Labour now has an ambition to make us the fastest growing country in the G7, is something to be cheered.
But if the ex-PM wants to lay claim to being the Joan of Arc of higher growth rates, she is going to have to take responsibility for the rest of what happened in her premiership. This is not something she is keen on doing.
Truss believes her £45bn package of tax cuts would have increased growth. Most independent forecasts disagreed, for the simple reason they were neither big enough or well-targeted enough to deliver anything like the 2.5% rate she was aiming for. Never fear! Truss just claims these organisations were biased against her, and instead points to analysis from the Centre for Economics and Business Research, because they’re one of the few that agreed with her.
Truss reminds me of that meme of Principal Skinner. Was it Trussonomics that was inappropriate to the challenges of last autumn? No, it is that everyone else who was wrong!
Such arrogance leads her into a wilful rewriting of history. She claims public spending would be £35bn lower if her plans had been followed. That is despite her unwillingness to reopen the last spending review, her unwillingness to countenance scrapping the triple lock, and her decision to fund Boris Johnson’s social care plan without a rise in National Insurance.
Truss appears unable to distinguish between borrowing for programmes of emergency spending – like Rishi Sunak’s furlough scheme and her own energy price guarantee – and borrowing for tax cuts. Such is her commitment to the Laffer Curve that she genuinely can’t seem to comprehend why the markets might have a problem with ratcheting up borrowing at a time of rising interest rates.
She can claim that nobody warned her about the LDIs. That scandal was yet another reason why Andrew Bailey should have been sacked a long time ago. But her Chancellor also had a PHD in Economic History. The two of them could surely have seen that a period of rapidly rising interest rates and international political turmoil is not the best moment for maxing out the Government’s credit card.
Instead, they blotted out any contrary voices or common sense and ploughed on regardless. The only economics I’ve done is a term-long ‘Britain in the Seventies’ course at university. Yet I still somehow foresaw the consequences of Trussonomics. She should also have been able to predict that Tory MPs might be sceptical about her agenda, given that less than a third of them backed her in the final ballot.
The most tragic thing about Truss going forwards will not be the vague sense of national embarrassment onlookers will feel every time she is spotted at the Cenotaph or Royal funerals for the next half a century. It’s that there was enough truth in her diagnosis – growth is too low, taxes are too high, and the Conservatives are too comfortable with decline – that she will continue to be a prophetess for some MPs and members.
The point of this speech was not only to defend her record, but to fire the starting pistol on the Ranil Jayawardena leadership campaign. Truss may have failed, but her disciples are organising. Their ambition is to win the argument in opposition, install a leader of Truss’ ilk, and hope to implement their agenda in some future government.
A realistic prospect? Yes, actually. If enough can organise – such as through the new backbench Conservative Growth Group – to ensure they have one of their candidates in the final two, the case of Truss vs Sunak proves that Tory members might prefer sweet nothings about a smaller state than boring realism about the unfortunate turgidity of the public finances.
Truss will remain in public life in some capacity, reinvented as the Deputy Economics Editor at GB News or the Duracell Bunny’s answer to Spengler. In such a role she can retain her hold on a particular part of the Tory imagination. Her ideas may have been found wanting. Her premiership might have been a disaster. But for a leader so often accused of Thatcherite cosplay, Truss might well go down as the Conservatives’ most consequential leader so far this century.
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