Liz Truss’ radical economy can be a gift for work
Truss was the figure announcing a leadership change in order to clinch the leadership of his party against his main rival, former Chancellor of the Exchequer Rishi Sunak. She trashed the Conservatives’ record of low growth, low investment and low productivity. Starmer himself couldn’t have said it better. And yesterday its new chancellor, Kwasi Kwarteng, unveiled a radical shift in economic policy in his first mini-budget. The message to the country is that the Conservatives are under new leadership – and weary voters are urged to give them a fresh look.
Decades ago, Margaret Thatcher taught Tory chancellors to treat public finances as if they were a household budget that needed to be balanced. Yesterday’s mini-budget upended that house wisdom. In pursuit of an ambitious 2.5% growth target, Truss has banked on a massive borrowing-turbocharged tax cut program and a libertarian dim-sum menu of deregulation. Treasury orthodoxy has disappeared.
The markets reacted nervously. The pound fell to its lowest level in 37 years, falling almost 3.35% against the dollar, but also depreciating against the struggling euro. The FTSE 100 also saw the value of major stocks fall. Investors fear government borrowing could soar as the interest rate on Britain’s debt also rises – from 1.8% at the start of Truss’ leadership campaign to 4% today.
The prime minister, however, is following a well-trodden path in breaking with her predecessors, despite having served in all three previous Conservative administrations. Boris Johnson, let’s remember, campaigned against “conservative austerity” and the “bad Brexit deal” negotiated by his predecessor, Theresa May. May in turn blamed David Cameron for policies that favored hypermobile and wealthy ‘citizens of nowhere’ over ‘roughly managerial’ Britons.
Now it’s Truss’ turn to dig his own furrow. Protean reinvention has been a winning formula for largely successful conservative elections, but will its radicalism connect with voters in anxious times? The emotional reaction to the death of the UK‘s longest-reigning monarch suggests the country may not be relishing another mad dash.
It is a truism that governments lose elections rather than oppositions win them. If Truss’ gamble on skyrocketing growth fails to live up to the expectations it raised or, worse, ends in a crisis of economic confidence, there’s a good chance she’ll lose the election. Electoral arithmetic, however, makes it difficult for Labor to secure an outright majority. Indeed, calls for a change in the voting system will be heard in Liverpool. Yet in the Western world, electorates have never been so unstable. The Labor Party has everything to play for. Is his boss up to it?
Starmer is inspired by Harold Wilson, a four-time Labor election winner in the 1960s and 1970s, who is now the subject of a new biography by a member of his Shadow Cabinet team. Like Wilson, Starmer is not a natural politician but a hard-working meritocrat from another background who had to learn on the job. Starmer may lack obvious charisma, but so did Wilson at the start – he sweated bricks to become the most exciting politician of his time.
The Labor leader has already done a lot to shape his party. He defeated the unpopular left-wing faction that ruled the party before him, put the Brexit issue to bed, apologized for an unedifying row over anti-Semitism and ditched the ultra-radical policies that frighten floating voters .
Working-class patriots left Labor en masse in the last election because they believed its leaders were siding with every country except Britain; Starmer – who was knighted in 2014 – now drapes his TV appearances in the Union Flag. To the dismay of Republican intellectuals, the national anthem, God Save the King, will also resound at the party convention. The party is back on center field. He has to keep it there.
Starmer can also call on a talented team from the shadow cabinet. The heavyweights of the last Labor government are back from political exile, while young stars are displaying an appetite for power that their leftist predecessors have sorely lacked. Its shadow chancellor Rachel Reeves, a former Bank of England economist, gave an authoritative performance in the House of Commons last week.
The tide is expected to be in the direction of Labor – this time for a change of party, not Conservative leader.
Truss has an unenviable task. She must somehow hold together a fragile coalition of “Singaporeans” – conservatives who favor a small state and lower taxes – with so-called “Red Wallers” outside well-to-do counties who want to invest in public services of high quality. After two popular splurges in state spending to mitigate the effects of the pandemic and energy crisis, the premier may find her brand of libertarianism going against the grain.
And the concerns that brought Labor to power in 1997 are once again front and center. A majority of voters want government to provide security in a volatile and uncertain world, while satisfying the aspirations of individuals and families to better themselves. Falling real wages, failing public services and falling homeownership rates are immediate threats.
But the leader of the opposition has yet to articulate a compelling political narrative. Policies are not a substitute. On the brink of power, neither Thatcher nor Tony Blair, the last two significant leaders of change in the UK, produced a detailed manifesto. Nevertheless, everyone knew what he stood for.
At his party conference, and in the year and a half that follows before a likely election season, Keir Starmer’s test convincingly completes the phrase “Labour represents…” without resorting to old saws to help the underdog. . A lot has changed in Britain. How has Labor evolved to meet this challenge? Sir Keir has to answer that.
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Martin Ivens is the editor of the Times Literary Supplement. Previously, he was editor of the Sunday Times of London and its main political commentator.
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