Rarely has a new prime minister faced such a fight to save Britain from the jaws of collapse. Liz Truss has to deal with what is likely to be the worst recession in the OECD, as well as the spectacular implosion of the welfare-capitalist model that has prevailed for the past 30 years. From day one, she will have to deal with a chain of disasters – the falling pound, evaporating economic confidence, panic over energy difficulties and a bad winter for the NHS.
The deadline has been lifted from obscurity. After a respectable and unremarkable eight-year stint serving in various cabinets, she remains largely unknown to voters. They may give her the benefit of the doubt, and some conservatives have even suggested that she may benefit from lowered expectations.
But that’s likely wishful thinking. The only hope for the Conservative Party – and the country – is that Truss can quickly show that she is not just a competent damage controler, but a game-changing leader. The crisis this winter is likely to be so severe that the new prime minister has at most two months before unforgiving voters judge whether she can be a second Iron Lady or is only fit for scrap.
Indeed, the many disasters facing Britain look increasingly like a turning point rather than a bump in the road. Many predict that the recession could last well into 2025. The country’s productivity decline looks set to last even longer. The danger is surely that Britain is on the way to becoming an emerging market economy. It’s already starting to feel like it, with power outages and a declining health service. Perhaps we are only a few political decisions away from allowing this deep psychological sense of decline to spill over into real economic disintegration.
Just as America is founded on a spiritual belief in freedom, the British myth is underpinned by a belief in our semi-miraculous power to “mess up”. This makes the prospect of the country’s nervous collapse almost unthinkable. But it’s time to take this prospect seriously: if Truss can’t really stand up to the left and challenge the groupthink that got us to this point, our country could end up with a middle income closer to that of Trinidad and Tobago than Norway and foreign investment levels more comparable to Chile than the Netherlands.
Truss’ to-do list is unenviable. It must quickly put together an effective emergency package so people can pay their gas and electricity bills this winter. She is set to unite a fractured Conservative party after securing a much stronger than expected victory against Rishi Sunak. It should bring down NHS waiting lists. But more importantly, if it announces a massive energy bailout in the coming days as expected, it should also be leveled with the country getting enough.
We cannot go from crisis to crisis, our economic model unreformed and taxpayers expected to pay the price of the consequences. A model that has seen politicians neglect energy resilience in the closed belief that “diversity of supply” was sufficient. A model that has trapped the country in a vicious circle of stagnation and tax increases. A model that has long seemed unsustainable, but now seems incapable of producing economic growth.
Encouragingly, Truss seems to understand the scale of the problem. Her disdain for the UK’s tax-and-spend dependency, in particular, is clear. However, it remains to be seen how radical her opposition to what she calls “treasury orthodoxy” is. If she chooses the highly intellectual Kwasi Kwarteng as her chancellor, she might have a chance to rid Whitehall of the simplistic theories and junk economics that have failed the country for so many decades.
But Truss and her economic team will also have to think about heretical ideas. Just like the role that hyperglobalization has played in leading us to this energy market nightmare. Or the importance of tax cuts and deregulation that go hand in hand with aggressive government investment in research and development if we are to compete with economies such as China, which have no qualms about doing the same.
It will also need to communicate better why Britain is really in trouble and what needs to be done about it. She will have to counter the charge that these crises are the inevitable result of Brexit or represent the last gasp of chaotic Tory rule. It must find a way to show that their roots go much deeper than that – stretching back to the Blair and Brown governments. It must continue to work tirelessly to combat the popular obsession with leftist metrics like equality and distribution, to the detriment of prosperity and growth.
In short, she will have to rid Britain of its culture of entitlement and victimhood, and reverse the spread of the Left’s warped morality and economic illiteracy. She will have to stick to her belief that the tax cuts are still worth making, even if they happen to disproportionately benefit businesses or wealthier groups. If she tries to solve the country’s labor shortage by putting the millions in benefits back to work, she will have to face the charge that the Evil Party is back.
She will have to stand firm against radical environmentalists, who will denounce her sensible plan to remove green taxes from energy bills as climate vandalism. It will have to dare to state the obvious – that net zero will almost certainly be financially devastating and that it needs to be fundamentally reconsidered in light of current circumstances – and ignore critics who attack basic pragmatism as climate-skepticism. And she will have to face the charge of elitism if she is right to implement policies aimed at preventing the catastrophic shrinking of the country’s middle class. It is time to confront, head on, the annihilation of this ravaged group’s core values—freedom, excellence, and self-reliance.
The country demands that our new prime minister display almost absurd levels of bravery. The liberal left may already be suffering from Truss derangement syndrome – but that’s nothing compared to the vengeance and hatred that will be unleashed if it really catches the nettle. She must be ready to face them. If not, Britain faces a grim new chapter of outright mediocrity and eventual decline.
