Liz Truss’ economic plans are ruinous nonsense that has nothing to do with reality.Will Hutton

L.As a minister under three prime ministers, iz Truss has observed the dynamics of today’s Tories and the ecosystem of media and think tanks that underpin them. What drives the party is a belief in the justice of causes like the Brexit-right Taliban. To win, she was determined to become its uncompromising representative, but her determination didn’t stop there. The only way to maintain leadership is to rule from the far right. It ends in failure.

The epicenter will be the economy. Her undisputed goal is her 2.5% growth. The consensus stops there. All the mechanisms for achieving growth are drawn from unevidenced but prejudiced right-wing playbooks. It embraces the belief that it is deeply anti-European, obsessed with tax cuts, obscure regulations hinder business, and above all a weak political class. , a combination of shadow government and subservience to technocrats make Britain quasi-socialist despite 12 years of Tory government. The Truss are rebels who carry Thatcher’s flame to bring rights to the world.

Consider six points for her growth. It necessarily begins with a promise to cut taxes NOW. She “frees businesses from onerous regulations” reinforced by “supply-side reforms.” She plans to “repeate all her EU-derived legislation by 2023” and “work with industry leaders to regulate UK businesses and consumers”. She “creates a low-tax, low-regulation investment zone.” And she will review the mandate of the Bank of England to better manage inflation. That’s devastating nonsense.

We are not allowed to peer into reality. Realization that in a decade plagued by pandemics, climate change, fragile energy markets and threats to food supplies, it is the resilience of the nation’s energy, public health, water and agricultural systems that underpin business and civil society. there is no. The state must play a leading role in this. There is no understanding that today’s economy is built on the ‘intangibles’ of knowledge, intellectual property and digitalization, on which sensible regulation is the foundation rather than lack of regulation.

The role of urban regions as engines of growth, and the key institutions and processes that support large cities, articulated in the government’s own Upskilling White Paper last December, are again led by states. In a time of stagnation, no one agrees on the role of trade as an engine of growth. The world’s second-largest exporter of services, the UK is built on the intangibles behind sectors as diverse as finance and creative industries, and is shut out of the country’s largest European market. It’s a growth plan built on sand.

Therefore, canceling the remaining national insurance contribution hikes (to pay to expand public health and social care capacity, recall) and halting the planned corporate tax hike will boost growth. A four-year freeze on personal benefits will be maintained at the same time. Are the trusses quiet?

Again, viewing evidence is not permitted. The successive Tory Prime Minister (an absurd truss narrative quasi-socialist) has cut the UK corporate tax rate from his 26% in 2010 to his 19% today. Private sector investment remained at the bottom of his G7. The main driver of investment is not the corporate tax rate, but the belief that the investment will be recouped, and there is little to no long-term confidence in a strategy-free UK under the control of a right-wing ideology cut off from the main markets. . The truss gives up the necessary tax revenue and achieves nothing.

Few UK PLC directors have a good word privately about Brexit and a possible trade war over the Northern Ireland Protocol. This view highlights the extraordinary entrepreneurial revolution around the top 100 universities, from the University of Oxford, which is very different from the universities that Britain’s Brexit supporters joined in the 1980s, to centers of innovation such as the University of Northumbria. Shared by tens of thousands of startups launching startups within.

Tory organizations are ignorant of this corporate revolution. They voted for Labor, the Liberal Democrats and the Greens, hated Brexit, worried that Britain would be kicked out of the EU’s Horizon Programme, praised universities, called for action on climate change, and I can’t stand the Conservative Party, its media, and capricious top-notch commentators.

What is holding them back is the lack of a UK ecosystem to foster growing companies. This is another flaw that the state needs to rectify. It’s reinforced by putting a Union Jack on regulation and trying to deviate from the regulatory standards that are the biggest market. A classic example is the government’s insistence on the chemical industry that it should give up her £500 million a year membership in the EU chemicals regulatory system. This will enable exports to her 27 countries in the EU, tying it into a £2 billion UK-only programme. It’s about trading in one country, not the highest safety standards. In the 2020s, regulation is the way to ensure product standards and gain market access. UK badge regulation is an expensive means of stifling businesses.

Supply-side reform? For the truss, they remove the vestiges of job protection in the OECD’s least regulated labor market and allow fracking (because British geology means the risk of damage and subsidence is very high). can’t), seems to consist of discarding incentives. go green. Low tax/low regulation zone? Rather than creating new economic activity, they displace economic activity, as abundant evidence shows.

Want Tees Valley or the West Midlands to be international showcases for work-related injuries, tax evasion, dangerous and shoddy commodities? Never mind blaming 13% inflation on the Bank of England That’s it. Had he acted 6-9 months ago (I recall hardly anyone arguing then) inflation he could have peaked at 12.5%.

Unless the truss has the audacity to raise its inflation target to 4% for a period of time, this is populist bullshit. It’s not a rehearsal of weary Thatcherian nostrum, it’s genuine outside-the-box thinking.

All the while, UK households face utility bills of up to £5,000 next year, with tens of millions unable to pay. This is another reality that the Truss camp ignores. Truss is adept at telling the audience what they want to hear. It is not a compass for governance.

Will Hutton is a columnist for The Observer

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *