What happened to Liz Truss?
A special instalment this weekend with my final thoughts about my old boss Liz Truss. Next week, normal service will resume with thoughts on various subjects, covering The Great Woman Theory of Vote Leave, Annie Ernaux, Tosca, and T.S. Eliot.
Writing elsewhere: I wrote for CapX that We Can’t Afford The State We Want, and for The Critic about London’s malaise. I also have an article about my time as a Young Fogey in this month’s Oldie, available at all good news stands.
I worked for Liz about a decade ago. I believe she was right about Britain—we won’t solve our problems until we solve sluggish economic growth, and that cannot be taken for granted as many seem to do. Growth is affected by policy and in prioritising other things we have neglected what is most important in economic policy: having the money to pay for the things we want. Growth is the foundation.
So I was cautiously pleased to see Liz get to the top. I wrote with wide-eyed enthusiasm about a possible new mandate for the Bank of England. What Truss offered was the idea of a break with consensus.
Truss’ critics from the FT to the Tory party are assuming, consciously or not, that the current situation needs to be managed rather than changed. This is the mindset Truss is fighting, more so than any particular policy. She’s been fighting it for years. Her monetary, fiscal and regulatory ideas are all about changing the rate of growth, not accepting it. She seems now to be our best hope of a political leader who really wants to try something new, to take modern ideas and apply them to the problems of the state. That mindset, more than her monetarist beliefs or garish outfits, is how she really resembles Margaret Thatcher. Let us hope she succeeds.
Whatever your politics—and many sensible, intelligent people simply find Liz’s politics ghastly—it should be obvious that the current rate of growth is an albatross around our necks. GDP per capita is about the same as it was in 2008. The average rate of GDP growth halved after that recession. These problems won’t go away with Liz.
But she screwed up. I don’t mean with the bond markets—she got it all wrong. There were more inexplicable decisions in her two months than some Prime Ministers make in a year. And I don’t mean inexplicable from the point of view of common sense. I don’t quite recognise who Liz was while she was Prime Minister. Now, I didn’t know Liz incredibly well. But I spent more than enough time listening to her talk on every subject. We shared an office, I trailed behind her along the corridors of Westminster, and I was frequently locked in a train with her. And I found her recent behaviour slightly baffling.
Liz and I were not always very compatible colleagues, and the thought crossed my mind that when this day came I would enjoy it. Alas. There is something more than a little tragic about what happened. The woman who called her father to prove me wrong about a point of grammar (they were both wrong, if you’re interested), who gave me a horoscope mug and detailed my faults with it as a leaving present, got her comeuppance and I wish she hadn’t. This must be awful to live through. She was a bit of a pain—especially on the day she covered herself in paint before a television interview and sent me into the bowels of Westminster to find white spirit—but she wasn’t in any way the nasty, lunatic person some people think. Earnestness in politics is often interpreted as weird, disingenuous, or conspiratorial, a point of view that tells us more about the media and its readers than the people under discussion, I think.
Yes, Liz has aways had a haywire instinct. But she’s not stupid. She’s just not. Not getting OBR forecasts was bloody daft. And out of character. She once said to me that she liked goading people but hated conflict. When her advisors told her she was being crazy, she always stopped. But simply refusing any sort of forecast, ignoring sympathetic economists’ warnings about what would go wrong, and bouncing around the airwaves with an uncertain message about future tax policy… if I had wanted to paint a crude and exaggerated picture of Liz as a joke I might have come up with that on a bad day. In reality, it was bizarre.
She enjoyed talking like a somewhat doctrinaire libertarian. I heard her joke about Douglas Carswell not being entirely sound. Very much a joke, but a telling one. Old Doug isn’t exactly a Blairite. Indeed, I used to be fairly far gone in that direction myself (In those days, I was reading Ron Paul’s The Case for Gold on the train and von Mises’s Human Action in the early mornings—oh! good times) and she once told a colleague she thought I might be a wet, either a bad joke or a sign that she really was that right wing. (Let me assure you, she simply didn’t pay very much attention to me. And yes, her jokes were like that.)
But when you look at her policies, she’s not as ideological as she sounds. She’s pragmatic with classically liberal goals. And yet, she instituted a price cap and wanted to put over something like £100bn in borrowing without a plan to pay for it. That, dear friends, is very far from the naughty libertarian plan the Guardian believe was cooked up by a band of swivel-eyed renegades who believe in the gold standard, Ayn Rand, and an unregulated pharmaceutical market. Indeed, if journalists were paying any attention at all they would have seen that, as I wrote for CapX, the mini-budget was very, very un-libertarian indeed.
Calling Liz a libertarian as if that explains what happened is like diagnosing Hamlet with clinical depression as an explanation of Shakespeare’s play. You might have a point but there’s just a little bit more going on.
The woman I once heard propose installing advertising space on the Palace of Westminster to help pay down the debt (it was a joke…), who issued a style sheet banning the word “stimulus” as “too Keynesian”, who thinks Nigel Lawson is the best Chancellor we ever had, was borrowing money like a drunken gambler. And for what? A price cap! A bloody price cap. Some libertarian! Some IEA stooge! Some Thatcherite mimic! Imagine Gordon Brown abolishing Capital Gains Tax and you’ll get a sense of just how weird that price cap was. Every child who has read Henry Hazlitt knows that price caps are the worst of bad things. And her inspiration, her guiding star? Well, Lawson was that rarest of things: a Chancellor who ran a surplus. (Yes, yes, so did Gordon Brown, but only when he stuck to Ken Clarke’s spending plans.) Where be Lawson’s jibes now? Where his ideals?
At the time I worked for her, I thought Liz would make a bad Prime Minister. I said as much to the head of the TPA once: he was expecting me to be a little more enthusiastic about the idea and the conversation didn’t go much further. During the leadership election, I repeated my view that Liz should have been Chancellor.
Yet being Prime Minister is no longer the best job for someone like Liz. It requires too much time spent on PR. Speeches are not Liz’s forte. She might enjoy pretending to be Elizabeth I (and why not? She was always a good patriot). But we don’t lack communicators or visionaries. We need a new reformer to make the roaring twenties a reality.
That’s why, if Liz Truss becomes Prime Minister, it will have been a missed opportunity. She’d be much better in the quiet office of Chancellor. That would give her the scope to make Lawsonian reforms. Then she’d really live up to her supporters’ expectations. A good dose of Liz as Chancellor is just what the country, and the Tory party, needs. Pairing her with a leader like Kemi Baddenoch would be a powerful combination.
So channel your inner Lawson, Liz. Britain needs you!
So much of the criticism of Liz has been that she is “weird”, can’t give a decent interview, blinks a lot, etc. I dislike the fact that someone who blinks a lot and lacks presentation skills is subject to that much comment about it. It’s worth asking—how different would things have been if Liz was more “normal”?
Once it was a choice between Sunak’s tax rises and Liz, I was for Liz. Who wouldn’t have been? It’s right to own up to your mistakes. She was the wrong person for the job. But Liz was right. That fact that she fluffed up the delivery doesn’t change that. Here’s what I wrote about why I believe in her ideas.
When I knew her, Liz wanted a country where more teenagers get a better (or, all too often, a decent) maths education; a country where more mothers could go to work without having to pay more for their childcare than their mortgage; a country that could develop its human capital for the future. How many times did I listen to her bemoan the way the system left young people without a proper education? How often did I hear her lament mine or someone else’s lack of outward ambition as an example of Britain’s malaise? The world doesn’t always hear Liz but she’s right.
It’s still true. Who else will make these issues their priority now? A balanced budget was what Liz was missing. Not even balanced, just one that kept the debt to GDP ratio on a slight and steady decline. But a balanced budget is necessary but not sufficient. It isn’t going to solve our problems in productivity, housing, low wages, human capital, and all the rest of it.
And so the Lawsonian spirit has left British politics again. Make of that what you will, but I believe that Chancellors who can improve the rate of economic growth, extend to women the tax allowances men had enjoyed since the Napoleonic wars, abolish a tax every year, and balance the budget at the same time are to be praised and hoped for. I only wish Liz had followed in his footsteps and I still don’t understand why she didn’t—what happened to Liz Truss?
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