Just days after Liz Truss announced her resignation outside No 10 under a cloud of crisis, she reportedly told allies: “I lost a battle, but I haven’t lost the war”. In the months since, the former prime minister has sought to revive the principles that informed her ill-fated fiscal project with relative regularity, including in a speech to the US-based Heritage Foundation in April.
But yesterday, Trussonomics came home for the launch of the “Growth Commission”, a new collective of economists and wonks who share Truss’ vision for an unchained free market future.
Nominally, Truss is the “convenor” of the Commission, with the lucky economists in question assembled under the former PM’s direction. Nonetheless, it was fundamentally clear that this new grouping was stepping outwith the bounds of doomed Liz Truss revival project. Indeed, the former PM’s name did not feature on any of the Growth Commission’s literature — and the launch of the new free market vehicle cannily skipped over any hagiographic retelling of the lows of Trussite interregnum.
Rather, Truss was sat in the audience for the launch of the Growth Commission’s first report as a present, but conspicuously not involved, patron. This was the PM of 49 days doing her best impression of an elder statesman. But more broadly — it is a signal that the advocates of Trussonomics are looking self-confidently to the future, embracing strategy at the expense of personality. Truss herself told reporters after the launch: “It’s a long game”.
Still, the former PM’s influence is keenly felt in the Commission. Julian Jessop, that high priest of Trussonomics and Institute of Economic Affairs fellow, is among the assembled free marketeers. His presence on the commission, having been so prominent in Truss’ No 10 economic inner circle, arguably underlines how small free-market circles are in Britain. That Truss has reached for a cluster of American economists, mainly connected with the libertarian Mercatus Center, is a further case in point. (The Commission’s transatlantic tilt is no doubt a consequence of Truss’ vigorous Jett-setting in recent months).
With the Growth Commission, therefore, Trussonomics retreats to its intellectual homestead: the realm of secretive policy institutes and think tanks. The flickering free market flame needs nurturing, Truss calculates; in this way, the Commission will operate as a chrysalis chamber — wherein the messaging of British libertarianism will be protected, honed and eventually propelled back into mainstream thought.
In terms of its messaging, the Growth Commission is dedicated to spreading the belief Truss majored on as prime minister: the importance of growing the economy. The group’s inaugural 33-page report, titled “The Growth Challenge”, is itself a statement of intent. Addressing the launch yesterday, Tyler Cowen, chairman of the Mercatus Center, performed his best Keir Starmer impression as he told the audience that living standards in Poland could exceed Britain in a decade.
“We actually live in a world where it is imaginable that in less than 10 years living standards in Poland have exceeded living standards in Britain”, he relayed. The report itself warns that the UK “is one of the few international economies where GDP per capita is actually falling”.
A shadow OBR
As for the Growth Commission’s future plans, the grouping’s overarching aim is to act as a kind of shadow to “orthodox” institutions, curating economic models based on fundamentally antagonistic ideological assumptions.
The grouping, therefore, now intends to design critically different models to those currently deployed by the Treasury, the Office for Budget Responsibility (OBR) and International Monetary Fund (IMF) — including analysing the effect of certain policies 5, 10 and 20 years down the line. (Of course, it is difficult to disguise that the further the Commission set its sights on modelling, the less reliable they will necessarily become — and the more commissioners will be forced to retreat into ideological assumptions).
Launched in a building directly opposite the Treasury, this element of the Commission’s self-assumed remit is especially foreboding.
Of course, the argument that the UK’s economic modelling is a major constraint on long-term growth is a central tenet of the Trussite playbook. Truss’ solution to this during her short tenure as prime minister was to ignore the doomsaying OBR by opting for a “mini”, rather than a literal budget — pursuing a stubborn separate path. No time was afforded by Truss to an independent assessment of her proposals’ economic impacts — it succeeded merely in spooking the markets.
Now Truss will not sidestep the OBR, but compete with it as the Growth Commission looks to score future fiscal plans through the ideological prism of Trussonomics. The intention is to operate as a ballast in an economic landscape so dominated by “Treasury orthodoxy” — castigated by Trussites as intellectually narrow and economically self-destructive.
Sunak and ‘Treasury Orthodoxy’
Politically, the Growth Commission project will be seen as a challenge to Rishi Sunak and his mode of politics.
Since taking over the reins of No 10 from Liz Truss in October, Conservative MPs have consistently accused the prime minister of presiding over a high-tax, low-growth economy. The Growth Commission could now serve as a lightning rod for such discontent. Indeed, in attendance at the group’s launch alongside Truss were a slew of Sunaksceptic Conservatives including former Brexit negotiator Lord David Frost, environment secretary under Liz Truss Ranil Jayawardena, and former home secretary Priti Patel.
In the Trussite formulation, former chancellor Rishi Sunak is “Treasury orthodoxy” made flesh. At the end of last year, it is no secret the PM pitched himself as the antidote to Trussonomics — and his technocratic tendencies continue to be rubbished as undermining Britain’s long-term growth prospects.
With the PM’s political stall is still defined on pointed fiscal contentiousness, the Growth Commission will find no shortage of policies to disagree with. Indeed, ahead of the Commission’s launch yesterday, Sunak told journalists en route to the Nato summit in Vilnius that while he wanted to cut taxes, inflation “takes precedence over everything else”.
Liz Truss has not always been famed for her strategic nous. Her tranche of immediate tax cuts in September, ahead of any concerted attempt to prepare the ground, was pursued on ideological rather than tactical lines. In turn, former Brexit secretary David Davis accused then-chancellor Kwasi Kwarteng of committing a “Hail Mary”, while senior Conservative Simon Hoare blasted the “inept madness”.
But with the Growth Commission, the former PM appears to have formulated what could be described as a relatively foolproof plan to advance her economic principles. And, politically, its pronouncements on economic planning could mean some searing headaches for Rishi Sunak when it comes time for future fiscal events.
The problem for the Commission will be that its longevity may be limited to the timeframe of Conservative rule. If and when Keir Starmer enters into No 10, its sway among a few zealous Conservative backbenches may mean little. We can probably expect the Commission to broaden its remit to international affairs in the eventuality of a Labour election victory.