Meterost political plans go awry either because of unforeseen events or because perfectly foreseeable events were ignored in the plan. Liz Truss’ ambitions for a policy blitz in her first few weeks as prime minister fall into the first category. She couldn’t have known that the Queen would die and that politics would be suspended in national mourning.
It was a second failure on Monday night when the prime minister admitted on his way to New York that there would be no UK-US free trade deal. Its size cannot be underestimated just because it feels inevitable.
When Truss was international trade secretary, the free trade agreement with Washington was largely Plan A. It would be the crowning glory of Britain’s triumphant liberation from Brussels: a model of economic sovereignty and transatlantic solidarity. In the mythology of Eurosceptics, the Washington Accord is a bridge to utopia and a blistering rebuttal to all those pessimistic economists worried about the cost of leaving the EU’s single market.
Now Truss admits that there aren’t even any negotiations. This should come as no surprise to those who have heard what American diplomats and trade experts have to say over the years.
Americans need compelling business incentives to open their markets to foreigners. No matter how “special” the relationship with the UK is, they don’t do it to help Truss. In addition, Britain’s unilateral repeal of the Northern Ireland Protocol in the Brexit deal has promoted the country as a disruptor of international law and an unstable trading partner.
Truss doesn’t appear to be disturbed by the sinking of the Brexit trade flagship, as she has long since embarked on a new plan. It will be presented to the lower house by Prime Minister Kwasi Kwarteng on Friday.
This “fiscal event” is a small budget, but not as onerous as the official Office of Budget Responsibility (OBR) forecast. OBR was not invited to run the figures. As an institution, in the eyes of the new regime, it is as suspicious as the Treasury. Both are bastions of old economic thought: a bean-counting response to such a tiresome impact on functional European relations; Truss has made clear the purging of “orthodoxy” as her mission.
The reset began when Tom Scholar, the permanent secretary of the Treasury, was sacked on the first day he entered the building in Kuwaten. It’s an act of revolutionary zeal that has caused all the Whitehall fuss and technocratic brains that the Brexit-era radical Conservatives love to see infuriated. It’s a symbolic erasure of institutional memory by a prime minister and a prime minister who thinks the past has nothing to teach them what they don’t know.
Friday was the first day of a new era of economic growth, the first year. The theory is that all previous governments were too concerned about the distribution of wealth and therefore took the bold steps necessary to produce these things in the first place.
The melting pot of economic movements will be ignited by tax cuts. Any revenue shortfalls will be borrowed, and tens of billions of dollars have been pledged to rein in energy bills amid the winter fuel crisis.
This is only part of the plan. The second part is that the wheels of growth spin freely without regulatory barriers. The red tape and bureaucratic thorns that seem to have plagued backbench Conservative MPs for decades will eventually be cut and burned.
First up is the bonfire: the cap on banker bonuses. In the Trussite doctrine, this condemnation of urban greed is a senseless anti-ambitious political gesture that should never be indulged by the hot-blooded, pro-business Conservative Party. There are also plans to provide more lubricant for free financing.
It might sound like an odd move to spray money on someone who already owns it in difficult times, but it’s part of the plan. Truss is ready to deal with the political pain of unpopular decisions. She wears it as a badge of her Thatcherish determination. She expects electoral rewards when the growth dividend comes and her vision is proven. It was painful, but it worked, she would say, as Britain heads into 2024 with a general election and a fifth consecutive term of Conservative government.
For the program to work, many things cannot go wrong. Financial markets must not be spooked by governments writing blank checks and dismissive waves of national debt. The energy crisis cannot be dragged on to the point where governments can no longer subsidize households and businesses and start clawing back money from those who have no means to pay. Jacob Rees-Mogg, as energy secretary, will have to tell the bad news without giving the arrogant image of never wanting anything in his life.
Financial incontinence must not leak with higher inflation. A distressed public cannot lose patience with a devastating winter or make any demands on a health service already struggling with a mild fall.
Many Conservative MPs who have never backed Truss for leadership need not worry about slipping polls or revolt on the things their angry voters care about. Hardline Brexiteers will have to bite the bullet and not complain about the inevitable compromises needed to keep trade with the EU. The benefits of any economic growth spurred by the program must not fatten the usual corporate cat at the expense of everyone else.
People in the former Labour heartland who lent their votes to Boris Johnson in 2019 must find no reason to remember their old hostility to the Conservatives. Truss has to avoid sounding grim and aloof, while explaining people’s misfortunes for their own benefit.
And these are just visible dangers, not a regular barrage of unforeseen events.
Truss is not afraid of tactical retreats. She achieved her signature energy policy by making a U-turn, initially saying there would be no “handouts.” There is a plan, but it has to change. Now there is a new plan. It will also change. I suspect this will be the theme of her Downing Street days: supreme confidence in the impermanent; arrogant, self-proclaimed visionary, but stumbles on obstacles everyone foresees; always a bold plan , never completes a task.