Could kwasi and liz make the economy fizz? | thearticle

The Boris Johnson bandwagon has moved on from Downing Street to the global speaking circuit. No technicolour premiership has ever shone so brightly, then crashed so spectacularly. We now

move into the monochrome world of Liz Truss. No entrant to Number 10 can ever have had such low expectations of her. According to a YouGov poll the country is shrugging its shoulders in

weary ‘disappointment’. Two years just isn’t enough time for Liz Truss and her Government to dig its way out of the mess it finds the economy in. Sterling is finding new ways of devaluing

itself against both the dollar and the euro. In normal times, currency devaluations kick start exports and then the wider economy, but manufacturing is on its knees because getting anything

out of a port is a Gordian knot of red tape. There has been a flight of human and financial capital from the UK economy. After the 2016 referendum there was a departure of brawn, as “cheap

labour” went back home to the EU. Post-Covid there is a flight of brain, with many “intelligent young things” leaving for countries with a supposedly brighter future. The FTSE 100’s

performance over the last six years, when compared to its nearest competitors, paints a picture of foreign investment moving out of the UK. Everything from the bond markets through to GDP

growth back up the same picture: international rejection of the British economy. This is why the gathering international economic headwinds are hitting the UK economy hardest in the G7. The

Government might not be able to stop the trauma caused by restarting the post-Covid global economy, any more than it’s to blame for Putin’s war in Ukraine.  However, the UK is lacking fiscal

storm defences, which we were told were rebuilt thanks to the Cameron and Osborne austerity years. Now that we need them, they’re nowhere to be found, for which Liz Truss and the Tories

will be blamed. And this is all before we get into the mess the public services are in. They can’t be fixed in a couple of years either. So, unless there’s some sort of miracle, Liz Truss

has already lost the next general election. However, even though her Premiership didn’t start well, with her Cabinet no where near the Government of All the Talents promised, the new PM

might still have the opportunity to let history smile on her. This will be mainly because she has, in the form of Kwasi Kwarteng, appointed a formidable brain to run the Treasury. He has

already declared that he will be “relentlessly focusing” on growth. The Truss/Kwarteng partnership must be implacable in pursuit of setting the foundations of a stable and fertile economy.

They must be visionary, yet tedious and spend the next two years playing “route one” politics. Let others start picking fights: ignoring culture wars will be especially hard for Kwartang.

But Prime Minister and Chancellor must do the big boy things which Boris Johnson and Rishi Sunak couldn’t get around to: reform, remould and build an economy. Today’s energy proposal might

be the start of this. The fact that many in the UK have been agonised by the prospect of a Christmas spent in some sort of Dickensian dystopia is a national disgrace. But at first glance,

and I’m no energy expert, it looks like a grown-up plan. They haven’t gone for the easier, short-term option of a windfall tax, which would have been the reflex action of most governments.

They have consulted with energy companies – specifically, it seems, the renewable and nuclear sectors — to create a long-term plan which will protect and invest in greener energy. They’ve

even managed to draw a line between the domestic and international market to create a separate pricing point, which people said was impossible. There are things in the plan which are

wrong-headed. I can’t get my head around how they hope to frack for gas in Lancashire. The help should and could always be more targeted at the genuinely needy.  Energy companies should do

far more in terms of research and development in the sector. Lastly, the cost means Truss cannot go about pursuing tax cuts paid for by borrowing. If she does, it will spook the City and put

the final nail in the coffin of Conservative fiscal competence. The next two years will be chastening for Prime Minister Truss. Her presentational style will make her the go to lamppost for

every comedian or journalist looking to take a leak. Like Theresa May, she may prove to have an unfortunate personality: the more the public get to know her, the lower her ratings may go.

She told her MPs this week that the 2024 general election campaign had begun. Whatever the Tories do now, however, it may already be over for them. However, if she and her Chancellor make

decisions which are for the long-term good of the country, then history might look more kindly on Liz Truss than her flashier predecessor. A MESSAGE FROM THEARTICLE _We are the only

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