Here’s my plan for growth, Liz Truss: join the EU and let its citizens work here | William Kegan


Ffirst the dynamic duo, Liz Truss and Kwasi Kwarteng, would “go off to a run”; then they claimed they hadn’t prepared the ground they were going to hit. What their marriage of guilty ignorance and arrogance actually achieved was met with astonishment not only by them, but around the world: they hit the book functioning.

The Conservative Party took a long time to recover from Black Wednesday on September 16, 1992, when the pound was humiliatingly ejected from the European Exchange Rate Mechanism – the ERM – whose membership had become the linchpin of their economic policy.

Well, it will take a long time for what remains of the old Conservative Party to recover from this self-imposed financial crisis. Financial markets voted with their feet on Labor’s economic policies of the 1970s – forcing the Callaghan government to borrow from the International Monetary Fund in 1976; and they voted with their feet on the policies of Truss and Kwarteng now. It took Labor ages to recover.

It wasn’t good that the duo and their ilk tried to dismiss the U-turn in their plan to cut the highest tax rate as a “distraction.” Moving it from 45% to 40% was the centerpiece of their “growth plan”.

It goes back to the 2012 leaflet, Britannia unleashed, of which they are co-authors. In a wonderful Freudian slip, Kwarteng gave the game away by starting to say politics was 10 years old – then corrected himself to say 10 days.

The chasm between support for Truss among Tory party members who voted for her and Tory MPs has become all too apparent. But when people say to me, “Don’t you regret your opposition to Johnson? I know they must be speaking ironically. As appalling as Truss is, Johnson’s prorogation of Parliament and his brazen disregard for domestic and international law have done great damage to the reputation of this country. He had to go.

Boris’ returning brigade needs its heads – and values ​​- examined. Anyway, now we learn that my old acquaintance Boris has already hit the American lecture circuit, where he brags about Brexit, while on this side of the Atlantic his obsession with making advancing Brexit is recognized as a first-class disaster. A recent YouGov poll shows that 87% of respondents agree the economy has suffered since Brexit, with 38% of incumbents and 37% of Tory voters blaming Brexit. As the Us (formerly Global Future) think tank points out, respondents want politicians to “stop avoiding the topic” – Keir Starmer, please note!

Which brings us to this “growth plan”. To my knowledge, and to the knowledge of most economists I respect, there is no evidence that cutting higher tax rates does anything to spur economic growth. Moreover, the profits do not “trickle down”: they remain stuck at the top. On this subject, the economist Amos Witztum underlines that much more attention should be paid to the distribution of gross domestic product than to its growth.

However, in a political context where Truss has decided that the jury is no longer “out” on our relations with France, and President Macron is “a friend”, I have a suggestion for Truss, or whoever succeeds him. if his parliamentary colleagues decide his political career must be, so to speak, tied up.

Two ways to improve the growth rate of this country would be to join the single market and welcome EU citizens who want to work here, and, my goodness, many British employers would welcome them. The reverse of the boost given to UK economic growth by joining what was the European Economic Community from 1973 is characterized by our likely Brexit-induced exclusion from the £95 billion Horizon Europe science program euros. To make the most of its eminence in scientific innovation, the UK needs to coordinate with the EU.

In what context it is interesting to note, as my fellow journalist Fintan O’Toole highlighted in the irish timeonly in their strange work Britannia unleashed, Truss, Kwarteng and co didn’t see our EU membership as a problem!

By unnecessarily disrupting financial markets, Kwarteng is likely to go down in history as having been responsible for one of the worst decisions in British economic policy since Winston Churchill returned us to the gold standard in 1925. The essence of this decision was that, for reasons of national pride, the British exchange rate was revalued upwards to the point that our exports became seriously uncompetitive.

The Brexit that Johnson is bragging about has eroded our access to our main market, with devastating effects on our trade. Kwarteng’s desire to compound the impact of austerity, Brexit and the cost of living crisis in order to cut taxes on the wealthy, with no evidence that this would boost growth, was deranged.


Comments are closed.