The Daily Telegraph
Liz Truss might demand freedom, but this country needs security, too
Only a sensible balance between state, markets and communities will make Britain wealthy and safe
Nobody can accuse Liz Truss of lacking strategic clarity. She promises the government she leads will go all-out for economic growth. After 15 years of poor growth and pay stagnation, there is good reason for doing so.
As we are now experiencing, without growth incomes fall and investment dries up. Debts become harder to pay. Pension funds cannot grow quickly enough. Social mobility slows. Taxes go up. Political debate turns from how to share the proceeds of a growing economy to how to redistribute what people already have.
But poor growth is not the only problem we face. As commentators assert, Truss faces the toughest inheritance of any recent PM. Inflation is surging, the unions are striking, recession is looming, sterling is struggling and gilt yields are rising. China and Russia endanger global stability, and the threat from terrorism remains. The NHS and schools are grappling with the legacies of Covid. Crime is up and immigration is soaring. Facing the energy crunch, the country is crying out for help.
Truss is no monomaniac. She knows many of these problems are connected and she faces trade-offs in the choices she makes. She wants to take a hard line on China, for example, despite Treasury orthodoxy dictating that we need to ignore dangers like industrial espionage and the loss of geopolitical leverage, to attract investment.
But the core of her message is that we desperately need to restore growth, and we need to do it by restoring what she calls “Conservative ideas”. Those ideas, she says, are tax cuts, supplyside reforms and deregulation.
There is an argument for each of them. Although demands on public spending, driven by our ageing population and unbalanced economy, mean the overall tax take is likely to remain high for some time, targeted tax cuts to encourage business investment are necessary. Supply-side reforms, most obviously to the planning system which holds up new housing and infrastructure, are essential. And deregulation – or perhaps, smarter regulation – is crucial to the development of high-growth industries like tech and life sciences.
Freedom – getting the state out of the way not only of business but the rest of us too – is the theme that runs through the Truss agenda. But there are several challenges to the proposition. The first is practical, and Truss will be confronted by it straight away. For the energy crisis requires massive intervention in the economy, and cash transfers worth tens of billions of pounds. The bond markets may determine if she is right to be relaxed about spending more, borrowing more and taxing less, but Truss will have to use the state to intervene in the energy market.
The second challenge is political. For like all new prime ministers elected mid-term, Truss has a contradictory mandate. The mandate she has won from the Conservative Party is for change, but the mandate she inherits from Boris Johnson is based on his 2019 manifesto. Any attempts she makes to diverge from that manifesto will be opposed not only in the House of Lords, where she has no majority, but in the Commons too. Many Tory MPS simply will not vote for radical planning reforms, for example, or to leave the European Convention on Human Rights or repeal legal rights for workers.
The changes Truss succeeds in making have only a limited time to work – a little more than two years – before a general election.
The third challenge is most important. For freedom is simply not the pre-eminent human value. We seek security, dignity, justice and many other values too. Often personal freedom complements other values, but sometimes – during the pandemic, for example, or when considering tax rates or drugs laws – we accept the need to restrict our freedoms. The judgement about the trade-offs involved and the balance to strike differs in different times and contexts.
It is undoubtedly true that the energy crunch demands collective action to get not only the poorest families through the crisis, but everyone on middle incomes and thousands of businesses too. The lessons of Covid and the energy crisis – the importance of solidarity, state capacity, domestic production and national resilience, and a scepticism towards reliance on trade with authoritarian regimes – show that the needs of our time are as much about security and belonging as freedom.
There is a deep complexity behind these concepts, of course. We need economic growth to maintain national strength and the security that such strength brings. Freedom – expressed through freedom of thought, innovation and market economics – can help to achieve prosperity and security. But the same is true in reverse. Security from internal and external threats, and the stability and opportunity afforded by healthy families and communities, civic confidence, social capital and strong services, can give meaningful freedom experienced by all and the conditions we need for growth, prosperity and a happy common life.
So the pursuit of growth cannot only mean a race for freedom. Targeted tax cuts are important, yes, but so too is public spending and investment, for infrastructure and public services are not only the result of a strong economy, but important contributors to its achievement. Supply-side reforms might include planning reforms, yes, but they must also include the training, retraining and investment in people our economy needs. And getting regulation right matters, yes, but this does not only mean scrapping regulations, but building stable regulatory frameworks and reforming ineffective regulators, to allow innovation and encourage investment in sectors of the economy that will bring growth, employment and opportunity to our country.
An ideological crusade against the state cannot succeed amid the complexity of the challenges we face – nor even in the pursuit of growth. Freedom is a vital human value, but it is not the only one. To get us through the crises that confront us, and to build a country strong and prosperous enough to face the future, we need a constructive partnership between government, community and markets. Freedom matters, but Conservative ideas are about more than removing the constraints on our behaviour.
The changes Truss succeeds in making have only a limited time to work before a general election