Tory criticism of Hunt is displacement activity
Like many conservative-minded or free-market people, I have felt rather despondent since hearing Jeremy Hunt’s Autumn Statement last week. It overdid the gloom and targeted the most wealth-creating individuals and sectors for the greatest punishment, making welfare more tempting and work less so.
There is a lack of reality, however, about most of the criticisms. The Chancellor has little room for manoeuvre. That is in large part the fault of the same pro-growth tribe whose general arguments are more or less right.
In all the past 12 years of Conservative, or Conservativedominated, government, politicians have acknowledged their debt to the Thatcher governments’ reforms but have usually undone them. A classic case has been the smashing of a well-functioning and competitive energy market. It has been replaced by one based on vast green subsidy in the vain hope of “saving the planet”, neglecting our native energy security.
Other failures include overregulation, a lack of interest in tax reform, unchecked spending, and craven propitiation of the NHS. Nor have ministers been brave enough to take on the anti-growth instincts – against building more houses or launching major infrastructure projects, for example – which are so strong in their party.
Politicians such as Boris Johnson and Liz Truss have loved to speak of “unleashing” national economic potential, but have not actually done so. Escape from difficulty through quantitative easing and artificially low interest rates eventually trapped the entire country in the national equivalent of negative equity once rates had to go up. Few had given forethought to what would happen when that inevitable day came.
After the Tory leadership election this summer, the Truss “dash for growth” immediately threatened to be more crash than dash. It was not wrong to prioritise growth. The error was to pretend (or believe) that it could triumph in time for the next general election, and thus to rush everything.
Which is why we are where we are. In comes Mr Hunt like an A&E doctor whose task is to stabilise the patient. He has not had time to think of a cure. And because the next election is a maximum of two years away, it is too late to embark on the deep, careful course of treatment which is needed.
Even when due allowance has been made – which it must be – for the all-consuming struggles of getting Brexit through, the sudden cloud of Covid and then Putin’s invasion of Ukraine, it remains shocking what little ministerial thought has been given to improving a modern economy. On Left or Right of the party,
Remain or Leave, most responses have been shallow, instant and mediadriven – like one long, embarrassing political selfie session.
The Right’s instinct that the centrists in charge have got it all wrong is essentially correct, but instinct alone is not enough. Where has its actual policy been? Why did Liz Truss act with such haste that orthodoxy suddenly looked like the only refuge?
I am afraid I see the foaming denunciations of Mr Hunt and Rishi Sunak as yet more displacement activity to avoid working out what is to be done. The simple fact is that the Tories cannot afford to kick out any more leaders or to embark on controversial reform between now and the election. When the day comes, they will have to coalesce behind a manifesto which can consider itself lucky if it is able to say, “The worst is now behind us.”
Yes, it is, Sir Keir Starmer will say to the voters, but only if you get rid of the people who made it so bad.
How I love that picture of Sir
Tony Blair and Bill Clinton sharing a platform in the Bahamas with the youthful chief executive of the crypto-giant FTX as he holds forth about “effective altruism”.
Sam Bankman-fried, 30, is like the creation of a satirist. Even his surname (I feel its second barrel should be pronounced as in “fried potatoes”) would be ruled out by a film director as too obviously unreal. So would his trainers, white socks and baggy shorts.
Once upon a time, dodgy capitalists put on extreme displays of wealth. In the 1960s, the acerbic journalist Claud Cockburn wrote of some conman, “I went into his office – fitted carpets up to your knees, three secretaries, gold-plated telephones. You could see at a glance the man was bankrupt.”
Nowadays, great cheats do the opposite. They are loveable mop-top vegans, who dress down, have fun, profess their simplicity and “fight climate change”. Some of them also take lots of drugs and contribute to the Democratic Party in the United States. It now appears that FTX never had any “real” money at all except what it could take from investors or borrow from bankers. Its value of $32billion vanished overnight.
There is a clever arrogance about behaving and dressing like this in the company of other rich and powerful people. Far from being humble, you are showing your superiority to them. You make Blair, Clinton et al, who tend to dress conventionally, feel inferior. Like some yogic Indian guru, you appear to possess arcane wisdom.
You also appear to reconcile the human craving for virtue with the even greater human craving for large piles of money. For many credulous people, particularly well-educated ones brought up to despise ostentation, this is the highest form of wish-fulfilment.
Any lessons for investors here? Don’t entrust your money to a man who exposes his legs at business meetings.