Kwasi Kwarteng’s “mini-Budget” will do no good for Britain’s economy, says Martin Wolf in the FT. In 2022, the Thatcherism that he and Liz Truss espouse is a “zombie idea”. Margaret Thatcher herself successfully liberalised labour markets, curbed trade unions and privatised industries, and those changes stuck. By rich-nation standards, Britain has a low-tax, deregulated economy. It’s a “fantasy” to think that more deregulation and tax cuts are what we need, when it’s the things Mrs Thatcher failed to reform – land use, productivity and corporate governance – that really weigh on economic performance. “What is simple has already been done. What is left is hard to do.”
Unlike the last four Tory PMs, Truss is a “true believer” in the power of free markets, says Allister Heath in The Daily Telegraph. Quite right too: “our putrefying economy is in desperate need of shock therapy”. The PM is ideally placed to deliver a “Thatcherite Brexit” – the only kind that will actually work. She plans to “weaponise tax and regulation to suck capital and jobs out of Europe”, and if she gets her way, the UK finally has a chance of becoming the “pro-services, pro-science, pro-technology economic centre that British Eurosceptics have dreamt about”. Of course, many Brexit voters had a different vision, but Truss’s gamble is that “what counts is what works”, rather than what is popular in the short-term. “The only question now is whether Truss and Kwarteng are willing to go far enough.”
From the moment Truss arrived in parliament more than a decade ago, “she has wanted a lower-tax, less regulated economy”, says James Forsyth in The Times. The very reason she was originally a Lib Dem was because “she saw it as the most classic liberal party”, only switching to the Tories because of the former’s “lack of seriousness about power”. Optimists about Truss’s approach point to John Major in 1992: a little-known cabinet minister takes over from a domineering prime minister “and delivers a shock election victory”. A pessimist would point to 1997: “the Tories lose their reputation for economic competence and are routed”. What’s clear is that Truss and Kwarteng know they only have about 18 months to show they’ve got the economy going again. That’s why today’s announcement is so big: it’s a “high-risk, high-reward strategy”.