I HATE to say I told you so – but I did. In January, at the height of the partygate row, I pointed out to those insisting that Boris Johnson was the spawn of the devil that his replacement was likely to be very much worse.
And so it has proved. As Liz Truss cruises to success in the Tory leadership race, we now have a prime minister-in-waiting who actually thinks you can deal with the cost-of-living crisis by tax cuts instead of “handouts”.
Most people think she’s just saying this to win the votes of elderly Tory party members who regard anyone to the left of Margaret Thatcher as a communist. And, of course, she is doing that. She has also hinted at more support for struggling families. However, be in no doubt: Liz Truss believes. She is a die-hard Brexiter, monetarist and tax-cutter who genuinely believes that the problem with the NHS is that it has too much money.
She wants to turn Britain into a low-tax “Singapore-on-Thames” where regulations will be scrapped so that unfettered capitalism can rejuvenate the nation. It is a quasi religious belief, totally at variance with economic reality, but don’t make the mistake of thinking she doesn’t mean it. She does.
Both Tory leadership candidates have been forced to disown the actions of the high-spending government of which they were a member only last month. This week, Rishi Sunak dismissed out of hand the rather sensible proposal by Scottish Power to freeze the energy price cap and quarantine the losses in a special fund to be repaid over 20 years. That is precisely the kind of solution he would have endorsed had he still been Chancellor under Boris Johnson.
Viral load
FURLOUGH was not just a Treasury brainchild. It was Boris Johnson who insisted on it, to deal with the consequences of the pandemic. Johnson knew intuitively that it was political madness to force people into destitution just because they could no longer go safely to work.
It was going to cost billions, hundreds of billions as it happened, but furlough was money well spent.
Imagine if Liz Truss had been in office and had addressed the pandemic with a policy of tax cuts, not handouts? There would have been riots in the streets. You cannot impoverish people in the modern age. This might have happened routinely during economic depressions and wars in the Victorian era and before, but it is not possible in the 21st century.
Moreover, punishing people by penury does not work economically. If Boris Johnson had “let the market solve the crisis” in 2020, there would have been a recession and millions of job losses. Indeed, many commentators, myself included, thought that high unemployment was all but inevitable once the pandemic was over and furlough schemes were wound up. In fact, the reverse happened.
There has been a chronic labour shortage since 2021 which had led to a record number of visas for migrant workers, the reverse of what Brexit was supposed to do.
Boris Johnson confirmed the first principle of Keynesian economics that the first task of Government is to keep the economy going, if necessary by unrestrained short-term borrowing. Gordon Brown would have done the same.
‘Blindingly obvious’
PUBLIC debt has increased, but that is inevitable in times of national crisis like pandemics and wars. It has been Europe’s misfortune to have a pandemic and a war in quick succession. So, how would Boris Johnson have tackled the energy price? It is blindingly obvious. He would have frozen the Ofgem price cap even before they had announced it. Johnson would have gone on TV to assure voters that they would not have to pay bills of £5,000 a year. “It’s not gonna happen. Whatever it takes, granny won’t freeze because Putin turned off the gas.”
The fact that neither Sunak nor Truss has done this indicates not just their insensitivity but their lack of political judgment.
It is callous even to contemplate people being plunged into hardship this winter when the UK has such abundant energy on and off its shores. Britain is rich in hydrocarbons and also in renewable energy.
Unlike Truss, and many Conservative Party members, Boris Johnson actually took climate change seriously. That is why he chaired COP26 and set a goal of 95 per cent carbon-free electricity by 2030. “Green is good,” he said, paraphrasing greedy Gordon Gekko from the film Wall Street.
Johnson realised that climate change is essentially a capitalist project that will generate vast revenues and many jobs in the relatively near future. He would have hailed the Seagreen windfarm off Angus that started generating energy last week, and said that it represents the solution to the energy price shock.
The revenues from Britain’s second North Sea energy bonanza will pay for any upfront borrowing to reverse the energy price cap.
Policy piffle
NEITHER of Boris Johnson’s replacements appear to understand this. Both have poured cold water on “net zero dogma” as Rishi Sunak’s key supporter, Oliver Dowden, put it. Sunak wants to halt onshore windfarms and Truss’s only concrete policy on climate is to cut the green energy levy and leave it to the market.
The Tory Party is the “Nasty Party” once again. Not surprising that red-wall voters are saying they want Boris Johnson back. It was anyway irresponsible of the Conservative Party to force the resignation of a prime minister during a European war and in the midst of the worst energy crisis in British history.
Media commentators attack the former prime minster for going on holiday when he should be at his desk sorting out the crisis.
Well, what did they expect? They were the ones insisting that he resign for the crime of being adjacent to a birthday cake during lockdown – an offence for which Rishi Sunak also received a fixed penalty notice.
“In the name of God go,” said the Tory MP David Davis to loud cheers from Labour.
Of course Johnson has gone on holiday. It would be an abomination for an ex-prime minister to be making legally-binding decisions involving vast sums of public money.
There was always going to be an interregnum while the Tory Party went through the laborious process of choosing a new leader.
Again, commentators complain that it should not be for 160,000-odd geriatrics to choose our next Prime Minister. They are quite right.
It was foolish, not to say unconstitutional, for Conservative MPs to force the resignation of a Prime Minister with a majority of 80. (They’ll never see that again).
He should have been replaced at the next General Election, by the people of Britain – not a handful of party members.
Liz Truss will have no authority. She is a lame duck even before she becomes one.
Boris Johnson was forced from office because Tory Brexiters believe he was betraying the cause. He was too left wing, a “Tory Gordon Brown”, and increased taxes to their highest level since 1950.
Well, careful what you wish for. Liz Truss can do a lot of damage before she’s thrown out, as she will be, in 2024.
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