UNITED Kingdom? It hasn’t looked much like it this week. The chasm between the leaders of these isles just widened, pointing the way to a general election that will be a battle of ideas.
Arguably that’s exactly what we need, to challenge complacent assumptions on all sides.
Right now, Liz Truss and Nicola Sturgeon appear to occupy parallel universes.
Faced with a minefield of political and economic problems, a smiling, confident Ms Truss stood outside Downing Street on Tuesday, the free market dogmatist, espousing economic growth, enterprise and unshakeable faith in the miraculous healing power of tax cuts.
Weeks after the mercury in England hit 40 degrees, there was no mention at all of climate change. No mention either of public services, aside from the NHS.
The same day at Holyrood, a much more stern-faced Nicola Sturgeon – revealing her annual to-do list, the Programme for Government – focused on redistribution, public services and, again and again, net zero.
She announced a rent freeze, took credit for intervening in the public sector pay dispute “to help shift funding from the highest to the lowest paid” and proudly showcased a rise in new benefit the Scottish Child payment – up 150 per cent in eight months, as she pointed out.
These are two almost antithetical notions of what “good government” looks like; two opposing ideas of virtue.
On the one side, the small government, low spending, free enterprise model relying on (highly dubious) trickle-down theory and rewarding “winners”; on the other side, government by social conscience, focused on fairness, fighting inequality, helping those trapped in low paid jobs and taking action on climate change.
Nicola Sturgeon, of course, lacks the power to take macro-economic decisions, but she made clear how she would behave in Ms Truss’s shoes, calling tax cuts “irresponsible and regressive”, and demanding action on the scale of the Covid crisis to give targeted support to bill-payers, extend the windfall tax on energy giants and boost spending on public services.
This divide is already reframing the political debate, forcing each side to respond to the other.
Ms Truss, fresh from the Tory leadership contest, has barely had to defend her peculiar world view to parliament and public, but that reckoning begins today.
She rejects viewing the economy through “the lens of redistribution” and defends hefty tax cuts for the rich that are unmatched lower down the income scale.
So how will her tax cuts be received when they do little or nothing for those who are already feeling the pinch, including many middle earners? What happens if those tax cuts increase inflation, pushing the cost of food, travel and other essentials even higher?
Ms Truss says she’ll solve the crisis in the NHS, but how will she fund public services if she’s reduced the tax take – and how will the public respond to more cuts?
On climate change, she reiterated yesterday that she would “open up more supply” of oil and gas in the North Sea and, most worryingly, has appointed net zero sceptic Jacob Rees Mogg as business secretary, responsible for meeting climate targets.
She seems far more concerned about short term economic gain than facing up to the challenge of climate change.
How will this, and any rowback on net zero commitments, affect support for the Tories among Shire liberals and young people? (Badly, one hopes, though it will undoubtedly appeal to many other Tory voters.)
Liz Truss, then, may already have sown the seeds of her own political demise. But at the same time, her almost total focus on boosting investment, growth and productivity, sets the other parties a challenge.
The background rumble of discontent in Scotland about the SNP’s lack of affinity with business, which grew louder during the pandemic, is likely to continue as Ms Truss focuses relentlessly on growth.
Are SNP ministers really a group of people who can build a prosperous independent Scotland, their opponents will say, especially given the level of debt the new country would inherit and their promises of generous welfare spending?
Nicola Sturgeon has effectively side-stepped these questions in the past by passing the buck to Westminster for sluggish economic performance, made easier under Boris Johnson because he never really articulated a clear economic plan of his own.
But if Liz Truss talks relentlessly about growth, the Scottish Government will have to respond.
Where does all this leave Labour? Keir Starmer – having taken ownership of the Lib Dems’ windfall tax policy on energy producers – intends to make hay with it. Determined to project fiscal responsibility, at Prime Minister’s Questions yesterday he portrayed Liz Truss’s plan to borrow £100bn to support billpayers as rash and unnecessary, given that she could tax the energy giants’ £170bn in excess profit instead of saddling taxpayers with years of debt repayments.
There will be scant few voters who disagree with him, given how much cash the energy giants are siphoning out of billpayers’ bank accounts.
It shows that Starmer, having learned the lesson of Jeremy Corbyn’s spectacular failure, will follow the Tony Blair playbook and plot a centrist course.
And that is likely to be the best path out of this economic ravine.
Writing in the New Statesman, Resolution Foundation chief executive Torsten Bell addresses the mistaken notion that governments must choose between boosting growth and taking redistributive measures to tackle inequality.
Against a backdrop of rising child poverty in the UK, Bell notes that ignoring inequality is “just bad policy-making” and busts the myth that focusing on distribution is inimical to growth.
At the same time, though, “building a fairer country is far easier when it’s done off the back of a growing economy”.
Other research debunks the idea that economic growth is incompatible with net zero targets. It’s increasingly clear, for instance, that expanding renewable power generation would be good for business as well as households.
Decoupling cheap-to-generate renewable electricity prices from gas prices – one area where there is growing political consensus –would slash energy costs for business.
After expelling dissenters from cabinet, Liz Truss will have to show she is capable of changing course when her orthodoxy proves mistaken. Nicola Sturgeon will have to show she has what it takes to make an independent Scotland prosper and Keir Starmer?
He must convince middle Britain he can grow the UK economy and make the net zero transition work for business and consumers.
This is no time to retreat into old ideologies.
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