i News by Hugo Gye
Liz Truss became Prime Minister in September on a promise to do everything in her power to boost the growth rate of Britain’s economy after a decade of stagnation.
Her plan blew up spectacularly, leading to her unceremonious ejection from office in just 49 days. Rishi Sunak and his Chancellor, Jeremy Hunt, have taken a very different approach which prioritises balanced public finances and low inflation over the highest possible GDP growth.
Growth advocates from the left, right and centre have expressed dismay at how events played out. But they are now hoping to build over the wreckage of the Truss era with a new, bipartisan push to put the UK’s poor economic performance at the heart of politics.
“The one good thing that did happen was that everyone started talking about economic growth,” one Tory backbencher told i recently. Some former members of the Truss administration, led by her Levelling Up Secretary Simon Clarke, have vowed to put pressure on Mr Sunak and Mr Hunt to pursue pro-growth policies – challenging the Government on housebuilding and green energy.
Particularly on the right, many are bruised by the experiences of the past year. Samuel Kasumu, a former No 10 adviser who is hoping to be the Conservative candidate for Mayor of London in 2024, told i: “To be fair to Liz Truss, the foundations of her argument around the need to go for growth were compelling, and in many respects correct for the challenge, but of course her execution – it goes back to the challenge of trying to take as many people along with you as possible.”
He warned that advocates of economic growth had failed to make the argument that the dry figures which make up GDP have a concrete effect on people’s lives and are worth fighting for. Mr Kasumu said: “The compelling vision must be that if we grow our economy, if we increase productivity levels, then everyone wins – not just the people in the Square Mile, but everybody.
“If we had GDP at the same level as the United States, that would mean our GDP level would be at least 30 per cent larger and it also means on average everyone would earn at least an extra £21,000. So that would deal with some of the big challenges we have today.”
Sam Richards, a former aide to Boris Johnson, left the Government last year to set up a new nonpartisan campaign group, Britain Remade, which is aiming to build public support for policies such as planning reform which it argues will help to grow the economy.
“Over my time in government, I became increasingly frustrated that the political incentives weren’t right for politicians to take the pro-growth decisions that were needed,” Mr Richards told i. “We think there is this large coalition of voters who support pro-growth policies, and actually a lot of the political turmoil that we have had in recent years and months is directly linked to the lack of economic growth, the feeling certainly among a lot of people outside London that the economy doesn’t really work any more.”
He is adamant that the need for faster economic growth should be acknowledged by Labour as much as by the Conservatives, pointing out that many of the party’s priorities such as major investment in green infrastructure will depend on an overhaul of the current regulatory regime.
The ultimate aim, according to Mr Richards, is to have the two main parties competing in the run-up to the next general election over which one has the better slate of pro-growth policies. Labour’s own ambition is different: to convince voters that it is the only party which takes the issue seriously.
Rachel Reeves, the shadow Chancellor, sought to paint Mr Sunak as pursuing a “high tax, low growth” policy when he was in the Treasury – and was pleasantly surprised to see her rhetoric adopted almost wholesale by Ms Truss. The see-sawing in Tory policy gives Labour an opening to argue that only it is positioned to go for growth while also keeping the public finances under control.
“You need fiscal responsibility for growth to work,” a party source said. “Truss brought in this plan for growth without any fiscal rectitude, and Sunak doesn’t seem to care about growth at all.” Labour is proposing a number of policies which it says would not grow the deficit but could boost GDP – such as procurement reform, bringing supply chains back to the UK and ironing out problems with the Brexit deal.
But Sir Keir Starmer and Ms Reeves are likely to be careful about how they describe their economic problems, according to allies. “You can’t just talk about growth, you have to talk about jobs and opportunities that flow from that,” a Labour official said.
The next year will see a boom in discussion around growth, Mr Kasumu said, as more politicians and campaigners wake up to the lost decade for Britain’s economy. He told i: “There are a lot of people who know what is correct for the country, who perhaps for various reasons haven’t yet really raised their head above the parapet. I believe that in 2023 we’re going to see more of those people, particularly on the centre-right, speaking up.”