Is Trussonomics making a comeback? That’s the suggestion today, as Jeremy Hunt was recorded on the campaign trail telling students that Liz Truss’s goals for the economy were a ‘good thing to aim for’. As Chancellor, he said, he was ‘trying to basically achieve some of the same things’ as Truss, but ‘more gradually’ compared to the former prime minister’s timeline.
Is this a gotcha moment? Labour think so, insisting that Hunt’s comments show an ongoing ‘addiction to dangerous Trussonomics’. It’s a stretch, not least because Hunt is credited with undoing almost every part of Truss’s so-called mini-Budget, when he replaced Kwasi Kwarteng as Chancellor just weeks into her premiership. Hunt is better described as the executioner of Trussonomics than its saviour.
If Hunt is guilty of leaning into the Truss agenda, Labour are even bigger culprits
Still, Truss and her ideas are a very active part of this campaign – and not just because she remains Labour’s favourite talking point in debates. Economic growth has become the dominant policy promise in this election. It is how both the Tories and Labour insist they will continue to support public services and get the tax burden down (in the long run). If Hunt is guilty of leaning into the Truss agenda, Labour are even bigger culprits. Chunks of the party’s manifesto, including its chapter ‘Kickstart economic growth’ read like an ode to Truss’s economic outlook: that growth is not just one solution, but the only solution, to increasing and sustaining prosperity.
But are ‘growth’ and ‘Trussonomics’ really synonyms for each other? If there is any silver lining to Truss’s 49 days in No. 10, it’s that she put significant pressure on both her own party and other parties to start talking again about the merits of growth. Politicians started showing off their pro-growth credentials to avoid being lumped in with her infamous ‘anti-growth coalition’. And they haven’t let up.
But Trussonomics was, in the end, not really an experiment in economic growth. Rather, it was an experiment in mass-borrowing for more spending and tax cuts (mostly for the former). Truss’s mini-Budget was asking the markets to fund more than £100 billion for one year of her energy price controls, on top of a package of tax cuts worth £45 billion. All the policy changes required to seriously kickstart growth – planning reform, healthcare reform, rejigging regulation – were never mentioned during her short time as prime minister. Despite insisting that such announcements would have been made eventually, Truss opted for the spending frenzy before doing the hard work to actually boost GDP figures.
As I noted last week on Coffee House, as party manifestos were being published, real economic growth can alleviate the painful decision to use tax rises or spending cuts to plug the holes in the public finances. But hypothetical talk of growth achieves nothing. That’s what Truss learned the hard way: in an era of higher interest rates, talk has become cheap. Markets want a lot more than optimistic language about economic growth and prosperity, if they are to keep lending.
In that sense, Trussonomics does seem to be having a resurgence, as Labour, the Tories and Reform are all relying on the idea that growth figures will change the medium-term outlook for the public finances. Yet all remain extremely light on detail about how they might liberate the British economy to see this realised.
In that sense, there is a lot of ‘Trussonomics’ floating around this campaign. But it’s not reflected in generalised comments about the merits of growth. It’s reflected in the unwillingness to acknowledge what actually needs to be done to achieve it.
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