"All fur coat and no knickers" (Photo by OLI SCARFF/AFP via Getty Images)

In 2010, a new generation of Tory MPs began to find their feet in Westminster. Though pleased to see the party in power for the first time in their adult lives, they were frustrated that it took them a coalition with the Lib Dems to get there. They bristled at what three terms of Labour government had brought — what they saw as an over-regulated, underproductive economy. And they knew that as freshers in the Commons, they could not shape Cameron’s agenda in the short-term. So, they set their sights further ahead. Kwarteng, Patel, Raab, Skidmore and Truss; the five MPs began to think and write, looking beyond the coalition to what a Tory majority might do next.
The result — Britannia Unchained — was a call to look to the most dynamic economies around the world for inspiration: to cut spending like Canada, teach children like Japan, and build businesses like Silicon Valley. It didn’t oppose the austerity measures of the early Cameron government, but saw that as a precondition, rather than an endgame. The Gang of Five no doubt hoped to be the heirs of Cameron, and with the budget balanced, this global smorgasbord could be their agenda.
At the time, the approach of the Unchainers was criticised for its inaccuracies and drew ire for eye-catching comments on productivity. But beyond that, it made little impact. The authors were promising politicians but did not have a mainline to Downing Street, and their cures for the nation’s ills were unlikely to fly with the Government dependent on the Lib Dems. Even when the Tories held an outright majority, attention quickly moved to Brexit and then Covid, leaving little time for the long-term considerations that the book sought to address.
Through this period, however, the five authors rose through the ranks of the party. Just one week short of the book’s tenth anniversary, they made their final breakthrough when Liz Truss became Prime Minister, with Kwarteng at her side as Chancellor. Today, Trussonomics will move from campaign mode to implementation with the unveiling of the Government’s mini-budget. Will this be the moment Britannia is finally unchained?
Together, Truss and Kwarteng have pitched their changes as an agenda for growth, prioritising expanding the economy over redistribution. Early policy leaks have suggested the moment will also be used to deregulate, confirming the reversal of the fracking ban and removing the cap on bankers’ bonuses. This is likely to be accompanied by the removal of the national insurance rise and reductions on corporation taxes.
Yet the full realisation of the Unchained agenda has been derailed by reality. Today, the priority in the Treasury is the response to rising energy prices. The Government was half-way through detailing this when parliament was interrupted by the death of the Queen, and businesses and individuals remain desperate to see what help they will be given through the winter crisis. Tax cuts alone will not be enough to achieve this, as those most affected simply don’t pay enough tax.
The Government’s preferred option appears to be a per-unit price cap. The costs of this remain unclear and will be determined by the fluctuation of wholesale prices, with the government bound to make up the difference. It’s not the low-tax, low-borrowing idealism of Britannia Unchained, but rather debt-fuelled cakeism, pushing taxes down while keeping spending up. It’s a clear sign of a disconnect between the words and actions of Truss’s top table. Beyond that, despite Truss and Kwarteng’s proud boasts of doing the unpopular to secure growth, it’s noticeable they don’t appear ready to grasp the nettles that might alienate their own support. Uncapping bankers’ bonuses might not win over floating voters, but plays well with the Tory base, either among those who benefit or feel an ideological allegiance against the Government setting wages. It is also a measure that only fiddles at the edge of growth, slightly altering incentives in the already massive speculation economy.
Even the Unchainers will not turn against the vested interests of the Tory Party. When it comes to the growth-sapping shortage of houses, Truss and Kwarteng are unwilling to deregulate planning, knowing that it will sting them in the shires. Throughout the leadership campaign, Truss equivocated on this subject, frequently attacking her own government’s approach to housing targets. Instead, her government now offers a cut to stamp-duty — not a bad idea in itself, though it will just juice the market without more building.
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