David Cameron, Nick Clegg, George Osborne, Theresa May and, tragically, even Boris Johnson must all share the blame. None of them had the conviction or courage to dismantle Gordon Brown’s system of command and control, to reverse the creeping bureaucratization of Britain, to reverse our slow transformation into the worst stereotype of a stagnant, decadent, obese, overtaxed European welfare state, stunned with free money, easy credit, skyrocketing house prices and triple lock pensions. Until a few weeks ago, it seemed that even Brexit, that last act of popular democratic rebellion, that last mechanism to drive the nomenklatura into reform, had been neutered, turned into another excuse for hustling and hawing and wasting taxpayers’ money . false “leveling” and pseudo-decentralization. Then suddenly, one minute to midnight, as all hope seemed lost and stagflation looked like the new normal, we were suddenly rewarded with a new Prime Minister who was apparently intent on a revolutionary policy change. Unlike the last four Tory prime ministers, he truly believes in the power of free markets and liberal economics to deliver growth and prosperity. Its plans seem almost too good to be true and are, in many cases, exactly what the critics of the free market, from the far fringes of the wilderness, have been calling for for so many years. It sure feels like we’re back in 2016 and that the last six years have been a bad dream. Truss wants a Thatcherite Brexit, the only kind that will actually work: it will use taxes and regulation to suck capital and jobs out of Europe. If it gets its way and isn’t derailed by useful idiot Tories or an apoplectic left-wing establishment, Britain finally has a chance to become the entrepôt-state, the low-tax, reasonably regulated state, the high-value-added offshore, pro. -services, pro-science and technology economic hub that British Eurosceptics have been dreaming of since Margaret Thatcher’s Bruges speech in 1988. Of course, many Brexit voters had a different vision, but Truss’s bet, right, is that it’s what counts it’s what works, rather than what’s popular in the short term. She hopes these voters will support her if she can deliver a drastic increase in prosperity across the country. Ideology is back and Britain is at a turning point: either Truss has enough time and capital to make the massive changes needed, ushering in a new golden age, or it’s already too late and we’ll end up with the most left-wing government since Harold Wilson. One thing is clear: the “center” is over, and rightly so. Our intellect has fallen into a toxic form of decay. He understands there is a problem, but curiously blames ‘Toryism’, failing to understand that Truss is rejecting the failed social democratic consensus of its predecessors. Absurdly, most orthodox “thinkers” have convinced themselves that nothing can really boost growth – except re-entry into the single market, that is, even though most Western European countries are failing as badly or worse than us. The subtext is clear: we have sinned and must now rot in hell. Their only response is to relentlessly raise taxes on the best and increase handouts. The size of the cake is fixed and must be redistributed to death. The Institute for Fiscal Studies, like the rest of the left establishment, opposes the Truss tax cuts, just as it opposed Brexit. It reckons that the growth trend should return to the much stronger pace seen between 1983-2008 (when Thatcher’s reforms were starting to make themselves felt, until they eventually collapsed), rather than the much weaker expansion seen in the 2010s, just to stabilize the national debt as a fraction of national income. However, the IFS doesn’t seem to understand why Truss would be indifferent. There is a new dividing line in British politics: between those who believe much faster sustainable growth is possible and those who do not. Truss knows that the country will be in trouble if it doesn’t significantly increase GDP, but she also correctly realizes that we are equally doomed if it fails to cut taxes. Our current low growth is not sustainable with an aging population. Truss is betting the house on boosting annual GDP growth to 2.5 percent or more, massively incentivizing investment, rebooting the city, boosting building and construction, dramatically increasing energy production and sparking a business revolution. Thatcher did it, why can’t she? The only question now is whether Truss and Kwarteng are willing to go far enough. Only an extremely radical change, such as that seen in the 1979 and 1986 Budgets, can shake Britain out of its quasi-stagnation. Reversing Sunak’s increases in national insurance and corporation tax will be extremely helpful, but it is not enough: it will only prevent the situation from getting worse, not improve it. UK business taxes are structured in a way that penalizes business investment, making growth, productivity and wages. Allowing companies to fully spend all their investment in plant, machinery, construction and buildings would boost long-term GDP by 2.5% and wages by 2.1%, for just £10 billion a year in reduced revenue, according to the Center for Policy Studies. The reduction in stamp duty would be large: until 1997, this levy ranged from zero to 1 per cent. now it reaches 17 percent. But we also need to build many more houses and normalize monetary policy. All taxes must be reviewed and any that harm growth cut, even at the cost of a larger deficit. There is also a lot of wasteful spending to be cut after Johnson’s binge. The Left is wrong: the danger is not that Truss will be too bold. It is that she will be lured by defeatist propaganda into doing very little. Go ahead, Prime Minister: this is your one chance to create a British renaissance.
