The Truss experiment has failed and she will now make us all pay the price
Public services and public sector workers will soon be forced to pay the price for the Prime Minister's own failures.
"There are people who, in good faith, made arguments about libertarian economics for many years," the former Health Secretary Matt Hancock told the BBC this morning.
"We've tested those arguments about economic libertarianism [and] nobody will try it again for a generation because it is self-evident [that] it didn't work."
The death of Trussonomics is undeniably a relief.
The disastrous libertarian experiment contained within Liz Truss’ “mini-budget” led to the collapse of the pound, a surge in mortgage costs, and forced the Bank of England to spend tens of billions of pounds in order to prevent an all-out financial crisis.
Had this experiment been allowed to continue, the UK economy would have been thrown into an even larger doom loop of surging interest rates, inflation and possible bailouts, followed by colossal public sector cuts.
If anything good comes out of this disastrous period, it will be that the sort of extreme libertarian agenda which has long been pushed by Truss and think tanks like the IEA, has now been utterly discredited.
However, while Trussonomics may have died, the consequences from it live on.
Speaking to Sky News on Saturday, the new Chancellor Jeremy Hunt said that he would now seek to identify what he called “efficiencies” from all government departments, in order to fill the £40 billion hole in government finances created by the Prime Minister.
In reality there are few such “efficiencies” to be found. A decade of austerity and low growth has left the public sector struggling to maintain even the most basic of essential services.
Any further “efficiencies” will mean that some parts of the public sector will simply cease to function at all, while continued pay freezes will throw hundreds of thousands of public sector workers into poverty themselves.
As the General Secretary of the Wales Trades Union Congress told ITV this week: “We’re hearing from public sector workers who are sleeping in their cars between shifts because they can’t afford the petrol - it’s either petrol or making sure you’ve got food on the table for their children.”
None of this is inevitable. Despite the best efforts of this Government over the last decade, the UK remains one of the wealthiest countries in the world.
And while Covid and the war in Ukraine have added huge additional pressures on borrowing, there is simply no justifiable reason for placing the UK’s already crumbling public services under even more strain.
So what should the government now be doing instead, and is there any hope on the horizon for the UK?
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