Liz Truss wants to make a comeback – the UK needs to make sure it doesn’t happen

• Justin Trudeau said there were “credible allegations” that India’s government was involved in the killing of a Sikh leader in Canada. 
• YouTube blocked Russell Brand from making money from his channel following allegations of rape and sexual assault (more below). 
• British Vogue appointed Chioma Nnadi as the first Black female editor of the fashion title. 

Argentina on the Channel

The former UK prime minister Liz Truss returned from political purgatory yesterday to complain that state spending was higher than in the 1970s, growth was too low and her ideas to fix it were “not fashionable on the London dinner party circuit”.

So what? She was right on all fronts. 

• UK public spending is at 46 per cent of GDP, thanks partly to what became known as the “moron risk premium” added to the cost of long-dated UK debt on her watch.
• The economy shrank by half a percentage point in July and grew at 0.2 per cent for the second quarter compared with 0.5 per cent for the G7 and 1.5 for Japan.
• Truss’s ideas to boost growth (cut spending, taxes, regulation and above all the size of the state) aren’t fashionable in London – or Montreal, where Mark Carney, former governor of the Bank of England, said at the weekend her view that “slashing leads to growing” was rooted in a basic misunderstanding of what drives economies. 
• He said it meant that “when Brexiteers tried to build Singapore-on-Thames, they delivered Argentina on the Channel; a high-inflation, high volatility problem for the world economy.

Few friends. Truss’s speech at the Institute for Government was attended by Nigel Farage and the former Brexit negotiator David Frost, but not a single Conservative MP. Even so, she gave what looked like a pitch for a return to relevance, ticking off talking points to remind activists why they used to think of her as Boris Johnson’s heir. She restated her case for

• freezing corporation tax;
• fracking in the North Sea;
• abolishing windfall taxes on fossil fuel producers;
• “Canary Wharf-style” investment zones;
• planning reform to boost property ownership for young people; and
• cutting red tape to make childcare more affordable. 

Brass neck. It was a peculiar paean to discredited policies, with not one but three appeals for a return to tax-free shopping for tourists (the Daily Mail happens to be running a campaign on the subject) and no hint of apology for her catastrophic “mini-budget” a year ago. Instead she name-checked Carney as an honorary member of an anti-growth coalition whose “25-year economic consensus” she still blames for sluggish Western growth and wants to shatter.

More to come. Truss has no plans to stand down as an MP. She will attend the Conservatives’ conference next month and, without irony or a shred of self-awareness, will produce a book next year titled Ten Years to Save the West.

Reality check. “Given what she did to the UK in 49 days, imagine what Liz Truss could do to the West in 10 years,” the former Labour strategist John McTernan tweeted this month. It’s worth thinking about. She has a small band of allies who want a revival of Trussonomics and a new supply-side revolution in honour of Thatcher and Milton Friedman. Yet the UK is still living with the after-effects of their experiment last year: 

• Mortgage rates rose by a third.
• Mortgage approvals fell by a third.
• House prices fell by 5 per cent.
• Ten-year gilt yields more than doubled, raising the cost of public borrowing and inflicting damage on some pension funds that could take years to repair.

The upside. Trussonomics’ attempted comeback on the right may give Labour’s Keir Starmer much-needed cover to do the sensible thing in the middle, by fixing Britain’s trading relationship with Europe. To that end Starmer travels today to Paris, where President Macron has made no secret of his long-term goal of getting Britain back into the EU. Macron doesn’t speak for Starmer or Brussels, which has so far ruled out even revisiting the EU-UK Trade and Cooperation Agreement. But better to be talking in Paris than imitating Argentina.

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