Former PM Liz Truss makes her case for growth

Former Prime Minister Liz Truss has returned to Westminster with a bang this morning, launching her new ‘Growth Coalition’ from a building directly opposite the Treasury, a pointed decision after rubbing shoulders with their establishment thinking during her time in No10.

Ms Truss has brought together 13 leading economists from right across the world – the US, UK, Europe, Japan and South America – to help advise politicians in the G7 how to tackle the collective crisis of declining growth and falling GDP per capita.

While Liz Truss has assembled the group of pro-growth boffins, she did not take a leading role in this morning’s launch, sitting among fellow Tory MPs in the audience while the experts set out the problems facing both Britain and the economic west.

The assembled audience heard a gloomy prospect facing the G7, falling behind China and Indian growth rates, falling living standards and productivity.

The UK came under specific scrutiny and criticism, with one of the Growth Commission’s panel warning the country still hasn’t “got its mojo back” post-Covid.

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The commission economists said the British economy’s warning lights have been ‘flashing red for some time’, and claimed that at its current growth rates Poland’s economy could overtake the UK’s within the next 10 years.

They starkly pointed out that Britain’s economic predicament looks even worse when compared to America.

UK GDP per capita stands at £16,000 less than the US, with a £10,000 gap in annual spending power between the two.

Their paper pointed out that growth is, therefore, key to solving the current cost of living crisis.

“How many extra home improvements are Britons’ transatlantic cousins able to afford each year? How more regularly are they able to buy new cars and other consumer durables, take holidays or eat out together?”

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They predicted that if British political leaders were able to turn things around and get growth rates of just 3 percent a year – compared to the current 0.1 percent – that was achieved in the 1950s, the UK economy would be a whopping 65 percent bigger by 2040.

This is equivalent, they report, to nearly £15,000 more for each Brit to spend each year, and additional tax revenues of £670 billion to spend on both tax cuts and extra investment in public services.

It was, undeniably, a dry, serious affair, with little of the political flair usually accompanying Liz Truss’s public appearances.

The group said they will use their platform to analyse fiscal events using new economic modelling to those currently deployed both by the Treasury and the OBR, in order to better project the effects of certain policies 5, 10 and 20 years down the line.

For example a tax rise won’t merely be interpreted as bringing in ‘x’ amount of money to the Treasury coffers, but analyse the wider effect of the policy, how it may encourage reduced spending, earning and productivity.

Treasury orthodoxy came under fire, not just in Britain but foreign economic departments too.

One board member of the commission cited the time New Zealand signed a trade deal with China, the benefits of which the New Zealand treasury underestimated by 500 percent.

Ms Truss was accompanied to the event by key parliamentary allies like Lord Frost, Priti Patel and Ranil Jayawardena.

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