Jeremy's Blog 23rd September 2022: Government - A Change in the Wind
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 22nd September 2022
As normal business resumes after the powerful commemoration and funeral of the late Queen, the Liz Truss Government brings a strong sense of a change in the wind.
While all Conservative, each new Prime Minister since 2010 has set a very different tone infusing the operation of government This Government swiftly signalled a new course set by the stars of lower taxes (and in that tolerant of increased debt) and reduced regulation with the goal of achieving again the level of growth seen before the 2007–8 financial crisis. Such growth is needed for the public to have the services it wants. The argument may be about the means, whether the real drivers of productivity are tackled and the exposure to debt when more shocks may yet come.
With little more than 27 months to the last possible date for the next election and still firefighting external shocks, the Prime Minister has declared herself prepared to be unpopular, saying:
“We do have to take difficult decisions to get our economy right.” (Times, 21st September)
The tone is clear and unabashed, and to be set swiftly by the “financial statement” promised for the day after this e-Briefing. That is needed to frame and explain the Government’s purpose, giving the leadership necessary for hard times.
The new Chancellor, Kwasi Kwarteng put it thus:
“We need to be decisive and do things differently. That means relentlessly focusing on how we unlock business investment and grow the size of the British economy, rather than how we redistribute what’s left.” (Press Release, 7th September)
There are indications that his statement will go wider than reversing recent tax rises, cutting taxes further and easing regulation, potentially including planning and environmental constraints. Some aspects of this would be UK-wide; more, such as many regulatory changes, England-only.
The new energy packages only limit further price rises. Their cost now dwarfs that of the discussed tax cuts with no knowledge of when lower energy prices might remove their need. As these debts and their cost accumulate, will the economic reforms prove to be the locomotive to pull this round, to stop us becoming a poorer nation?
Emergency legislation for the energy costs relief packages looks to displace the present Energy Bill. With the focus on achieving a level of growth not seen for 15 years, the Truss Government’s wider legislative priorities have yet to be set but, with the primacy given to growth, may change from those inherited. Climate change and other environmental questions bulk large for this. The Johnson government was the greenest yet and has set much in statute, while the new review on managing the net zero goal in conjunction with growth is chaired by someone committed to that.
Agriculture has had an unusual period of continuity in policy development and administration. With its own productivity handicap after 30 years of area payments, it is already embarked on the move to unsubsidised businesses with the major structural changes that must flow from that. Farmers can then consider the options offered by government on their merits. With Wales and now Scotland (expecting “cultural change” and “transformation”) outlining their paths for this, we wait for DEFRA’s new ministers to indicate how a deregulatory government will take England’s Transition Plan forward. In this new wind, the moral remains the same: farmers should look to the successful management of their own businesses, not see government aid as an entitlement.