While the pound plummeted along with Tory poll ratings last week, there was one obscure winner from the government’s disastrous “mini-budget”.
Liz Truss’s and Kwasi Kwarteng’s 2012 free-market treatise Britannia Unchained has shot up the sales charts, hitting the top spot on Amazon rankings for books on “economic conditions”. It costs £19.55 for the paperback.
“The key is to make sure that failure is survivable,” is one of the book’s insights. “In the early stages of a project, failure need not be a disaster.”
This is likely to provide scant consolation to Tory MPs facing the threat of losing their seats at the next election. Nor is the rest of the book, which notoriously labels Britons “among the worst idlers in the world”. Britannia Unchained is a free marketeers’ blueprint for an assault on tax, regulation and what are described as the “perks” of the welfare state. It is co-authored by three other Tory MPs: Priti Patel, Dominic Raab and Chris Skidmore.
The book was published the year after Truss set up the Free Enterprise Group, which was in effect a parliamentary outpost of the Institute of Economic Affairs (IEA), the free market thinktank based in Westminster.
The successor to Truss’s Free Enterprise Group, the Free Market Forum, has floated ideas from scrapping corporation tax to withdrawing free childcare for three and four-year-olds.
Two weeks before the mini-budget, Mark Littlewood, director of the IEA, told the Politico website he hoped Truss’s new government would go “fairly gangbusters” in its mini-budget. He wasn’t disappointed.
The disastrous economic aftermath and the withdrawal of hundreds of mortgage deals has renewed focus on the IEA’s influence in government. Ruth Porter, deputy chief of staff in Downing Street, is a former communications director at the IEA, and Littlewood is on a government strategic trade advisory group. A trio of economic advisers, Professor Patrick Minford, Julian Jessop and Gerard Lyons, who have helped shape Truss’s policies all have links to the IEA. Minford is a trustee, Jessop is an economics fellow and Lyons is an IEA author. Littlewood has said he considers Truss has spoken at more IEA events than any other politician over the past 12 years.
Littlewood, who was at Oxford University with Truss, rejected any suggestion of undue influence this weekend. He said: “I wasn’t consulted at all about the mini-budget. I don’t consider myself to be in a particularly privileged position. We are interested in promoting and explaining free market ideas.
“We consider that overall taxes are too high and the state has too big a role in our lives. Liz would probably see the world that way, anyway.”
The IEA describes itself as the “UK’s original free-market thinktank”. Its income last year was about £2.3m, with about half of its funding coming from individuals and small businesses. It has faced criticism for advocating deregulation while failing to fully disclose support from corporate supporters, which have included BP, British American Tobacco and Tate & Lyle. The IEA says it respects the privacy of its donors.
It is among a cluster of organisations in the narrow Georgian-terraced streets around Westminster that have helped shape Conservative party policy in recent years. These include the Taxpayers’ Alliance, which says its mission is to “speak up for British taxpayers”.
The offices of the Taxpayers’ Alliance are at 55 Tufton Street, a well-known address in political circles which is also the base of the climate-sceptic thinktank the Global Warming Policy Foundation. The Georgian townhouse also previously housed the Vote Leave campaign. The property is owned by Specmat, a manufacturing technology company based in Herefordshire. The firm is party owned by the businessman Richard Smith, who has previously donated to the Conservative party.
Some of the economic theories long discussed in these Westminster offices are now being implemented at Downing Street. The IEA has said its role is to “think the unthinkable”, but MPs are now concerned such ideas are being implemented by No 10.
Littlewood believes Truss will survive the political crisis. He said: “I’ve always found her incredibly calm under fire. She’s not a woman prone to panic, but I doubt she’s punching the air over the week she’s had.”
He said he welcomed a government that recognised that there was too much tax and regulation, but said the government position had not been properly communicated. He said experts at the IEA had been critical of the “general lack of spending constraint”.
Britannia Unchained also contains a prescient warning. “Government spending has to be responsible, or an economy will suffer in both the short and long run,” it says.
“Governments that lose control of their finances eventually lose control of their destiny.”
