As the pound tumbled with Tory polls last week, there was an obscure winner from the government’s disastrous ‘mini-budget’.
2012 Treatise on the Free Market by Liz Truss and Kwasi Kwarteng Britannia unleashed skyrocketed the sales charts, reaching No. 1 on the Amazon rankings for books on “economic conditions.” It costs £19.55 for the paperback.
“The key is to make sure failure is survivable,” is one of the ideas in the book. “In the early stages of a project, failure is not necessarily a disaster.”
That is likely to be cold comfort to Tory MPs facing losing their seats in the next election. Nor is the rest of the book, which notoriously ranks Britons “among the worst idlers in the world”. Britannia unleashed is a plan by free marketers for an assault on taxation, regulation and what are described as the “benefits” 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 founded the Free Enterprise Group, which was effectively a parliamentary outpost of the Institute of Economic Affairs (IEA), the Westminster-based free market think tank.
The successor to Truss’ Free Enterprise Group, the Free Market Forum, has floated ideas ranging from scrapping corporation tax to scrapping free daycare for three- and four-year-olds.
Two weeks before the mini-budget, Mark Littlewood, director of the IEA, told the Politico website that he hoped the new Truss government would become “quite gangbusters” in its mini-budget. He was not disappointed.
The disastrous economic consequences and the withdrawal of hundreds of mortgage agreements have renewed attention on the IEA’s influence in government. Ruth Porter, deputy chief of staff at Downing Street, is a former director of communications at the IEA, and Littlewood is on a government advisory group on strategic trade. A trio of economic advisers, Professor Patrick Minford, Julian Jessop and Gerard Lyons, who helped shape Truss’ policies, all have ties to the IEA. Minford is a trustee, Jessop is an economics fellow, and Lyons is an IEA author. Littlewood said he considers Truss to have spoken at more IEA events than any other politician in the past 12 years.
Littlewood, who was at Oxford University with Truss, dismissed any suggestion of undue influence over the weekend. He said: “I was not consulted on the mini-budget at all. I don’t consider myself in a particularly privileged position. We are interested in promoting and explaining free market ideas.
“We consider that taxes are globally too high and that the state has too important a role in our lives. Liz would probably see the world that way anyway.
The IEA describes itself as ‘the UK’s premier free market think tank’. Its income last year was around £2.3million, with around half of its funding coming from individuals and small businesses. He has been criticized for advocating deregulation while failing to fully disclose the support of his supporters, which include BP, British American Tobacco and Tate & Lyle. The IEA claims to respect the privacy of its donors.
It is one of a group of organizations in the narrow terraced Georgian 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 on behalf of UK taxpayers’.
The offices of the Taxpayers’ Alliance are at 55 Tufton Street, a well-known address in political circles that is also the base of the climate-skeptical think tank Global Warming Policy Foundation. The Georgian townhouse was also previously home to the Vote Leave campaign. The property is owned by Specmat, a Herefordshire-based manufacturing technology company. The company is partly owned by businessman Richard Smith, who has previously donated to the Conservative Party.
Some of the economic theories long discussed in those Westminster offices are now being implemented in Downing Street. The IEA said its role was to ‘think the unthinkable’, but MPs now fear such ideas could be 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 given a hard time in the week she’s had.
He said he welcomed a government that recognized there were too many taxes and regulations, but said the government’s position had not been properly communicated. He said IEA experts had criticized “the general lack of spending restrictions”.
Britannia unleashed also contains a premonitory warning. “Government spending must be responsible, otherwise an economy will suffer in the short and long term,” he says.
“Governments that lose control of their finances eventually lose control of their destiny.”