I think Truss’s strategy was simply wrong. She put all her eggs in one basket and went for growth.
She wanted to achieve that growth by
a. Giving bribes to CEOs to entice them back to Britain after Brexit drove them away.
b. To give incentives through tax cuts to the top earners to entice them back and hopefully induce some investment.
The problem she was addressing was the huge black hole created by the extreme Tory Brexit. Firms have fled to Europe, the financial centre is collapsing. our output and investment are down. Our GDP has dropped over 4%.
They will never admit that Brexit is the cause, but it is.
She was banking on growth paying for the Public Services. Brexit has meant a huge hole in our finances which means we can’t afford the public services we have.
The markets looked at this huge amount of borrowing to give tens of billions to the wealthy and did not think it would work. They did not believe the wealthy would come back and they did not believe that they would invest. All they saw was a further massive hole in the budget and a major decline in the UK.
The instant, painless, answer to this problem is to rejoin the single market and customs union. A massive boost to trade, solves the skill shortage, boosts the economy and hey presto we have growth, investment and can pay for the public services without austerity and tax hikes.
My fear is that the damage has already been done. We’ve lost the financial centre. So many companies won’t come back or are already bust.
Brexit has been an unmitigated disaster that has sent the UK into terminal decline. We’re heading to be a basket case like Greece. The longer we leave it without addressing this problem the bigger our decline and the less possibility of clawing it back. Once a firm has left they’ve left for good. Too many have gone bust. Many of the skilled workers have gone elsewhere.
Each day that passes makes the matter worse.