Liz Truss entered Downing Street on Tuesday 6th September with possibly the most daunting job of any Prime Minister since the Second World War. With a maximum of two years until the next election, she has to kick-start growth, reform failing public services, tackle soaring energy prices and stabilise Britain’s place in the world after the trauma of Brexit.
Only two days in and she had another, wholly unexpected yet equally difficult challenge: leading the nation in mourning the loss of Queen Elizabeth II, a task that would stretch any leader, let alone one in office for a matter of hours.
Inevitably, the passing of the Queen will postpone the launch of the Prime Minister’s economic plan as we go into the period of mourning. But when the moment does come, I for one will give her all my support and encouragement in making it a success. It is a bold and admirable plan: driving growth through free market solutions and tax cuts to raise enough capital to fund public spending commitments down the line.
‘Trussonomics’ as it is now called, represents a dramatic break from the policies of the last few years, which have combined borrowing with tax hikes to make ends meet. However, the government must remember the vital role that targeted investment can play in empowering charging business and spurring growth; and this is what will provide the best opportunity for economic upturn.
While Truss was appointing her new Cabinet earlier last week, leading businesses from the East of England were also meeting in Whitehall to discuss the issues that are curtailing growth in our, and her, region. The newly formed Board of the Eastern Powerhouse, which I Chair, identified a number of areas in dire need of funding, including road, rail, fibre broadband, education, energy and health.
Later that evening, we were joined by eleven regional MPs and Peers, who rowed in behind our call for parity in investment between the East and other UK regions.
The East receives 40 per cent less Levelling-Up funding than other parts of the UK. In 2020/21, local transport spending was £678 per head compared to the national average of £737. The East also has the lowest health spend per capita (£2,974 compared with £3,271 nationally) and lower-than-average education spend (£1,357 compared with £1,428).
It’s clear the East needs more targeted investment than it is currently getting. Only a few short weeks ago, this seemed a forlorn request. But with a Prime Minister and five additional Cabinet members all representing seats in the East, those of us who have long championed the region feel newly energised and optimistic.
Of course, we recognise that representation around the Cabinet table alone is not going to swing it; it is the strength of the economic case that will persuade the Prime Minister and colleagues to focus on their political heartland.
However, the message from our meeting was clear: more than any other region, the East can make Trussonomics a success and deliver real growth. However, to do so, it will need the same level of political and economic support as the other regions enjoy. That’s all. Our businesses will take it from there.
Happily, the economic case is irrefutable: moderate levels of investment there will generate considerable net gains for the country as a whole, and more than other parts of the UK. In other words, investment in the East would deliver the greatest returns for the lowest levels of public investment.
The Eastern Powerhouse has calculated that, if investment in the East were brought to the same level as the South-East excluding London, it would deliver an extra £31.2bn a year in GDP. That would mean £11.5bn of additional tax-take for the Exchequer; and an annual increase in disposable income of £3,100 for every Eastern resident.
This is a huge open goal for a Prime Minister who has hinged her premiership on an economic strategy which emphasises net economic growth. Unlocking this growth will require the government to ‘Look East’ to level up the country; and the same recognition and engagement for the Eastern Powerhouse as its equivalents in the North, Midlands and West receive.
We have a Prime Minister who knows the East well; Cabinet members who recognise the potential of the region better than anyone; and a new business-led Powerhouse that is making the case for regional parity.
To make Trussonomics a success, the Prime Minister needs to tap the growth potential right on her doorstep.