Labour must break with economic orthodoxy – and fast

Rachel Reeves will learn the hard way that you cannot cut your way to growth

Photo: flickr.com / House of Commons

I was no fan of Liz Truss. The infamous mini-budget of September 2022 – which prioritised the interests of the rich during a cost-of-living crisis and eventually led to her defenestration – was, to a socialist like me, an iniquitous piece of work.

But I’ll say this about Truss. She recognised that economic orthodoxy – characterised by long years of anaemic growth, static productivity and falling living standards – had failed, and she resolved to do something about it. That meant trying something bold and different.

In a burning building, she was the person who said, ‘I think this door is the fire exit’ while others stayed put and waited for fate to intervene. Only the door she walked through led to the boiler room, and she ended up being overcome more quickly than anyone else.

The faceless markets got their way, and very quickly the ‘grown-ups’ were back in charge. Normal service – in the form of the old stodgy, technocratic order and its message that ‘There is no alternative’ – had been resumed.