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Fears over cost of living ‘solutions’ proposed by Truss-backed think tanks

MP says Truss could be a ‘puppet’ for right-wing groups that have already generated a dozen of her policies

Adam Bychawski
1 September 2022, 1.10pm

Liz Truss at the final hustings of the Tory party leadership race

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Imageplotter / Alamy Live News

The secretive think tanks behind more than a dozen of Liz Truss’s campaign pledges have proposed cost of living solutions including scrapping childcare regulations, abandoning net zero, allowing AI to diagnose patients and abolishing the energy price cap altogether.

Between them, the Truss-backed think tanks have also lobbied against a windfall tax on gas and oil companies, called for a windfall tax on renewables firms instead, and urged ministers to cut taxes rather than provide further support for those who will struggle with soaring bills this winter.

Analysis by openDemocracy has identified a string of Truss policies and campaign staff originating from the Institute of Economic Affairs (IEA), the Adam Smith Institute and the Centre for Policy Studies.

MPs and campaigners have raised the alarm about Truss’s closeness to the groups, saying a government led by the Conservative frontrunner would be a “puppet” for the organisations.

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Truss is particularly close to the IEA, having founded its parliamentary wing FREER in 2011 and hired its former communications director to run her campaign.

Her policies to scrap the planned rise in corporation tax, crack down on the right to strike, review inheritance tax, loosen financial solvency regulation and deregulate the childcare sector were all first proposed by the IEA.

None of the think tanks discloses its funders, but the IEA has received donations from BP and ExxonMobil and, along with the Adam Smith Institute and the Centre for Policy Studies, the tobacco industry. The IEA and the Adam Smith Institute have also received millions of dollars from US funders of climate denial.

SNP MP Deidre Brock said that Truss lifting a number of her policies from the think tanks “raises worrying questions about the functioning of our democracy, the impact of dark money on UK politics and the allegiances of Boris Johnson’s potential successor”.

“Liz Truss must immediately answer concerns about her close personal connections with these organisations and the lack of transparency around their donors,” she said.

The Labour MP Clive Lewis added: “Truss being a puppet for dark money interests is, unfortunately, the rule of how British politics is done, and not an exception to it.

“The government has the power and tools needed to address the cost of living crisis – for example, through extending the windfall tax, nationalising utilities, funding a mass home retrofit, and establishing universal basic income and services.

“The only reason such a programme will not be delivered is because it will not favour the private interests who are benefiting from the cost of living crisis, such as the funders of dark money think tanks that appear to be driving the incoming Truss government’s agenda.”

Charities campaigning for increases to Universal Credit in response to the cost of living crisis have condemned the IEA after it referred to them as a “poverty lobby” in July and dismissed benefits aimed at alleviating poverty as “handouts”.

Neil Cowan, policy and campaigner manager at the Poverty Alliance, said that anyone opposing an anti-poverty campaign is the "real poverty lobby".

“People in the UK believe in justice and compassion,” he said. “They believe everyone has a right to a dignified, secure life. Putting those values into practice is not difficult – business can pay people a real living wage, and social security can be strengthened to keep people out of the grip of poverty.

“Anyone opposed to those policies is opposed to freedom, dignity, compassion, and justice.”

Truss being a puppet for dark money interests is, unfortunately, the rule of how British politics is done

Clive Lewis, Labour MP

The IEA’s list of policy prescriptions to address the cost of living crisis, published in July, pushed for a windfall tax on the renewables industry and an end to the UK’s target to cut net greenhouse gas emissions to zero by 2050.

“A serious approach would stop putting Net Zero targets at the heart of policy, preferring instead efforts to align market carbon prices internally and with our industrial peers,” writes its chief operating officer and energy analyst Andy Mayer.

The IEA’s former deputy research director Richard Wellings was criticised last week after saying pensioners could burn “wood, old books etc” to stay warm.

The think tank also called for removing or reducing regulatory requirements on nurseries, which include regular inspections by the education watchdog Ofsted.

Helen Donohoe, policy manager at the Professional Association for Childcare and Early Years, said the proposals were a “reductive hash of already rejected ideas”.

“The prospect of these proposals reaching anything like a serious discussion in government is eye-wateringly worrying,” she said. “For early years and childcare they represent a surrender of all that we have gained, for children and for parents, in the name of shoddily substantiated claims to cutting costs.”

Truss’ pledges to end the ban on fracking and reduce the size of the government have been lobbied for by the Adam Smith Institute, where her longest-serving special adviser previously worked.

Meanwhile, her plan to create free ports and “full-fat” investment zones – where business rates and regulation are suspended altogether – echo the Centre For Policy Studies’ 2019 proposal to create “opportunity zones”. Her vow to scrap green levies from energy bills was also first called for by the think tank in May.

Another of Truss’ advisors previously worked for the CPS and she has regularly given speeches at the think tank, which was co-founded by Margaret Thatcher.

Campaigners say if Truss goes ahead with all three of the think tank’s tax plans it would mean “less money to support families, less cash for the NHS and social care”.

“This is a cost of living scandal. The last thing Liz Truss should do is cut taxes for the biggest most profitable companies while some people are choosing between heating and eating,” said Tax Justice’s executive director, Robert Palmer.

openDemocracy approached the Truss campaign for comment but it had not responded at the time of publication.


Update, 1 September 2022: This article was amended to make clear that Poverty Alliance had criticised anyone opposed to anti-poverty policies as "the real poverty lobby" rather than naming the IEA specifically.

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