Yesterday we published Lord Frost’s admirably forthright interview with Triggernometry and promised key transcript excerpts today.
I have headed them according to broad subject topics but would like to highlight, in view of yesterday’s spineless and misjudged U-turn by the Prime Minister in face of egregious bullying, not least by members of her own party, that Lord Frost was adamant in this interview that Kwasi Kwarteng’s tax cutting mini-Budget was ‘absolutely the right thing to do’.
What many of us believe, Lord Frost, to also be the right thing to do – indeed essential to do – is to abandon the perverse Net Zero target altogether and replace it with a responsible and efficient energy security policy, remembering that energy’s provision and delivery works on physics, not on ideology.
On the future of the Conservative Party
Lord Frost: So I think, you know, the politics has changed over the last ten years or so. And as many people have said, it isn’t just about economics any more. It’s about culture and, you know, shorthand ‘wokeism’, though I hate the word . . . I hate it partly because I don’t see how a past participle can become an abstract noun, that’s why I just sort of react against that. But, so, it’s got more complicated. And what I hear people saying is that it is a possible position for the Conservative Party to be in, to be sort of anti-woke in culture, but quite statist and left-wing on economic policy, because we’ve taken Red Wall seats and people who used to vote Labour. And I think my view is that’s a fallacy. It’s a fallacy for two reasons. One, because people who vote Conservative, I think, one should assume they actually want Conservative policies until it’s kind of proved otherwise. Second, I think the choice . . . these are different kinds of choices. The choice between sort of wokeism and non-wokeism, if you like, is a kind of political choice. You know, I happen to think one is better than the other, but it’s basically about your worldview and how you want society to run. The choice between: do you have free market economic policies or do you have more statist economic policies is a real world thing. We know in the real world, free market policies tend to produce more prosperity, more growth, better outcomes than others. So if you just look at this as a political thing and say, you know, the way politics has evolved means that it’s sensible for us, as a Conservative Party, to take on left-wing policies, you’re actually condemning yourself to ideological and actual defeat, because you’re choosing an economy that isn’t going to grow as fast, and people are not going to like that. So that’s why I think politics is about persuasion. Politics is about encouraging people to, you know, kind of take on your worldview. And we should be standing up for free market liberal policies, focused on growth, focused on productivity, focused on the productive capacity of this country and persuading people they are the best policies. And I hope we’re beginning to do that now, actually.
So, I think, the people who voted Conservative in those seats, yes, it was partly about Brexit and Brexit was a way of . . . it was important to a lot of people, rightly so, but I think it was also the thing that sort of tipped people over from realising that, actually, maybe they weren’t really Labour voters, they were doing it for historical, traditional other reasons, but when they looked at what they actually valued and how they saw the world, maybe they were really Conservatives. And Brexit enabled them to kind of recognise that. And, you know, we shouldn’t forget that Mrs Thatcher won a lot of Red Wall seats in 1983. She held on to them in 1987. It’s not quite as new as some people say that we’ve had these supporters. And she won them with an appeal to the free market, running your own life, freeing yourself from the shackles of state housing and state benefits, people telling you what to do all the time. And I think that appeal is just as strong nowadays. And we need to lean into it and bring people into that supporter group, not be embarrassed about it.
I’m the last person to defend the economic record of the last couple of years. I think it’s well known that I resigned, in part, because of it. I think, you know, we are . . . people make the comparison with the 1970s quite often. And I think one of the reasons that’s correct is that it’s the end of an era. You know, the last 20, 25 years of doing things is coming to an end. And people are, you know, they’re responding in different ways. But I think a lot of people feel that. And what we’re seeing is that this collectivism, this statism, has been reinforced by the bailouts from the crash, by the lifestyle politics imposed by climate politics, and then by the pandemic. And all of that has reinforced the sense that statism is the right way to go, government telling you what to do is the right way to go. And we’ve got to stop that. The state is bigger than it’s ever been in this country. You know, government rules, influence over your own behaviour has become stronger and stronger and it must stop. In a free society, you’ve got to call a halt to this at some point . . .
Well, I mean, ideally you would be doing this at the start of a four or five-year term. And for reasons we know about, that hasn’t been possible. There’s only two years or so left. But, you know, I still think you’ve got to do the right things. If we’re going to go down to defeat, let’s at least do it having had the argument, done what we said was the right thing, tried to persuade people, rather than half-heartedly doing things that we don’t really believe in, in the belief that it might keep everybody happy. People can recognise intellectual confidence and authenticity, I think. And it appeals to people. So let’s lean into that. Let’s do the things we believe in and believe will work. And I think they will work. I think two years is long enough to start seeing some of the results of this, but we have to have intellectual confidence. We have to start talking about the role of profits, the role of a normal interest rate in a capitalist economy, the things that make it work and be honest about this, not be embarrassed about it.
Liz Truss, the team, have got to have intellectual confidence and be honest about the mistakes that were made in the last couple of years, be honest about where things have gone wrong, be clear that things are going to a different direction, say, ‘Judge us in a couple of years. If you don’t like it, obviously there is another route.’ But to be clear, make sure people understand what we’re trying to do and why and what the goal is – I think that’s the crucial thing at the moment. People are just not being talked to honestly, for so long, about things and we can change that.
On the tax-cutting mini-Budget
Yeah, I think it’s absolutely the right thing to do. We must get things . . . we must get the economy on to a different path. We’ve got to change expectations. Yes, there’s going to be an uplift in borrowing in the short run. But we must get people thinking that we are trying to improve the productive capacity of this economy. We’ve got to get investors, people who look at this country saying, ‘Yeah, the Brits get it, they can’t do everything straightaway, but they understand what needs to be done and they’re getting on the right path.’ And there needs to be that sort of psychological shock, change of expectations, belief, things can get better. And I think that’s what the Chancellor was trying to deliver today. I actually believe that, you know, in the capitalist economy, you need interest rates that are above zero, I think they are going to have to go up further, not just to control inflation, but because that’s how the economy works. We probably are going to have to see a lower pound, because that’s . . . we need to be on a different forward curve. And to support the economy, it’s right to do a bit of borrowing and tax cuts so that demand doesn’t collapse. And I think this is a perfectly rational way forward and all the sort of world-weary economists who are out there saying, ‘What about borrowing? What about this? What about that? It’s irresponsible. What do the Treasury officials think of it all?’ I just think that is . . . they’re still talking a story that is irrelevant to the challenges that face the country after Brexit and in this new world.
It can only be the first step. You know, this is about changing expectations and making people believe that things can be better, and the economy can improve. I think the government has announced today some improvements to – or at least the prospect of some improvements – to infrastructure, getting it through quicker, let’s see what that looks like. It is really important. Obviously, the housing market is a massive, massive problem in this country. And, you know, it’s a huge part of the productivity problem, I think, not being able to move house, is obviously part and parcel of that. We’re going to have to build more houses. There’s no two ways around that. We’re going to have to build houses in places where people don’t want houses to be built. We’re going to have to find a way of making that possible. I think it is more possible than people believe, but it’s going to have to be done.
I don’t necessarily think it’s going to happen, like, tomorrow, because sequencing is important and getting people used to ideas is important. And I think one of the problems we’ve had, actually, one of the consequences of this sort of collectivism over the last 20 years, is the people have not been prepared for the scale of the challenge that has to come. We’ve not talked about how market economies work. We’ve not talked about what that means for your own individual prospects, how you have to prepare yourself, how you have to skill, you know, all this sort of thing, we’ve just not talked about it. So you can’t, I think, suddenly land people with a million things that are a completely different world view and expect people to put up with it. We have to allow some time for persuasion, for getting people used to ideas, for testing things and showing that, actually, it isn’t so bad, maybe, when you do this – hopefully fracking, for example, is going to be one of those things – and gradually change the debate. So you shouldn’t rush at everything. I think the crucial thing is also to have a really convincing manifesto for the next election that is based on a real story, for which you can get a real mandate to do some, actually, difficult things. And some of that you’ve got to prepare for, you can’t just do it all straight away.
On how the economy should be managed better
That people make better choices for themselves. Obviously you need a framework and the state sets the framework. But, basically, people know better themselves what they want to do and how they want to live their lives and where they want to spend their money and what they want to spend it on than the government does. And where the government tries to do it, it tends to get it wrong. It imposes its own judgments on people. It makes them do things they wouldn’t otherwise choose to do. It accepts . . . it sets up a single view of ‘the good society’ which you’re forced to buy into, and you have to live by the government rules. And I think that, historically, has been shown not to work where it’s been tried. Now, you know, nobody’s going to try it in extreme forms in this country, although, you know, during the pandemic, there were some quite extreme things happening. But if you allow people to make their own decisions, you know, accumulate money for themselves and their families, live their lives as they want to, they’ll make better decisions. They’ll invest. They’ll become more prosperous. That’s the fundamental core, I think, of this.
Everybody would agree that the state should be generous to people who can’t work for whatever reason it is. The problem is that we have, over the years, got a state system that is much more generous than that. And that’s kind of undermining support for it, and for a lot of people. The Universal Credit system, for example, you can claim Universal Credit if you’re on the average wage. And in what sense is that a kind of benefit for people who can’t help themselves? It’s a big, complex system that funnels money from one part of the economy to another, and in so doing it’s undermining support for state transfers as a whole, it’s making people who have no need to be dependent upon the state. Of course we must help people who can’t help themselves. The government’s actually not very good at that, it seems to me in many ways, and focusing on that would be a better thing to do. You know, people have forgotten, I think, that the state is the biggest it’s ever been. We can’t continue to see the state growing and growing and growing because we think it’s the right thing to do. You have to draw a line somewhere and focus the state back down on its core tasks. Under Tony Blair, the state was 5 per cent of GDP smaller than now. Everyone seems to think Tony Blair-time was quite a good time. And you know, people who I don’t agree with politically quite liked it, and, you know, life went on, even though the state was a lot smaller. You can get it smaller. You can focus down on the core tasks.
On whether the NHS works
It doesn’t. Or it works in a very sort of crude, inefficient fashion. And that’s what you get when you’ve got one and a half million people and a budget of £160billion a year, all run from the centre. Inevitably you get these outcomes. And I mean, I’m encouraged that, I think for the first time in my political life I suppose, we’re beginning to hear people say, ‘Actually, this isn’t working very well. I don’t like it that I can’t get to my GP. I don’t like the fact there’s a waiting list. Every time, when I go into hospital, I see a different person every day. They lose my papers. I’m not confident they’re giving me the right drugs.’ You hear this kind of all the time from people’s day to day experience. And there’s only so long, I think, that people can hold the day to day experience in parallel with the sort of religious belief about the system. In the end, one undermines the other. And I hope we’re beginning to see that. I think, actually, also people have, you know, lots of people have got experience of the European systems now, whether they live in Europe or have visited it. They’ve seen what it’s like to get treatment somewhere other than the NHS, and they don’t think it’s that bad, necessarily. And I think it’s beginning to kind of permeate through. So the problem is that you can’t change the NHS overnight. You know, it is the task of a generation, really, to change this monolith. You’ve got to start somewhere, you’ve got to stop adding new tasks. You should take off some of the sort of frivolities, that people should pay for themselves. And I think, gradually, you’ve got to try and bring in some sort of market insurance elements at the margins, probably, first, and get it working in a more functional way. But that’s going to take 20 years, if you started today, I think, and that’s why people shy away.
What he means by ‘frivolities’
Well, sort of lifestyle surgery, maybe, you know, I don’t know, some people would say IVF, for example, people should pay for themselves. I mean, I think there’s a debate to be had about that. But I think all, at the moment, all the pressure is the other way that, you know, new kind of things get added into NHS treatment all the time. And, again, you’ve got to draw the line somewhere. I’m not making a direct comparison here, but if you look at, like, veterinary services, for example, a completely private service obviously, and nobody’s suggesting we should do that, but there is no shortage. You can get to see a vet tomorrow, because the market works. And in the NHS, we have no market, meaningfully, at all. The only sorting system is by queue and that’s what happens. So you’ve got to try and bring elements of rationality into it, I think.
I think there is always this artificial comparison made between . . . as if the only two models are our model and the US model. And you know, it bedevils the debate we have on this. Actually, you know, people need to get that we are the outlier. Hardly anybody runs their health service like we do with virtually everything being delivered by government. The only countries that do are the Scandinavians and the Irish, much smaller countries where you don’t have this sort of massive monolith problem that we do in the UK, that’s ten times as big. The norm in an advanced country is to have some sort of social insurance system, quite a lot of competition, quite a lot of private provision in the system, and a lot more patients and consumer choice. That is the international norm across Europe. And we could go there.
What we’re seeing at the moment, I think – and we’ve seen quite a lot in the last year or two – is that we’re getting two systems in this country. We’ve got the NHS that doesn’t work, and then you’ve got a completely private system which is totally separated from it. There’s no sort of tax benefit or any other kind, it’s entirely for people who’ve got the ability to pay for it. However, you do get treatment quickly. The way the most of the European systems work – and they’re all kind of different, so there’s no single model – but that there is a sort of compulsory insurance element. You know, you join maybe one of a number of insurance schemes, you can choose the level at which you go into these schemes. Quite a lot of the provision is contracted for by these schemes, or sometimes by the government, private clinics, private doctors, whatever. But the whole system is backed up by the government. It’s still largely free at the point of use, but it’s not run by the government. And there’s much more efficiency in the way treatment happens. And, you know, you simply – apart from the special case after the pandemic – you simply don’t get these sort of massive waiting lists in many European countries that we do here. And if people understood that, I think they’d be more open to it.
So I think it is really important, first of all, that the state works properly – and this is one of the areas where it needs to work properly. So although I’m often caricatured as a, kind of, you know, I’m a crazed free marketeer of some kind, actually, I think it is really important to see the two things in parallel. The private economy, the market economy, needs to work in a free market way. But the state also needs to work properly and be properly funded. And that means things like controlling the borders properly. It means proper law and order, police on the streets, a justice system that works, and prisons that aren’t a sort of disgrace, frankly, to a civilised society. It means benefits working properly in the way that we were talking about earlier. So, you know, there definitely is a big role for a state. The problem is, again, it’s taking on more and more kind of frivolous tasks the whole time, getting distracted from its core duties. And that’s what it’s got to do. So that’s the context. And on the immigration thing, I mean, I think immigration must come down. It’s not sort of straightforward to look at this year on year, because you don’t control the number of people who leave the country for one thing. So they’re always, kind of, you know, the graph will always vary year on year, it’s the overall trend you’ve got to look at. The truth is our economy has benefited from or has . . . we’ve developed an economic model that’s been based on lots of cheap labour from Europe for the last 20, 25 years. You can’t turn that off overnight. I don’t think we should turn that off overnight, given there’s so many other economic problems going on. But I do think we have to set a trajectory that is down, and be clear that it’s going to go down, and set that in a credible way. And the problem, again, at the moment, is that over the last year, we’ve talked tough about immigration, but actually the numbers, if anything, have gone up. I think it’s not entirely clear, because, of course, not every European would have shown up in the system beforehand. But nevertheless, it remains high. And it has to come down. We have to move to a different model, where business adjusts to the fact that there isn’t an indefinite supply of free labour and invests in the people they’ve got. But that is going to take a bit of time.
And there is the practical problem that when people are coming over in small, unseaworthy boats, kind of common humanity means you’re going to handle them in a certain way. The French won’t take them back, therefore you end up having to bring them into the UK, where they’re then surrounded by the panoply of legal protections, judicial reviews, the amateurish and slow way we run our asylum system that produces an incentive to come here and risk it. So there are lots of things that need changing. I think the government is going to have to get more robust on this. I think it’s going to have to say, you know, ‘If you come here illegally, you don’t get the right to stay.’ You have to work out what the consequences of that are. And I think it’s going to have to take on the ECHR issue. The ECHR, Convention on Human Rights is part of the . . . it’s the ultimate reason why there are so many legal challenges, so many problems in the legal framework that we’ve got. And I think we’re going to have to try and cut through that in some way in the next couple of years. I can’t see how we can solve this problem without doing that.
On the future of the two-party system
Every country’s sort of political system is determined by stuff that’s quite deep in the way the country works. And I don’t think you can just change bits of it without having all kinds of unintended consequences. I mean, the Fixed Term Parliament Act is a good example of that, where it was a bit bolted on from a PR-type system and it never worked. And in the end, we’ve had to get rid of it. I mean, I think the advantages of our system . . . so, a short version is, yes, I think it can and should survive. The advantage of it is that it forces parties to be coalitions themselves. They can’t become so ideological and, you know, just respond to a very small niche of people. They have to have these sort of debates. And the single member constituency means people don’t get . . . you know, it’s not possible to get completely out of touch with what people are thinking in the way that in some of the European PR systems, where you’re on a list and you never meet an ordinary voter, you just sort of lose touch. So I think, you know, every system has the problems of its advantages, but I think ours is the right one for us . . .
UKIP, arguably, took enough out of the Conservative vote to force the referendum, when it was announced in 2013. So, yeah, they have a function in the system but, I don’t think . . . I still think it’s better for democracy to have, you know, a couple of big parties that represent different world views. The problem with the system is when you got two parties that think the same thing about important issues – like climate change is the obvious example recently, or to a large extent the pandemic – then there’s no debate. That’s the problem. So they have got to represent different views about things properly.
On abandoning Net Zero
I doubt it, because it’s pretty well-embedded as a target now, 2050. But I do think that, you know, a lot of people think that we’re rushing at it too fast and doing it in a way that, you know, makes no sense, that just deprives us of actual energy to power our economy. And, you know, going at it in a way where government picks the route, you know, and all this sort of stuff about heat pumps and electric cars and all this kind of thing. You know, government picking winners never works. If you’re going to do this, the rational way would be to have a carbon tax and just increase it a bit every year and let the market sort out what the best way of doing it was. I don’t know whether we’ll do that. But I think we will see much more focus on energy security, on energy cost, than on the so-called climate impact. I mean, I just don’t think we’re in a climate emergency. So I don’t think this thing is as urgent as people say.
On Britain’s role in that world and defence
It’s the cliche, you know, we lost an empire, we didn’t find a role. Now we’ve lost the European Union and we’re still looking around for a kind of international role. I think we tend to underplay ourselves as a country. I think people look at Britain from the outside much than we realise.
We are still a pretty big economy. We still stand for some important things. I think our . . . you know, I think it should be about resilience to a very large extent. We’re going to have to push up defence spending. We’re going to have to try and revive Nato properly as a sort of serious security and defence organisation. We’ve got things like the AUKUS pact with the Australians and the Indo-Pacific tilt, that I think is going to be important as we sort of try and deter China. I think we, you know, one of the things that I find people do react against a bit is, you know, we can be a bit preachy about things. And I kind of . . . I don’t like our embassies going, you know, sort of endlessly going on demonstrations about this and that fashionable cause. I think, you know, you’ve got to look at the world as it a bit and, you know, sometimes that means dealing with people who you don’t necessarily like very much or approve of everything they do, but they’ve got stuff that you need, so you’ve got to . . . that’s just the way the world is. So a bit more realism about the world, a bit less preachiness, but, you know, a bit sort of standing up for things that we believe in. I think Britain is a force for good, but we’ve got to put the money into showing that, I would say. And that’s just beginning really, this new role.
On how we unify the country
I think one of the consequences of, you know, the fact that people in their twenties, thirties, maybe even forties don’t have a stake in society, you know, don’t have a house, maybe defer having kids till they’re a bit later, this sort of thing, is that they can sort of live in a world of kind of illusions of, you know, how the world is and how it works, for a bit longer than they used to be able to. And that is part of what we’re seeing. You know, there’s a kind of, sort of, fantasy world being created about how it works and how we got here and what is important to Western civilisation and an advanced economy. And you know, I actually think it’s time for the government and people like us to be, you know, even more assertive about that . . .
It’s gone very deeply. And you know, one of the . . . this whole sort of assault on Western culture and history and so on, one of the questions I asked myself and I haven’t heard people answer is: why is it happening? What has driven it? How has it got to this point? And I see, you know, there are kind of two answers, I think. One is that there’s a bunch of, sort of, cultural Marxists, you know, going through the institutions trying to destroy Western society in the universities and so on. And the other is that this is just liberalism, sort of, pushed to its nth degree – as you knock over one taboo, you look for another taboo. In order to stop that looking kind of absurd, you have to create this sort of alternative reality, so that things don’t look absurd. And there is . . . the Emperor’s New Clothes thing can survive. And I think that’s actually more what we’re seeing, that the kind of liberalism, social liberalism that, you know, kind of started in the 60s, in universities, in the intellectual classes, has just been pushed and pushed and pushed so that there are no taboos left. And that doesn’t mean it was wrong to do what happened in the 60s, but it does mean the sensible people have got to say, ‘You’re pushing this too far. The world isn’t like this – it’s like this.’ And just be more honest about that.
I think there is far too great an acceptance that the country has divided up, or is divided up into four different units. We’re in a sort of confederation, because it’s kind of convenient to everybody, but it could be different, I mean, where we should let Scotland and Wales kind of do their own thing and not worry too much about it. And, you know, I think it’s hard to get people in England to kind of care about what’s happening in Scotland, and increasingly in Wales, which seems to be going down the same road now. And I think we’ve got to have an honest conversation about, you know, where devolution has taken us, is undermining the kind of unity of this nation state. And, you know, you go to Germany, you go to France, go to Italy. They would regard the kind of debate we have about, you know, the different components of this country as entirely bizarre. You know, the idea you could just detach and go a different way would be quite wrong. So I think we need, you know, it’s very difficult, people don’t like . . . every time you sort of tell the SNP or the Welsh Labour Party they can’t be like this, you get a sort of torrent of pushback, but we’ve got to start having this conversation again. This is a unitary nation state. Devolution is one thing and path to independence is a different thing. And you’ve got to start pulling it back together again. It was incredible to me that we essentially devolved our travel policy, who could come in and out of the country, during the pandemic to the Scottish and Welsh governments, who seemed to be allowed to do their own thing. Nobody thought that was what devolution was about and it shouldn’t be what it’s about. And we’ve got to pull that back. It will be very uncomfortable, but I think it needs to be done.