Liz Truss blames the left establishment for the first intervention since she was sacked as PM
Truss won the Conservative leadership race after pledging to implement a low-tax, high-growth agenda.
After its mini-budget, the pound plummeted and the Bank of England was forced to take emergency action to calm the market turmoil. She reveals she has received the “strongest warning of all” from senior officials that further economic turmoil could leave Britain unable to fund its own debt.
Truss sacked Kwasi Kwarteng, her chancellor, and resigned as prime minister less than a week later, saying she no longer enjoyed the trust of her MPs.
She writes: “I still believe that it was the right thing to deliver the original political recipe with which I had fought the leadership election, but the forces against it were too great.”
“I’m not claiming blamelessness for what happened, but basically a very powerful economic establishment, coupled with a lack of political support, didn’t give me a realistic chance to impose my policies,” she says.
She recalls taking office assuming her “mandate would be respected and accepted”.
“How wrong I was,” she writes.
She condemned the Treasury Department’s “endemic” level of “pessimism and skepticism” about the growth potential of the UK economy.
And in a scathing indictment of the department, she reveals that in the run-up to the mini-budget, neither she nor Kwarteng highlighted any risks for pension funds that would trigger unprecedented volatility in the gilt market.
“At no point during the preparations for the mini-budget were any concerns raised by officials to me, the Chancellor, or any of our teams about liability-driven investments (LDIs) and the risk they pose to bond markets at the Treasury,” she says .
This is a significant omission, she argues, because this issue “would ultimately bring my tenure as Prime Minister to an abrupt and premature end due to the panic it would create.”
“It’s only now that I realize what a tricky powder keg we were dealing with with LDIs,” she adds.
Truss says her mini-budget has been “scapegoated” for problems that have been “brewing” for several months, including rising interest rates and mortgage costs, which had already been forecast to rise.
The former prime minister says that not only did she fight against domestic economic orthodoxy when she tried to challenge the “high spending, high tax” policy, but that she was also “swimming against the international tide”.
“There has been a concerted effort by international actors to challenge our plan for growth,” she says, citing statements by US President Joe Biden and comments from the International Monetary Fund (IMF).
Truss also criticizes her own party’s failure to champion lower taxes and deregulation, which meant “the foundations” for her radical economic agenda were not in place.
In an implied smack at the David Cameron, Theresa May and Boris Johnson governments, she says successive Conservative governments since 2010 have instead ‘triangulated’ with Labor policy.
“We haven’t done enough over the past decade to make the case for a lower-tax, more deregulated economy, which means the foundations of what I wanted to achieve were not laid,” she writes.
She claims she was “pushed waters uphill” because large sections of the public were “unfamiliar with the main arguments about fiscal and economic policy and sentiment had shifted to the left over time.”
Truss also says she was surprised at the reaction of other Tory MPs to her plans, citing the “excitement” at the announcement of abolishing the 45 percent income tax rate.
She defends her decision not to commission a forecast from OBR to go alongside the mini-budget, saying it would not have been “reasonable”.
Truss acknowledges that their communication “could have been better,” but adds that the public service machine was not “enthusiastic” about spreading messages “contrary to their orthodoxy.”
And she argues that ultimately, improving public messaging would not have changed the course of events. “While there are many ways the policy could be better communicated or adjusted to make it more acceptable, I have a hard time imagining how this would have changed the fundamentals of what happened,” she says.
Discussing the toll her short-lived premiership has taken, Truss says “the soul search hasn’t been easy,” adding that it “was a bruise for me personally.” And she’s showing her regret for dismissing Kwarteng.
A senior government source said Truss’ approach “failed and will fail if you try again”.
The Telegraph, London
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https://www.smh.com.au/world/europe/liz-truss-blames-left-wing-establishment-in-first-intervention-since-she-was-dumped-as-pm-20230205-p5chz1.html?ref=rss&utm_medium=rss&utm_source=rss_world Liz Truss blames the left establishment for the first intervention since she was sacked as PM