Liz Truss says she didn’t get ‘realistic chance’ to enact tax-cutting agenda

  • 2/4/2023
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Liz Truss, who resigned as prime minister after just 45 days in office, has said she was never given a “realistic chance” to implement her tax-cutting agenda. In her first detailed comments since she relinquished the role in October, Truss said she was brought down by the combination of a “powerful economic establishment” and a lack of support from within the Conservative party. The minibudget in September, which initially contained £45bn worth of tax cuts, crashed the markets and led the pound to hit an all-time low against the dollar. Writing in the Sunday Telegraph, Truss, who is expected to launch her political comeback on Sunday, said: “I am not claiming to be blameless in what happened, but fundamentally I was not given a realistic chance to enact my policies by a very powerful economic establishment, coupled with a lack of political support. “I assumed upon entering Downing Street that my mandate would be respected and accepted. How wrong I was. While I anticipated resistance to my programme from the system, I underestimated the extent of it. “Similarly, I underestimated the resistance inside the Conservative parliamentary party to move to a lower-tax, less-regulated economy.” Having returned to the Conservative backbenches, Truss holds the somewhat undistinguished record as the prime minister in office for the shortest length of time. A close ally told HuffPost: “Liz has taken a few months to gather her thoughts and is now ready to speak about her time in office and the current state of play.” Her allies, including the former cabinet minister Simon Clarke, have recently formed the Conservative Growth Group to push for her tax-cutting agenda. Following a number of scheduled media appearances over the next week, Truss is due to deliver a “hawkish” speech on China that could add to the pressure already mounting on Rishi Sunak, who only took over from her in October. Later this month Truss will address a conference of international politicians in Japan, a speech billed as focusing on Beijing’s threat to Taiwan. Her comeback could stoke divisions among Tory MPs, with many more eager to hastily cut taxes than Sunak and holding a more aggressive stance on China. The Inter-Parliamentary Alliance on China (Ipac), a campaign group seeking to coordinate international pressure on Beijing, is arranging the event at which Truss will speak on 17 February. She is expected to be joined by two other former prime ministers, Australia’s Scott Morrison and Guy Verhofstadt of Belgium. An ally of Truss said the speech would be “hawkish”, telling PA Media: “She’s expected to address Sunak’s decision to brand China a strategic competitor rather than a threat.” She had been expected to officially redesignate China as a “threat” in official speak, instead of a “systemic competitor” during her leadership. In November Sunak said the “golden era” of UK-Chinese relations was over, but described the country as a “systemic challenge” rather than a threat. That marked a dialling-down of his language, having called it the “biggest long-term threat to Britain” during the summer leadership contest to replace Boris Johnson. Truss’s return to the international stage follows Johnson’s own re-emergence, having made visits to Ukraine to visit Volodymyr Zelenskiy, as well as to the US. Shortly after Truss was forced to resign, her former speechwriter said she took a “Spinal Tap approach” to government, demanding the volume was “turned up to 11”. Asa Bennett said the former prime minister had arrived in Downing Street determined to put “rocket boosters” under the economy and that it was a matter of “bitter regret” that her efforts had failed. Truss further said in the Telegraph that while her truncated stay in No 10 was “bruising for me personally”, she believed that over the medium term her policies would have increased growth and therefore brought down debt. However she said she had not been warned of the risks to the bond markets from liability-driven investments (LDIs) – bought up by pension funds – which forced the Bank of England to step in to prevent them collapsing as the cost of government borrowing soared. In the wake of the mini-budget, she complained that the government was made a “scapegoat” for developments that had been brewing for some time. “Only now can I appreciate what a delicate tinderbox we were dealing with in respect of the LDIs,” she said. “It rapidly became a market stability issue and we had to act to stabilise the situation. While the government was focused on investigating what had happened and taking action to remedy the situation, political and media commentators cast an immediate verdict blaming the mini-Budget. “Regrettably, the government became a useful scapegoat for problems that had been brewing over a number of months.” She said that while, with the benefit of hindsight, she would have acted differently, she said that she had had to battle against the “instinctive views of the Treasury” and “the wider orthodox economic ecosystem”. She said that her and Kwarteng’s plan for growth – with its combination of tax cuts and deregulation to kickstart the stalled economy – had represented a conscious break with the “left-wards” drift of economic thinking, which was resented by some powerful forces. “Frankly, we were also pushing water uphill. Large parts of the media and the wider public sphere had become unfamiliar with key arguments about tax and economic policy and over time sentiment had shifted left-wards,” she said. She said the furore over her plan to abolish the 45p top rate of income tax – not least from within her own party – was illustrative of the difficulties she faced. “Even though the measure was economically sound, I underestimated the political backlash I would face, which focused almost entirely on the ‘optics’,” she said. While she regretted not being able to implement her plans, she said she had learned a lot from her experience, which she will expand on in the coming months. “I have lost track of how many people have written to me or approached me since leaving Downing Street to say that they believe my diagnosis of the problems causing our country’s economic lethargy was correct and that they shared my enthusiasm for the solutions I was proposing,” she said. “While I regret that I wasn’t able to implement my full programme, I am still optimistic for the future, with the United Kingdom now able to steer its own course as a free nation. “By being bold and entrepreneurial and giving people and businesses the freedom they need to succeed, I believe we can turn things around. There is hope for the future.”

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