An unapologetic Liz Truss has defended her mini-budget, blaming “institutional bureaucracy” for the economic chaos that saw her forced out of No 10 last October after just 49 days in office.
Her time as prime minister was cut short after the then chancellor Kwasi Kwarteng pushed ahead with £45 billion worth of tax cuts, ultimately leading to a slump in the pound.
In a speech at the Institute for Government think tank on Monday, Ms Truss declined to express regret about the consequences of her fiscal policies. She told the audience it would only have made a “marginal difference” to the deficit.
“Of course, I would’ve wished things had turned out differently,” she said.
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She said the mini-budget would have led to growth, she did however, admit that she and Mr Kwarteng went too far, too soon.
“Some people said we were in too much of a rush. And it is certainly true that I didn’t just try to fatten the pig on market day; I tried to rear the pig and slaughter it as well. I confess to that.
“But the reason we were in a rush was because voters wanted to see results, having already voted for change twice – in 2016 and 2019.
“I knew with the level of resistance and the lack of preparation time that things weren’t going to be perfect. However, given the situation for the UK was so difficult, it was important to take action and not do nothing.
“I went into politics to get things done, not to do public relations.”
She said some of her colleagues in the Tories were members of the “anti-growth coalition.”
“The anti-growth coalition is now a powerful force comprising the economic and political elite, corporatists, parts of the media and even a section of the Conservative parliamentary party. “The policies I advocate simply aren’t fashionable on the London dinner party circuit.”
Ms Truss said her successor could help grow the economy by reducing corporation tax, slowing the rate at which spending on benefits and pensions increases, raising the retirement age, allowing fracking, abolishing the energy windfall tax, further regulatory divergence from the EU and delaying the implementation of some net zero measures, like delaying the ban on the sale of new petrol and diesel cars scheduled for 2030.
Defending her budget, she said: “The tax cuts we were introducing were not major tax cuts, they would have made a fairly marginal difference in fact to the level of the deficit.
“What they were about was showing a new direction for Britain.”
Ms Truss also said her administration felt pressured by the Bank of England into committing to a “counterproductive” U-turn on her tax plans. She also admitted she had never heard of the liability driven investment (LDI) pension funds that were hit by her mini-budget until after the economic crisis struck.
“On the LDIs, there clearly wasn’t enough information.
“So the fact that we were completely blindsided by LDIs… I literally hadn’t heard of what an LDI was until the following Monday, which was quite a large part of what happened in the market.”
But she also blamed the media for not effectively critiquing the Bank of England. “It really goes back to this point about institutions and politicians ending up having all of the responsibility, but not necessarily the power.”
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Ms Truss twice dodged questions about whether she will withdraw her resignation honours, as Labour called on the Prime Minister to block her list.
Former Tory minister Conor Burns called for a period of silence from his former boss. “She is a drag anchor to any cause she attaches herself to,” he tweeted. “And toxic on the doorsteps. Only service she could provide is sustained silence.”
She is a drag anchor to any cause she attaches herself to. And toxic on the doorsteps. Only service she could provide is sustained silence.
— Conor Burns (@ConorBurnsUK) September 18, 2023
Sarah Olney, the Lib Dem Treasury spokersperson, criticised Ms Truss for failing to apologise to the public.
She said: “Liz Truss’ refusal to apologise to the families who have seen their finances ruined by her botched budget shows just how out of touch she is. To rub salt in the wound, Truss and her fellow Conservative ministers pocketed thousands of pounds of taxpayers’ cash in handouts after causing an economic car crash and fleeing the scene of the crime.
“The British public will never forget this shambolic Conservative government for trashing the economy and sending mortgage rates spiralling. It is time to change the rules over ministerial severance pay for good so that Liz Truss and other former Conservative ministers cannot again profit from their own failure.”
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