Former British Prime Minister Liz Truss on Sunday blamed economic “orthodoxy” in the country’s Finance Ministry, other nations and in parts of the ruling Conservative Party for derailing her tenure as prime minister and her “plan for growth.”
Truss’s tenure was cut short last year after his largely underfunded mini-budget and tax cuts drove up borrowing costs and mortgage rates, sent the pound tumbling and shattered a reputation for stability. Britain’s financial
Writing in the Sunday Telegraph newspaper in his first major foray into politics since the abrupt end of his premiership after just over six turbulent weeks in power, Truss wrote that he believed his recipe for Britain by cutting taxes and removing some regulations was the right thing to do.
But he was unsuccessful, he wrote, because he had underestimated “the mass of vested interests” and the orthodoxy.
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British Prime Minister Liz Truss addresses the media at Downing Street in London, Thursday, October 20, 2022.
(AP Photo/Alberto Pezzali)
“I don’t claim to be innocent of what happened, but fundamentally I was not given a realistic opportunity to enact my policies by a very powerful economic establishment, coupled with a lack of political support,” he wrote.
“Going into Downing Street, I assumed my mandate would be respected and accepted. How wrong I was. While I anticipated resistance to my program from the establishment, I underestimated its scope.”
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She blamed the reaction not only on what she described as the economic establishment’s left-leaning orthodoxy, but also on liability-driven investing (LDI), which pension funds use to hedge their liabilities. The LDIs were at the center of the market turmoil after their mini-budget.
The Bank of England building is reflected in a sign, London, Britain, on December 16, 2021.
(Reuters/Toby Melville)
Truss also said he had underestimated “resistance within the Conservative parliamentary party to move to a lower taxed and less regulated economy” and a push on the world stage to “limit competition” between major economies.
“As he had explained during the leadership campaign, he wanted to bet on growth… But this was not in line with the knee-jerk views of the Treasury (finance ministry) or the broader orthodox economic ecosystem.”
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Business minister Grant Shapps said everyone wanted lower taxes, but Prime Minister Rishi Sunak’s government had to focus first on reducing debt, reducing inflation and boosting growth.
Britain’s opposition Labor Party said it was time for a change of government.
The Houses of Parliament in London, UK, on Friday, September 23, 2022.
(Chris J. Ratcliffe/Bloomberg via Getty Images)
“The Tories have crashed the economy, sunk the pound, jeopardized pensions and made workers pay the price through higher mortgages for years to come,” said Rachel Reeves, the Labor party’s chief financial officer.
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“After 13 years of low growth, low wages and higher taxes under the Tories, only Labor offers the leadership and ideas to fix our economy and make it grow.”
