Liz Truss, former Prime Minister of the United Kingdom, has rebuffed claims that her tenure led to a crash in the country’s economy. During a speech and Q&A session, she acknowledged making mistakes during her time in office but primarily placed blame on what she referred to as “groupthink” within institutions like the Bank of England, the media, and the civil service.
Truss’s government had generated concern in financial markets with a mini-budget that proposed seemingly unfunded tax cuts amounting to £45 billion. When asked whether she wanted to apologize to households facing higher mortgage rates due to her policies, she avoided directly addressing the question.
Instead, she asserted that the core issues lay with economic institutions, especially the Bank of England, which she accused of keeping interest rates artificially low for too long. She also criticized a prevailing “sense of groupthink and consensus” within the broader economic landscape.
Following her speech, Truss indicated her intention to revive her economic arguments within the Conservative Party, confirming her attendance at the upcoming Tory conference where she plans to speak further on these matters.
However, her apparent comeback has garnered criticism from some of her fellow Tory MPs. Conor Burns suggested that Truss’s best contribution to the party would be “sustained silence,” while Damian Green expressed relief that she was not responsible for the current year’s budget.
When questioned about whether her 49-day tenure in office had damaged the Conservative Party’s brand, Truss contested the notion of having “crashed the economy.” She pointed out that since her departure, both mortgage rates and gilt rates had risen higher than they were during her mini-budget announcement. She dismissed the accusation as a line taken from the Labour Party.
Truss placed responsibility on the Bank of England for pumping money into the system and keeping interest rates artificially low, creating an expectation of sustained low interest rates. She argued that the failure was not in raising interest rates but rather in not informing the public earlier that the rates were artificially low.
Furthermore, Truss criticized the media and the political landscape for being inherently opposed to low-tax, small-state government. She highlighted the contrast between the media’s scrutiny of tax cuts and their lack of focus on larger spending commitments, emphasizing a bias in favor of spending.
Truss also accused the Office for Budget Responsibility (OBR) of leaking calculations suggesting a £70 billion deficit in her mini-budget in an attempt to undermine her. The OBR refuted this claim, stating they had only shared forecasts with the Treasury.
When asked about resistance from the civil service, Truss characterized it more as “warnings and back-covering” rather than active obstruction. She noted that officials were more enthusiastic when it came to matters related to climate change than they were for issues such as the migration deal with Rwanda.
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While Truss admitted that financial markets were influenced by politics, she conceded that she had misjudged their likely response. She acknowledged that her approach was influenced by her character and that she might have acted differently if she had known the fragility of the markets.
In response to questions about the perception of her government’s incompetence, Truss acknowledged that mistakes were made in difficult circumstances but refrained from pointing fingers.