Former British prime minister Liz Truss criticized economic “orthodoxy” in the country’s finance ministry, foreign countries, and portions of the ruling Conservative Party on Sunday for derailing her premiership and “growth plan.”
Last year, Truss’s time was cut short after her mostly underfunded mini-budget and tax cuts pushed up borrowing prices and mortgage rates, sent the pound plunging, and ruined the United Kingdom’s image for financial stability.
In her first significant venture into politics since the premature collapse of her premiership after little over six difficult weeks in office, Truss wrote in the Sunday Telegraph that she believed her recipe for Britain of reducing taxes and removing some regulation was the correct one.
She wrote that she was unsuccessful because she had misjudged “vested interests” and orthodoxy.
She added, “I am not claiming to be blameless for what transpired, but I was not given a realistic opportunity to implement my policies by a very powerful economic establishment and a lack of political support.”
“Upon entering Downing Street, I assumed that my mandate would be honored and accepted. How incorrect I was. While I anticipated systemic opposition to my proposal, I grossly overestimated its magnitude.”
She attributed the reaction not only to what she termed the left-leaning orthodoxy of the economic establishment, but also to the liability-driven investments (LDI) used by pension funds to meet their responsibilities. Following her mini-budget, LDIs were at the center of market volatility.
Truss also acknowledged that she had misjudged “the resistance within the Conservative parliamentary party to move to a lower-tax, less-regulated economy” and a worldwide push to “limit competition” between big countries.
“As I had stated during the leadership race, I desired expansion… This, however, was not in accord with the innate ideas of the Treasury (financial ministry) or the conventional economic ecology as a whole.”
Grant Shapps, minister of business, stated that everyone desired lower taxes, but the administration of Prime Minister Rishi Sunak had to prioritize debt reduction, inflation control, and economic growth.
The opposition Labour Party stated that a change in government was necessary.
Rachel Reeves, Labour’s financial policy chief, stated, “The Conservatives crashed the economy, sank the pound, jeopardized pensions, and forced working people to pay the price through higher mortgages for years to come.”
“After 13 years of low economic growth, wage compression, and tax increases under the Conservatives, only Labour has the leadership and ideas to fix our economy and get it growing again.”
