Advertisement

Scorn as Truss rejects blame a year on from disastrous mini-budget

Scorn as Truss rejects blame a year on from disastrous mini-budget

Liz Truss’s defence of her economic agenda was met with derision on Monday, as the former PM resurfaced with a defiant speech a year on since her mini-budget crashed the economy.

She claimed that Prime Minister Rishi Sunak was spending £35 billion more than if her programme to kick-start growth had been followed, and denied her tax-slashing plans were “unfunded”.

But financial markets were aghast at the absence of any evidence for how she would pay for them, and she resigned after a mere 49 days to become Britain’s shortest serving PM yet.

Ms Truss again blamed a shadowy “anti-growth coalition” for thwarting her plans as she lashed out at the Bank of England, the BBC and “institutional bureaucracy”.

“I was effectively forced into a policy reversal under the threat of a UK meltdown,” she said at the Institute for Government, adding: “The policies I advocate simply are not fashionable on the London dinner party circuit.”

The current PM’s allies pushed back at her attempts to rewrite the history of that tumultuous period. Pensions minister Laura Trott, asked if Ms Truss’s figures added up, said tersely “No.”

“She admitted mistakes were made,” Ms Trott said on Sky News, stressing that Mr Sunak was on the right economic path.

Mr Sunak himself did not follow the speech. Asked what he was doing instead, his spokesman said: “Being prime minister and having meetings.”

“Both the Prime Minister and Chancellor [Jeremy Hunt] are committed to growth,” the spokesman added, while resisting Ms Truss’s call for tax cuts now.

“The Chancellor has said he wants to lower the tax burden further but obviously, sound money must come first,” he said.

Ex-Bank of England Governor Mark Carney was scathing about the “basic misunderstanding” of economics seen from Brexiteers such as the former Conservative leader.

"It meant when Brexiteers tried to create Singapore on the Thames, the Truss government instead delivered Argentina on the Channel - and that was a year ago,” he told a “progressive” conference in Canada attended by Labour leader Sir Keir Starmer.

Ms Truss pushed back at central bankers “like Mark Carney, because they don’t want to admit their culpability” in keeping interest rates low for years.

“And, you know, Mark Carney is part of the 25-year economic consensus that has led to low growth across the Western world. And, you know, no doubt he’s defensive about that,” she said, declining to apologise for her own policy effects and accusing the media of mis-representing her.

“Of course I would’ve wished things had turned out differently. I admit the communication wasn’t as good as I would want it to be,” Ms Truss said after her £45 billion package of tax cuts bombed with the bond markets.

But she said the Queen’s death had made for an “unusual situation”, adding: “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.”

Liberal Democrat Treasury spokeswoman Sarah Olney 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.

"The British public will never forget this shambolic Conservative government for trashing the economy and sending mortgage rates spiralling,” the Richmond Park MP said.

Ms Truss was causing further trouble for her successor as Labour demanded Mr Sunak block her 14-strong resignation honours list, which is being vetted by the House of Lords appointments commission.

At least two people have reportedly turned down honours nominated by Ms Truss, with one said to be too “humiliated” to accept one from her.

Mr Sunak would veto the list if he “had any backbone”, shadow frontbencher Jonathan Ashworth said, stressing that the former leader’s ill-fated tenure wiped at least £300 billion from the combined value of Britain’s stock and bond markets.

“And now for Liz Truss to be out here today saying it was the London dinner party circuit that blocked her when people in Leicester, in Ashfield, in Barry and Bolton and Bolsover are paying more for food, I think is just extraordinary,” he said.

While largely defiant, Ms Truss did concede that she and her short-lived Chancellor Kwasi Kwarteng were in a “rush” to get “results”.

“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,” she said, but insisted she was “completely blindsided” when pension funds hit trouble because of the mini-budget.

The former leader urged Mr Sunak to “be bold” to deliver growth as Mr Hunt prepares to deliver his Autumn Statement in November.