UK's shortest-serving PM Liz Truss blames 'economic orthodoxy' for No 10 exit

Ex-Tory leader defends economic policies and her plans to cut taxes

Liz Truss has offered an explanation as to why she spent only 49 days in office as British prime minister. AP
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Former UK prime minister Liz Truss on Sunday said she had no "realistic chance" to fulfil her radical tax-cutting agenda because the “powerful economic establishment" was behind her Downing Street downfall.

Ms Truss made the comments in a lengthy newspaper article, which marked her first foray into politics since the abrupt end to her leadership in October.

Ms Truss lasted only 49 days in No 10 before she was forced to resign after she and her chancellor Kwasi Kwarteng attempted to push through a £45 billion package of unfunded tax cuts, over which the markets panicked and the pound tanked.

But she was not successful, she wrote, because she had underestimated "the blob of vested interests" and orthodoxy.

"I am not claiming to be blameless in what happened, but fundamentally I was not given a realistic chance to enact my policies by a very powerful economic establishment, coupled with a lack of political support," she wrote in The Sunday Telegraph.

"I assumed upon entering Downing Street that my mandate would be respected and accepted. How wrong I was. While I anticipated resistance to my programme from the system, I underestimated the extent of it."

She blamed the reaction not only on what she described as the left-leaning orthodoxy of the economic establishment but also on liability-driven investments (LDI), which pension funds use to cover their obligations. LDIs were at the centre of the market turmoil following her mini-budget.

Ms Truss said that while her experience last autumn was “bruising for me personally”, she believed that over the medium term her policies would have increased growth and reduced debt.

She said she had underestimated "the resistance inside the Conservative parliamentary party to move to a lower-tax, less-regulated economy" and a drive on the global stage to "limit competition" between major economies.

"As I had spelled out during the leadership campaign, I wanted to go for growth ... but this was not in line with the instinctive views of the Treasury or the wider orthodox economic ecosystem."

In her 4,000 word article, she said she had been “deeply disturbed” at having to sack Mr Kwarteng but believed she was left with no choice.

“At this point, it was clear that the policy agenda could not survive and my priority had to be avoiding a serious meltdown for the UK,” she said.

“I still believe that seeking to deliver the original policy prescription on which I had fought the leadership election was the right thing to do, but the forces against it were too great.”

While she regretted not being able to execute her plans, she said she had learnt a lot from her experience, which she will expand on in the coming months.

Tory peer Lord Barwell, previously Theresa May’s chief of staff, was scathing of the explanation offered by Ms Truss.

“You were brought down because in a matter of weeks you lost the confidence of the financial markets, the electorate and your own MPs,” he tweeted.

“During a profound cost of living crisis, you thought it was a priority to cut tax for the richest people in the country.”

UK Business Secretary Grant Shapps on Sunday said everyone wanted lower taxes but Prime Minister Rishi Sunak's government had to focus first on reducing debt, bringing down inflation and boosting growth.

Britain's opposition Labour Party, meanwhile, said it was time for a change of government.

"The Conservatives crashed the economy, sank the pound, put pensions in peril and made working people pay the price through higher mortgages for years to come," said Rachel Reeves, Labour's financial policy chief.

"After 13 years of low growth, squeezed wages and higher taxes under the Tories, only Labour offers the leadership and ideas to fix our economy and to get it growing."

Updated: February 05, 2023, 11:39 AM