Liz Truss, who resigned as British prime minister after just 45 days in office, has said she was never given a “realistic chance” to implement her tax-cutting agenda.
In her first detailed comments since she relinquished the role in October, Ms Truss said she was brought down by the combination of a “powerful economic establishment” and a lack of support from within the Conservative party.
The minibudget in September, which initially contained £45 billion (€50 billion) worth of tax cuts, crashed the markets and led the pound to hit an all-time low against the dollar.
Writing in the Sunday Telegraph, Ms Truss, who is expected to launch her political comeback on Sunday, said: “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.
“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.
“Similarly, I underestimated the resistance inside the Conservative parliamentary party to move to a lower-tax, less-regulated economy,” she said.
Having returned to the Conservative backbenches, Ms Truss holds the somewhat undistinguished record as the prime minister in office for the shortest length of time.
Ms Truss further said in the Telegraph that while her truncated stay in No 10 was “bruising for me personally”, she believed that over the medium term her policies would have increased growth and therefore brought down debt.
However she said she had not been warned of the risks to the bond markets from liability-driven investments (LDIs) – bought up by pension funds – which forced the Bank of England to step in to prevent them collapsing as the cost of government borrowing soared.
In the wake of the mini-budget, she complained that the government was made a “scapegoat” for developments that had been brewing for some time.
“Only now can I appreciate what a delicate tinderbox we were dealing with in respect of the LDIs,” she said.
“It rapidly became a market stability issue and we had to act to stabilise the situation. While the government was focused on investigating what had happened and taking action to remedy the situation, political and media commentators cast an immediate verdict blaming the mini-Budget.
“Regrettably, the government became a useful scapegoat for problems that had been brewing over a number of months,” Ms Truss said.
She said that although, with the benefit of hindsight, she would have acted differently, she said that she had had to battle against the “instinctive views of the Treasury” and “the wider orthodox economic ecosystem”.
She said that her and chancellor Kwasi Kwarteng’s plan for growth – with its combination of tax cuts and deregulation to kickstart the stalled economy – had represented a conscious break with the “left-wards” drift of economic thinking, which was resented by some powerful forces.
“Frankly, we were also pushing water uphill. Large parts of the media and the wider public sphere had become unfamiliar with key arguments about tax and economic policy and over time sentiment had shifted left-wards,” she said.
Following a number of scheduled media appearances over the next week, Ms Truss is due to deliver a “hawkish” speech on China that could add to the pressure already mounting on Prime Minister Rishi Sunak, who only took over from her in October.
Ms Truss’s return to the international stage follows former prime minister Boris Johnson’s own re-emergence, having made visits to Ukraine to visit Volodymyr Zelenskiy, as well as to the United States. – Guardian