Truss’s term was ended last year when her largely unfunded mini-budget and tax cuts drove up borrowing costs, and mortgage rates and sent the pound plunging. This shattered Britain’s reputation for financial stability.
In her first major political foray since her abrupt departure from her premiership, Truss stated in Sunday Telegraph that she believed her formula for Britain was right. She had cut taxes and removed some regulations.
She wrote that she failed to succeed because she underestimated the “blob of vested interest” and orthodoxy.
She wrote that although she is not saying she was blameless about what happened, the fact that I wasn’t given a realistic chance of implementing my policies by an economically powerful establishment and a lack of political support were fundamental reasons.
“I assumed that when I entered Downing Street, my mandate would be accepted and respected. How wrong I was. Although I expected resistance from the system to my program, I underestimated its extent.
She blamed the reaction on the left-leaning orthodoxy in the economic establishment, but also on liability-driven investments (LDI), which are used by pension funds to pay their obligations. After her mini-budget, LDI’s were at center of market turmoil.
Truss stated that she underestimated the resistance within the Conservative parliamentary party to shift to a lower tax, less-regulated economy and a push on the global stage for “limiting competition” among major economies.
“As I had stated during the leadership campaign I wanted to go after growth… This was contrary to the instinctive views expressed by the Treasury (finance minister) and the wider orthodox economy.
Grant Shapps (business minister) stated that everyone wants lower taxes, but Prime Minister Rishi Sonak’s government must focus on reducing the debt, decreasing inflation, and increasing growth.
The Labour Party, Britain’s opposition party, declared it was time to change the government.
“The Conservatives crashed and sank the Pound, put pensions at risk, and made working people pay for it through higher mortgages over the years,” stated Rachel Reeves (Labour’s chief financial police officer).
“After 13 years with low growth, squeezed wages, and higher taxes under Tories, Labour is the only party that can offer the leadership and ideas necessary to revive our economy and get it growing.”
