web counter

Feature Programs

International News

UK's shortest-serving PM Liz Truss blames economic 'orthodoxy' for downfall

Former British prime minister Liz Truss blamed on Sunday the economic "orthodoxy" in the country's finance ministry, other nations and in parts of the governing Conservative Party for derailing her premiership and "plan for growth". Truss's tenure was cut short last year after her largely unfunded mini budget and tax cuts pushed up borrowing costs and mortgage rates, sent the pound tumbling and shattered Britain's reputation for financial stability. Writing in the Sunday Telegraph newspaper in her first major foray into politics since the abrupt end to her premiership after just over six turbulent weeks in power, Truss wrote she believed her recipe for Britain by cutting taxes and removing some regulation was the right one. 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. "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. LDI's were at the centre of the market turmoil following her mini-budget. Truss also 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 (finance ministry) or the wider orthodox economic ecosystem." Grant Shapps, business minister, said everyone wanted lower taxes but Prime Minister Rishi Sunak's government had to focus on reducing debt, bringing down inflation and boosting growth first. Britain's opposition Labour Party 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."

LEARN MORE

Former UK PM Truss criticises Sunak policies

LONDON: Former UK prime minister Liz Truss on Sunday criticised her successor Rishi Sunak "detrimental" tax policies, as the current leader also faced pressure from another predecessor Boris Johnson over his Ukraine strategy.Truss came to power in September, immediately implementing a radical tax-slashing agenda.But her plans spooked the markets and threatened to take down the pension sector and she was forced out after only 44 days, making her the country's shortest-serving leader ever.In her first intervention since losing her job, she argued that the "powerful economic establishment" took her down, and that her replacement Sunak had made a mistake in rejecting all of her tax-cutting measures.Writing in the Sunday Telegraph, she blamed the "strength of economic orthodoxy and its influence on the market" and said that Sunak's decision to raise corporation tax from 19 to 25 percent was "economically detrimental"."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.The IMF -- which criticised Truss' sweeping tax cuts at the time -- last week delivered a blow to Sunak when it predicted the UK would be the only G7 country with negative growth in 2023, blaming it partly on the UK's "tighter fiscal and monetary policies".Sunak has barely been in office 100 days, and despite calming markets, is languishing in the polls as the country's cost-of-living crisis rumbles on.The re-emergence of Truss and the more visible role taken by Boris Johnson in trying to secure more military support for Ukraine has increased pressure from various factions in Sunak's own party.Johnson was a visible pro-Ukraine presence at last month's World Economic Forum meeting, which Sunak did not attend.Johnson and many of his supporters still blame Sunak for triggering his downfall by resigning as his finance minister.The resulting leadership campaign turned into a bitter fight between Truss and Sunak. The pro-growth faction of MPs that helped her win that contest are reported to be regathering, threatening more headaches for the prime minister.

LEARN MORE