Unrepentant Liz Truss lays blame for economic woes elsewhere – but admits going too far, too fast
An unrepentant Liz Truss has sought to blame a left-wing infiltration of thinktanks, the Bank of England and other “institutions” for the market turmoil during her brief premiership.
Ms Truss was speaking at an Institute for Government event about what she believes are the issues with the UK economy.
Her 49 days as prime minister – the shortest ever – ended after attempts to reform the economy culminated with the Bank of England having to prevent pension markets from collapsing as markets expected interest rates to soar on borrowing to pay for tax cuts.
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Liz Truss’s rise and fall
Ms Truss did admit that she tried to go too far, too fast. She said: “It was certainly true that I didn’t just try to fatten the pig on market day but tried to rear the pig, fatten the pig and slaughter it on market day.”
But she did not apologise – despite being asked several times about her time in Downing Street – and pointed out that interest rates and gilt yields are now higher than when she was in office.
Sky’s economics and data editor Ed Conway explained that the “ham-fisted” way in which Ms Truss tried to change policy led to her losing the confidence of the markets, which set off “mines” and shook confidence in the UK’s economy.
At the end of her speech, Ms Truss revealed she would be heading to the Conservative Party conference in Manchester, where she would be “saying more”.
This conference is Rishi Sunak’s first as leader.
In her speech, Ms Truss said: “Certainly as a politician, trying to deliver what I believed people had voted for, there was a lot of institutional bureaucracy in the way.
“And even during the leadership election campaign, and maybe this did not make me popular with the OBR and the Bank of England, I pointed out that there was an orthodoxy in Britain about economic policy and I tried to challenge that orthodoxy.
“And I didn’t find a massive level of support, frankly, from those institutions.”
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She argued that, after the end of the Cold War, “free market economists went off to lucrative jobs in the city allowing academic institutions and think tanks to be captured by the left” – and this made her attempts to reduce tax and increase growth harder.
Ms Truss called on Mr Sunak to make cut taxes – saying her successor needs to cancel the rise in corporation tax, cut the top rate of income tax and reform IR35, as well as advocating for the return of VAT-free shopping for tourists.
The Bank of England was singled out by the former prime minister, arguing that they had kept interest rates too low for too long and extended an era of cheap money without warning of the consequences.
Mark Carney, a former governor of the central bank, accuse Ms Truss of contributing to a weakening of the UK’s economic standing and creating “Argentina-on-the-Channel” rather than “Singapore-on-Thames”.
Ms Truss said: “I’m afraid there’s quite a lot of finger-pointing going on from people like Mark Carney because they don’t want to admit their culpability or the culpability of their central banking associates in this.
“And I again think, of course politicians should be held accountable and responsible for what we do, but when there are people with significant power, you know, I don’t feel that the same questions are necessarily asked about them.”
Asked by Sky political correspondent Ali Fortescue if there was a credibility crisis when Ms Truss was in Number 10, the former leader said: “It’s very difficult if the government of the day has an economic policy that clearly, leading economic institutions in the UK and indeed internationally, don’t necessarily agree with.”
She pointed out comments by the IMF and Joe Biden when she was prime minister.
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Ms Truss added: ” I don’t regret the choice I made and if people say, well, you put the case back for free markets, what I think I have been able to do … this has given me a real insight into why it’s so difficult for governments to deliver, you know, a smaller state or tax cuts.
“It’s not just a problem that there isn’t enough political agreement, we actually have real institutional issues with delivering these things and that is what I’m going to be exploring further.”
A “tentative” deal has been reached to end a long-running strike by writers in Hollywood.
The Writers Guild of America (WGA) announced the deal with the Alliance of Motion Picture and Television Producers (AMPTP), the group which represents studios, streaming services and producers in negotiations.
A statement from the WGA said: “We have reached a tentative agreement on a new 2023 MBA, which is to say an agreement in principle on all deal points, subject to drafting final contract language.
“We can say, with great pride, that this deal is exceptional – with meaningful gains and protections for writers in every sector of the membership.”
The three-year contract agreement – settled on after five days of renewed talks by negotiators from the WGA and the AMPTP – must be approved by the guild’s board and members before the strike officially ends.
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The terms of the deal were not immediately announced.
The statement added: “To be clear, no one is to return to work until specifically authorised to by the Guild.
“We are still on strike until then. But we are, as of today, suspending WGA picketing. Instead, if you are able, we encourage you to join the SAG-AFTRA picket lines this week.”
The agreement comes just five days before the strike would have become the longest in the guild’s history, and the longest Hollywood strike in decades.
About 11,500 members of the Writers Guild of America walked off the job on 2 May over issues of pay, the size of writing staffs on shows and the use of artificial intelligence (AI) in the creation of scripts.
SAG-AFTRA actors during their ongoing strike, in Los Angeles (file pic)
In July, the SAG-AFTRA actors’ union started its own walkout which is yet to be resolved.
It said in a statement: “SAG-AFTRA congratulates the WGA on reaching a tentative agreement with the AMPTP after 146 days of incredible strength, resiliency and solidarity on the picket lines.
“While we look forward to reviewing the WGA and AMPTP’s tentative agreement, we remain committed to achieving the necessary terms for our members.
“We remain on strike in our TV/Theatrical contract and continue to urge the studio and streamer CEOs and the AMPTP to return to the table and make the fair deal that our members deserve and demand.”
The northern section of the HS2 high speed rail line looks set to be scrapped by Rishi Sunak, Sky News understands.
It comes as a number of Sunday newspapers reported that any decision would be announced before next weekend’s Conservative Party conference.
Sky News political correspondent Tamara Cohen said: “The widespread view in Westminster is that the prime minister is set to scrap the northern leg of the High Speed 2 rail line – the bit that was due to go between Birmingham and Manchester – because of concern about the cost.
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“We’ve had several reports that the crunch meeting between the prime minister and chancellor to make the final decision could happen as soon as next week and be announced to Conservative MPs.
“This would be a big U-turn if it goes ahead.”
On Saturday, two former prime ministers warned Mr Sunak about “delivering a mutilated HS2”.
Boris Johnson said suggestions the Birmingham to Manchester route could be chopped over cost concerns were “desperate” and “Treasury-driven nonsense”.
David Cameron has also privately raised significant concerns about the prospect that the high-speed rail line could be heavily altered, according to The Times.
An ally quoted by the newspaper said it was “unusual” for the former prime minister, who resigned after the Brexit referendum result in 2016, to intervene in politics, but felt HS2 was “different”.
Ministers have looked to sidestep questions about the future of the Manchester destination this week and Chancellor Jeremy Hunt said on Thursday that HS2’s budget was “getting totally out of control”.
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Cleverly questioned over HS2
Mr Sunak has refused to guarantee the line will reach Manchester despite £2.3bn having already been ploughed into stage two.
Cohen said recent comments from Mr Hunt in a radio interview showed the chancellor was concerned with costs spiralling.
“It’s being reported the costs may be overrunning by at least £8bn on the section from London to Birmingham alone since last year – although the government has not commented on those figures.”
The planned railway – announced by the last Labour government but backed by successive Tory administrations – is intended to link London, the Midlands and the North of England, but has been plagued by delays and rising costs.
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A budget of £55.7bn for the whole of HS2 was set in 2015, but some reports suggest the bill has surpassed £100bn, having been driven up by recent inflation.
Ministers have already moved to pause parts of the project and even axed sections in the North.
The eastern leg between Birmingham and Leeds was reduced to a spur line, which is due to end in the East Midlands.
It was confirmed in March that construction between Birmingham and Crewe would be delayed by two years and that services may not enter central London until the 2040s.
Work at Euston would be paused for two years
Transport Secretary Mark Harper announced that work at Euston would be paused for two years as costs were forecast to almost double to £4.8bn.
A government spokesman said: “The HS2 project is already well under way with spades in the ground, and our focus remains on delivering it.”
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