Liz Truss Defends Mini-Budget, Claims Economy Worse Under Current Leadership

Former UK Prime Minister Liz Truss has defended her controversial 2022 mini-Budget, asserting in a new book that its radical measures would have ultimately benefited the public finances more than the current economic approach. Truss argues that the economic instability during her 49-day tenure was largely due to the financial 'establishment' and the Bank of England, rather than her policies.

In her book, titled "Bank Job," Truss contends that the market turmoil, which led to her ousting, stemmed from external factors and the system's reaction to her plans, which included significant tax cuts announced by her Chancellor, Kwasi Kwarteng. These proposals, particularly the reduction of the 45p rate of tax for higher earners, caused bond yields to surge and the pound to plummet.

Truss's book is set to be published as current Chancellor John Healey prepares his own budget. Treasury sources indicate Healey's plan will focus on stability, with modest support for energy bills and businesses, funded partly by increased taxes on banks and reduced fiscal buffers. This contrasts sharply with Truss's approach.

She writes in "Bank Job" that Britain is currently facing economic decline, citing a significant number of billionaires leaving the country and the diminished standing of the City of London. "People said my tax cuts would... worsen the public finances. We've now tried the opposite and the public finances are worse," Truss states, pointing to higher 30-year gilt yields than in 2022 as evidence of a "lack of trust in the entire system."

The book also attributes her downfall to internal party dissent from individuals like former minister Michael Gove, whom she labels "Tory Traitors," and criticism from the "media and political class" who she claims perpetuated a "false narrative of unfunded tax cuts."

Andy Haldane, former chief economist at the Bank of England, has warned the current Prime Minister to significantly cut public spending, suggesting that failure to do so risks a crisis similar to the one that occurred during Truss's premiership. Haldane cautioned that the UK is nearing its limits for taxation and borrowing.

However, not all former colleagues share Truss's perspective. Sir Conor Burns, who served as her trade minister, called her an "international embarrassment with zero self-awareness," stating that markets and the party recognized her as "financially illiterate."