Former prime minister Liz Truss on Monday delivered a speech at the Institute for Government. Herfirst major speech on the economy since leaving office.
It is a year on since her government published its disastrous mini-budget, which launched the UK’s economy into a downwards spiral.
Last year I tried to “get the British economy on a better trajectory”, Liz Truss said.
Explaining the decisions, she made for her mini-budget – or Growth Plan – last year with ex-chancellor Kwasi Kwarteng, the former prime minister says she pursued “a three-pronged approach of targeted tax freezes and reductions, supply side reform and holding down public spending down”.
“It was clear that interest rates were going up and were going to have to go up further,” she added.
“We had artificially low rates for too long and they were rising across the world.”
Ms Truss said in order to dampen inflation and stave off a recession “the only tool we had at our disposal was doing all we could to fix the supply side of the economy and– to increase productive capacity”.
She adds: “I felt we needed to reform our tax system with measures to make it more business friendly and to make the UK a more attractive place to invest.”
Ms Truss went on to say when people describe her policies as “unfunded tax cuts” that is “not an accurate description”.
Truss said she was “effectively forced into a policy reversal under the threat of a UK meltdown”.
Ms Truss said some people said “we were in too much of a rush”.
“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,” she says.
She says the reason her government was in a rush was because voters wanted “change” and she wanted to deliver on that.
“I knew with the level of resistance and the lack of preparation that things weren’t going to be perfect,” she adds.
“However, given the situation the UK was in, it was important to take action and not do nothing because I went into politics to get things done, not to do public relations.”
Asked a question about her legacy, Liz Truss took issue with claims that her mini-budget “crashed the economy”.
She said: “I do want to challenge this phrase ‘crashed the economy.’
“The fact is that since I left office both mortgage rates and gilt rates have gone higher than they were at the time of the mini-budget.
“So I do think you are repeating a line to take from the Labour Party when you say that.”
Truss was asked if she wishes to issue an apology to Britons whose mortgage rates have gone up and also asked if she will do Rishi Sunak a “favour” and withdraw her honours resignation list.
The former prime minister says mortgage rates were “going up anyway”.
“I think the political failure was to tell people that the rates have been artificially too low for too long,” she explained.
“In fact, the rates have gone higher since the mini-budget.”
Ms Truss said she “admits” the communication was not as good as she wanted it to be.
She said the tax cuts her government was introducing were “not major tax cuts” but “would have made a fairly marginal difference to the level of the deficit”.
Ms Truss does not answer the question on the honours resignation list.
