Liz Truss has ruled out any chance of reaching No 10 again amid speculation about a potential comeback, as she admitted her botched plan to ditch the top rate of tax for the richest earners was a “bridge too far”.
In her first interview since leaving Downing Street, the former prime minister largely blamed Whitehall officials for the economic turmoil sparked by her disastrous mini-Budget – saying no one told her about the risk to pension funds.
Ms Truss also took a swipe at Joe Biden for criticising her agenda, and revealed that her premiership was doomed from the moment she fired her chancellor Kwasi Kwarteng.
Asked by The Spectator if she wanted to be prime minister again, Ms Truss said: “No”, before adding that she “will be supporting” Rishi Sunak from the backbenches.
“I definitely want to be part of promoting a pro-growth agenda,” she said. “I definitely want to carry on as an MP. I think we need to start building more of a strong intellectual base. But I’m not desperate to get back into No 10, no.”
In the first hint of contrition, Ms Truss expressed remorse about trying to abolish the 45p top rate of tax for the wealthy – a move she abandoned after an outcry from her own MPs – saying she may have been “trying to fatten the pig on market day”.
Asked if she regretted trying to scrap the top tax rate, she said: “We could all think different things with hindsight, and perhaps it was a bridge too far – but I’m not convinced that it was a magic bullet, that everything would have been fine if we hadn’t done that.”
But the former Tory leader was largely unrepentant about her spree of unfunded tax cuts, blaming the Office for Budget Responsibility (OBR) for failing to provide optimistic-enough forecasts.
Ms Truss also suggested Bank of England and Treasury officials were to blame for failing to flag issues – claiming that she was never told about the liability-driven investing (LDI) risk to pensions.
The ex-PM admitted she “didn’t know of the existence of LDIs – which turned out to be the main problem”. She said Mr Kwarteng “wasn’t informed of this either” – claiming that they may have even delayed their radical mini-Budget had they understood the problem.
The Bank of England took emergency action to buy bonds in the wake of the fiasco which left some pension funds close to collapse, with some funds reliant on LDI and therefore vulnerable to market panic. “What we didn’t understand is the fragility caused by these liability-driven investments,” said Ms Truss.
Ms Truss claimed it was “unfair” of Labour and others to blame the mini-Budget for the spike in interest rates which has hit both mortgage payers and potential first-time housebuyers.
Despite the Bank of England linking the rise in gilt yields to the rise in interest rates after the mini-Budget, Ms Truss said: “I don’t think it’s fair to blame interest rises on what we did. I think that’s unfair.”
Power struggle: Liz Truss and Kwasi Kwarteng in October of last year
Defending her decision to sack the Treasury’s permanent secretary Tom Scholar on day one, Ms Truss again lashed out at Whitehall resistance to her plans. “Every democracy has institutions or people who have a particular point of view that doesn’t agree with the elected government.”
The former PM said she decided to fire Mr Kwarteng on 14 October after getting “serious warnings from senior officials that there could be a potential market meltdown the following week if I didn’t take action”.
Asked if she lost all authority when she replaced him with Jeremy Hunt, Ms Truss conceded: “Well yes, and I think that was probably the case. Obviously, looking back, from where we’re sitting now, I can see that.
“At the time, I was just thinking: ‘how do I make sure there’s not a market meltdown?’ So I wasn’t really focused on my long-term future,” added Ms Truss, who resigned only a week after her chancellor’s exit.
On her friendship with Mr Kwarteng, she added: “I count Kwasi as a friend and what happened: it was a difficult decision. Was it the right decision [to sack him]? It’s very hard to tell.”
Asked if she was surprised the US president criticised her ‘trickle-down” economic theories, Ms Truss said: “I was yes”, but added that she did not have time to call Mr Biden to speak to him about his comments or get “concerned” by them because of the war in Ukraine.
Ms Truss still has “half a hope” she can lead the Tories in opposition after the next election, allies claimed at the weekend. Loyal backers have formed the Conservative Growth Group (CGG), and have revived WhatsApp a group from her leadership campaign.
Sunak-supporting Tory MPs have dismissed the idea of a comeback as a “fantasy” and mocked the defence of her premiership as “delusional” and “sour grapes”. One senior party figure told The Independent she should have “kept her head down and stayed loyal”.
Earlier, No 10 said Mr Sunak would “always listen” to former PMs when questioned about Ms Truss’s return to the fray following her 4,000-word article for the Sunday Telegraph.
But Downing Street also appeared to rebuff Ms Truss’s criticism of the OBR and the suggestion that the UK’s “fiscal policy is in a straitjacket”. The PM’s official spokesman said No 10 values “the scrutiny of independent bodies like the OBR”.
Labour leader Sir Keir Starmer said his “heart sank” as Ms Truss returned to offer her thoughts on the economy. “The former prime minister’s contest of who was the biggest failure is just about the last thing that this country needs right now.”
