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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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.”