Truss was right to argue for tax cuts, former Tory chairman says

Former Tory Party chairman Sir Jake Berry has defended Liz Truss’s radical tax cutting agenda after the former prime minister said she had not been given a “realistic chance” of implementing her plan.

In her first detailed comments since she was forced out of Number 10, Mr Truss blamed a powerful, left-leaning “economic establishment” for her failure to achieve her vision in office.

Although she admitted she was not “blameless” for the disastrous way her infamous mini-budget turned out, she said she still believes her approach to driving growth is the right one.

Her intervention in Westminster is likely to be seen as a rallying cry for Tory MPs who have been pushing Prime Minister Rishi Sunak and Chancellor Jeremy Hunt to cut taxes to kick-start growth.

Sir Jake, who put Ms Truss in charge of the Conservative Party machine, said she offered the “correct diagnosis of the disease facing the country”, although it was not “delivered in the right way”.

He told the BBC’s Sunday With Laura Kuenssberg programme: “I think her point is we need to lower taxes, we need to create a growing economy, that’s what people want.”

With Ms Truss promising more interventions and around 50 Ts backing the Conservative Growth Group who support her economic vision, there will be concerns in No. 10 about the possibility of more turmoil from the back bench.

Sir Jake Berry

Sir Jake Berry said Liz Truss was right to argue for tax cuts (Jordan Pettitt/PA)

But Business Secretary Grant Shapps insisted Mr Sunak and Mr Hunt were right to resist calls for tax cuts in next month’s Budget, saying inflation had to be brought under control first.

“I totally agree with Liz’s instinct to have a lower tax economy,” he told Sky’s Sophy Ridge On Sunday programme.

“We also know that if you do that before you’ve dealt with inflation and before you’ve dealt with the debt, you’re going to have trouble eventually. You can’t take growth out of nowhere.”

Others within the party were more critical. Theresa May’s former chief of staff, Lord Barwell, tweeted that Mr Truss was brought down because “in a matter of weeks you have lost confidence in the financial markets, the electorate and your own MPs”.

For Labour, shadow business secretary Jonathan Reynolds scoffed at the idea that the former PM had been brought down by a left-wing economic establishment, saying she had to go because her policies were “incoherent and un- sustainable”.

In a 4,000-word article for the Sunday Telegraph, Ms Truss said she did not appreciate the strength of the opposition she would face to her plans and complained her government had been made a “scapegoat” over economic issues. for a long time.

“I am not claiming that I am blameless in what happened, but basically I was not given a realistic opportunity to enact my policies by a very powerful economic establishment, combined with a lack of political support,” she wrote.

“I assumed when I entered Downing Street that my mandate would be respected and accepted. How wrong I was. Although I hoped the system was resisting my program, I underestimated the extent to which it was.

“Similarly, I did not consider the resistance within the Conservative parliamentary party to move to a lower tax, less regulated economy.”

Mrs Truss’s Capital lasted just 49 days as she was forced to resign when her Chancellor Kwasi Kwarteng’s £45 billion package of unfunded tax cuts sent markets into a panic and sank the pound.

Kwasi Kwarteng and Liz Truss at the Conservative Party conference

Liz Truss sacked her chancellor Kwasi Kwarteng before resigning herself (Stefan Rousseau/PA)

She said that although her experience last autumn “personally upset me”, she believes her policies would increase growth in the medium term and reduce debt as a result.

However, she said she had not been warned of the risks to the bond markets from liability-led investments (LDIs) – bought by pension funds – which forced the Bank of England to step in to prevent them from collapsing. together as the cost of government borrowing increased. .

“Only now can I understand what a delicate tender box we were dealing with in relation to the LDIs,” she said.

“Unfortunately, the government has become a useful scapegoat for problems that have been brewing for several months.”

She said that, with the benefit of hindsight, she would have acted differently, but had to fight against “the instinctive views of the Treasury” and “the wider orthodox economic ecosystem”.

She said she was “deeply disturbed” by Mr Kwarteng’s sacking, but believed she had been left with no choice.

“At this stage, it was clear that the policy agenda could not survive and my priority was to avoid a major crisis for the UK,” she said.

“I still believe it was the right thing to do trying to deliver the basic policy administration I fought the leadership election for, but the forces against it were too great.”

Leave a comment