Liz Truss the comeback: Unrepentant ex-PM relaunches tax-cuts agenda

A 4,000-word essay, a TV interview and trip to Japan — the former Tory leader wants her ideas heard and insists she ‘wasn’t given a chance’

One-hundred-and-thirty-five days after the mini-budget that sealed her fate as Britain’s shortest-serving prime minister, Liz Truss is back.

In September, when she unveiled her economic prospectus, the financial markets went into near-meltdown.

Tomorrow she will begin a PR blitz which may not send tremors through the markets but will be felt across Westminster as Conservative MPs prepare for another debate about tax cuts before the budget this spring.

Truss, 47, is launching her post-premiership rehabilitation with a one-two publicity punch.

First she has written an opinion piece of 4,000 words in The Sunday Telegraph, arguing that her economic philosophy was right, but that it failed because of what she calls the “powerful economic establishment”. That is shorthand for the forces of economic orthodoxy, led by the Office for Budget Responsibility (OBR), the Whitehall watchdog set up by David Cameron and George Osborne which is required to give its verdict on a government’s fiscal plans.

In the article, Truss says she is not “blameless” for what happened under her leadership, but asserts she was “not given a realistic chance” because of the received wisdom of officials, the effect of their pessimism on the market, and a lack of political support from MPs who she believes would back her mandate.

She points the finger at the OBR — which she says put her fiscal policy in a “straitjacket” and provided incorrect forecasts on her plans — and the Treasury, which she accuses of suffering from “endemic” levels of “pessimism and scepticism”. “I still believe that seeking to deliver the original policy prescription on which I had fought the leadership election was the right thing to do,” she writes. “But the forces against it were too great.”

She acknowledges there were “some concerns” about her abolition of the 45p tax rate — an unexpected measure which came to symbolise the perceived recklessness of her reforms — but says the bigger problem was the vulnerability of British pension funds to the bond markets. “Only now can I appreciate what a delicate tinderbox we were dealing with,” she writes. Coupled with economic illiteracy among “large parts of the media and wider public” and generally “left-wards” shifting sentiment, she says, her premiership was doomed.

As for Sunak, Truss offers an implicit rebuke, declining to mention him by name but branding the increase in corporation tax from 19 to 25 per cent as “economically detrimental”.

On Monday she will make similar arguments in a pre-recorded interview with a national broadcaster. The BBC had fought hard to secure Truss’s first major move after leaving office, but she is understood to have plumped for a rival. Her team will not say which one yet.

Next month she will travel to Japan to make her first public appearance overseas since leaving office. She will speak at a conference alongside two other former prime ministers — her old friend Scott Morrison of Australia and Guy Verhofstadt of Belgium, who, as a passionate Europhile, is a less likely bedfellow — about the threat posed by Beijing. According to a source, she will encourage the rest of the world to be “better prepared” for conflict in the South China Sea, where President Xi’s regime has been expanding its influence.

Guy Verhofstadt will speak alongside Truss at a conference in Japan
Guy Verhofstadt will speak alongside Truss at a conference in Japan

Allies of Truss are adamant that she does not wish to return or destabilise the premiership of her successor, Rishi Sunak. They also deny that she intends to unveil a so-called blue book of alternative policies for the budget in March, which Jeremy Hunt, the man she appointed as chancellor, has already said will not include the tax cuts coveted by many of his parliamentary colleagues.

Instead, a friend says, she wants to continue making the case for the principles which gave her a “mandate” from the Conservative Party’s members in September: a national revival underpinned by tax cuts, a smaller state and a hawkish foreign policy. If those principles happen to conflict with Sunak’s, they said, that is for others to think about.

A senior Truss supporter said: “There is a wellspring of support for her ideas but it is not about Liz, or Liz v Rishi, at all. It’s about the ideas which powered her to her victory.”

Others are less agreeable. One MP, referring to Hunt and Sunak, said “two losers don’t make a winner” — but agreed the priority was policy rather than personalities.

One government source said: “This is the woman who almost caused a run on the pound and is now pretending she has some answer to our problems.”

In December, Truss travelled to Washington DC for the International Democrat Union conference, a gathering of prominent conservatives. The trip was funded by Lord Ashcroft, the billionaire Tory donor who is also her biographer. She told US politicians she “remained determined to rouse Britain from economic stagnation”.

But to be fair to Truss’s team, she has kept a conspicuously low profile since leaving office. Boris Johnson, by contrast, has attended the Davos conference in Switzerland, met President Zelensky in Ukraine and visited the Republican leadership in Washington — activities usually reserved for a serving, not former, prime minister.

On Wednesday night Truss was nowhere to be seen at the 1922 Committee’s centenary dinner at the Hurlingham Club in Fulham, west London, a black-tie event where MPs listened to a businesslike address from Sunak over prawn salad and beef fillet. Truss, for many years a habitué of 5 Hertford Street, a private members’ club in Mayfair, and the offices of London’s libertarian think tanks, has also disappeared from Westminster and is mainly found at home in Greenwich, south London, or her constituency of South West Norfolk.

She recently confirmed she would stand again in the safe seat she has held since 2010 and where she is busy campaigning for a new hospital.

Yet however allies frame it, Truss intends to be far more than a constituency MP. Despite the brevity of her tenure at 49 days and the inevitable controversy it will cause, friends say they expect her to draw on the public duty cost allowance (PDCA) — an annual fund of up to £115,000 to cover her office and any other administrative costs arising from her “special position in public life”. She has also held conversations about setting up a think tank to champion free markets and democracy. “Certainly that’s her ambition,” said one friend.

With the budget in prospect, such activity is unlikely to be greeted with delight in Downing Street. Restive MPs are already calling on Sunak to do more to lower the tax burden on businesses and middle-income earners, and set out a bolder vision for Britain’s future.

By arguing that her central vision, if not her execution, was correct, Truss is threatening to giving new life to a cause which has lost influence since her departure. “It doesn’t matter how she does it, the clear end goal is inevitably shifting government policy,” one Tory MP said. Another source said: “The implication is that Sunak is wrong. You can’t escape that.”

One question is whether she has the appeal or resources to pull it off. Truss left a bitterly divided Downing Street team and cabinet. The unique circumstances of her departure mean that many of her most senior ministers and aides are reluctant or unable to play an active part in any comeback.

Thérèse Coffey, her health secretary and closest friend in politics, Suella Braverman, her home secretary, and James Cleverly, her foreign secretary, sit around Sunak’s cabinet table — picked to preserve the peace between the party’s warring factions. Kwasi Kwarteng, Truss’s chancellor, who remains marooned on the back benches, has publicly rebuked her for ignoring his advice and revealed that he told her she was “mad” to fire him over the response to the mini-budget. In her Sunday Telegraph article, Truss admits that reflecting on such experiences “has not been easy”, that events had been “bruising for me personally” and that sacking Kwarteng had “deeply disturbed” her. The relationship between the pair, previously the closest of allies, is unlikely to fully recover.

Simon Clarke, her levelling up secretary and another author of her tax cuts, recently held a red wine reception in parliament to launch a new “Trussite’’ caucus for MPs, the Conservative Growth Group (CGG). Over the past week, a number of MPs passionate about a return to a low-tax agenda have been added to its WhatsApp group. Yet those involved say both have little to do with the former prime minister. One member said: “The aim is to depersonalise a cause that is much bigger than any person.” Having set up the group last month, the ambitious Clarke, 38, and his co-convenor, Ranil Jayawardena, 36, Truss’s former environment secretary, have also got what one MP described as first mover advantage on any rival outfit set up by Truss, to whom both remain loyal and sympathetic. “It’s not about anyone versus anyone but we all think that these principles are bigger than any one individual, that’s the reality of it,” a member said.

Another of her staunchest public supporters while in office, Jacob Rees-Mogg, is spending time considering how to revive the right. One Tory source said: “He definitely thinks he can be leader of the opposition [following a Sunak election defeat].”

There are rumours that Rees-Mogg could become chairman of the right-wing think tank the Legatum Institute, or seek to create a new parliamentary grouping. In any case he is likely to blaze his own trail. “The chance of him using his goodwill and reach to help rehabilitate Liz are zero,” a source said.

Jacob Rees-Mogg is not expected to back Truss in a comeback bid
Jacob Rees-Mogg is not expected to back Truss in a comeback bid

The same is said to apply to many of the MPs on the right of the party who coalesced around Truss, a Remainer, and helped deliver her victory in the leadership race last summer. The European Research Group (ERG), once the kingmaker of Tory politics, is far less influential than it was, with many of its members still feeling “burnt” by the experience of watching Truss’s premiership, and their aspirations disintegrate on contact with reality. “These people backed Truss tactically,” said a source. “It’s not like Boris or Michael [Gove] who have their people who have backed them for ever. She probably has a handful of actual supporters in reality, no more.” The source added: “A lot of them are actually ‘Boris people’ anyway and only resorted to Liz because of Boris’s removal.”

According to MPs, despite chatter about a Truss comeback, there has been little noticeable increase in activity on the WhatsApp groups which helped her to victory less than a year ago. Last week Mark Fullbrook, her Downing Street chief of staff, re-engaged with one, but only to share a screenshot of an article saying he had returned to his lobbying business and was open to “new challenges”. He is not expected to play a central role in her post-premiership life.

Jonathan Isaby, the well-liked former chief executive of the Taxpayers’ Alliance, remains her press secretary, although her team is sufficiently small that she has recently been forced to do much of the outreach to allies and think tanks herself. One person said Truss had recently sent a WhatsApp message to a Tory organiser which amounted to “how are you?”, without any clear purpose.

She is already rekindling relationships with the think tanks that smoothed her passage to high office, although the events of her premiership complicate things. During her days as foreign secretary, Truss came to personify the Tory party’s hawkish tendency on China. Yet elements of the Interparliamentary Alliance on China (Ipac), which is organising the conference at which Truss will speak next month, are said to be ambivalent about her return. Such feeling is not limited to Labour MPs on the cross-party group. Sir Iain Duncan Smith, who rejected a cabinet role in Truss’s government after being overlooked for a more senior role, is said to remain bruised. Asked if she was actually a member of the group, Luke de Pulford, its director, said it “hasn’t even been discussed”.

In her op-ed, Truss says she faced not only internal economic orthodoxy, but was “swimming against the international tide” too. If she is to make any kind of comeback, she may have to go it alone.

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