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19 September 2023

Liz Truss is more realistic than you might think

The former prime minister was unrepentant about her time in office in a speech yesterday – but knows her free-market ideas are unpopular.

By Freddie Hayward

Liz Truss has returned to the stage, without contrition. One year on from the mini-Budget, Truss chose the Institute for Government as the place to defend her record yesterday (18 September). She said the low growth and rising debt of recent decades was explained by the prevailing “economic consensus” – something she said she wanted to “shatter”. Her incompetence in office partly prevented her from doing just that. But the Trussites haven’t given up hope they can win over the Tory party and implement their ideas (as Rachel Cunliffe sets out in her cover story).

While Truss’s policies still have some fans within the Conservative Party, she herself is no longer seen as credible. Kwasi Kwarteng – her once-closest ally – recently told the Telegraph’s Ben Riley-Smith: “I just don’t think her temperament was right. She was just not wired to be a prime minister.” The party’s free-market wing will continue to agitate, particularly if it goes into opposition. But it seems unlikely that Truss will head the faction.

There’s a bigger problem for the free marketeers than their leader. The most revealing comment Truss made was an acknowledgement of the unpopularity of her ideas:

“Even these modest [spending cuts] did not command the support of the Conservative parliamentary party. And it’s a very serious issue for us who want to see smaller government that, currently, making significant changes to spending simply doesn’t have enough political support… The fact is that supply-side economics and the belief that the size of the state needs to be reduced are ideas that no longer command widespread support and understanding.”

Indeed. She explained well the risk for the Conservatives of returning to her ideas after the next election; tax and spending cuts aren’t the dish of the day. And then there’s her party. Cast your mind back to last year and you’ll remember the significant opposition within the Conservative Party to the spending cuts necessitated by the tax cuts, particularly over a real reduction in benefits. That division hasn’t gone away; and it’s unlikely to be resolved if the Tories return to opposition: it is easier to stipulate that tax cuts will pay for themselves without the pressures of actually governing.

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Truss found time in her speech to call on the government to cut taxes, rethink net zero and raise the retirement age. It’s pretty extraordinary for a former prime minister to be so critical of a government led by their party one year out from an election – it’s yet another distraction for No 10. Truss doesn’t seem to mind; she is acting as if the party is already in opposition.

This piece first appeared in the Morning Call newsletter; subscribe to it on Substack here.

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[See also: The return of the free-market right]

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