Liz Truss: More than a lettuce?

Abstract

Anthony Seldon (with Jonathan Meakin), Truss at 10: How Not to Be Prime Minister. Atlantic Books. 2024. 366 + xvi pp. £22.00 (hbk). ISBN: 978-1805462132. £12.99 (pbk). ISBN: 978-1805462163. £11.99 (ebk). ISBN: 978-1805462156

Liz Truss, Ten Years to Save the West: Lessons from the Only Conservative in the Room. Biteback Publishing. 320 pp. £20.00 (hbk). ISBN: 978-1785908576. £10.99 (pbk). ISBN: 978-1785909238. £14.99 (ebk). ISBN: 978-1785908637

On 6 September 2022, Liz Truss replaced Boris Johnson to become Queen Elizabeth II's 15th and last prime minister of the United Kingdom. Two days later, the queen was dead. Following a short period of official mourning, Truss and her Chancellor of the Exchequer¹ Kwasi Kwarteng launched a ‘mini-budget’ which was intended to cut taxes dramatically without any immediate matching spending cuts. Coming on top of an earlier (and potentially extremely expensive) commitment to subsidising energy prices, this sparked a serious financial crisis. This led to Truss dismissing Kwarteng and installing a new chancellor, who then scrapped almost the entire proposed fiscal package. This U-turn, together with bond-buying by the Bank of England to stave off a potential collapse of pension funds, stabilised the markets. However, she had been compromised by this reversal of her signature policy, became subject to public ridicule, and quickly lost the support of the parliamentary Conservative Party. She had little option but to resign as Conservative leader and prime minister on 20 October after just 44 days in 10 Downing Street. Five days later she was replaced as prime minister by Rishi Sunak. This was the shortest period of office of any British prime minister.

On 11 October, The Economist (2024) had published a leader column which compared Truss's expected shelf-life to that of an iceberg lettuce. This image was seized upon by the tabloid Daily Star, which began to livestream a wilting supermarket lettuce, soon attracting a huge number of viewers and becoming a meme which persisted well after her resignation. In August 2024, for example, Truss walked out of a stage appearance to promote Ten Years to Save the West after some jokers unfurled a remote control banner with a picture of a lettuce and the legend ‘I crashed the economy’ (BBC News, 2024). She was reportedly unamused.

The Truss government was certainly something of a fiasco. But why? These two books offer contrasting reasons. While Sir Anthony Seldon largely blames the personal inadequacies of Britain's 56th prime minister, Truss herself sees her administration as fatally undermined by ‘the Blob’, an amorphous grouping including “the quangocracy, an unaccountable judiciary and undemocratic international institutions” (p. 286). She argues that her experience suggests that bringing about radical change to a political consensus that is stifling economic growth in Britain and elsewhere in the West faces formidable obstacles.

So was the Truss episode no more significant than a tired lettuce? Or was her failure symptomatic of a deeper malaise?

Both Seldon and Truss were fairly prominent public figures well before her brief premiership, but they had never spoken until a summer party in July 2023. Seldon recounts the occasion:

Seldon's book, and his method of approach, need contextualising. He is a prolific author, having written or edited 50 books (conveniently listed at the back of his Truss volume). He has written on a variety of subjects, but many of his books concern the role of prime minister, a job which he calls ‘the Impossible Office’ (Seldon et al., 2021). He has covered most post-war British PMs: volumes have appeared on Winston Churchill, Edward Heath, Margaret Thatcher, John Major, Tony Blair, Gordon Brown, David Cameron, Theresa May, Boris Johnson and now Truss. I imagine he is already working on Truss's successor, Rishi Sunak. Each of the volumes from Gordon Brown onwards have been titled ‘So-and-so at 10’.

Seldon is not the typical twenty-first-century senior academic, with time and a large research grant on his hands. He has been, for much of his adult life, a part-time historian. His day job was for many years as the Master of Wellington College, a leading independent school. Subsequently he headed the University of Buckingham (where I work and made his acquaintance) for a five-year stint, and then went back to secondary education, taking over a school whose head had been murdered in tragic circumstances. Apart from these commitments, Seldon has for years been a busy media commentator on the political scene. So the production of this substantial book, only 18 months after the activities it chronicles, is an impressive achievement – as were his previous volumes of instant history.

So how does he do it? Well, he's not quite the lone author and in Truss at 10 he explains (pp. 15–16, 331–2) how his publications are a team effort. In this case his team was fronted by Jonathan Meakin, with whom Seldon has collaborated on previous occasions. With the team, he sets out the structure – chapter heads – for the book. He then carries out the interviews, 120 in this case, with participants in the events covered. These constitute, he says, about 80 per cent of the content of the book. The team “produces briefings for each chapter, integrating these with other published and documented material”. He then has “the easy and fun part, writing the book” (p. 331).

The structure chosen for this volume is interesting. Seldon has previously – in his book The Impossible Office? (Seldon et al., 2021) and in a New Statesman article (Seldon, 2022) – set out conditions which he believes are necessary for a prime minister to be successful in office, and which most inevitably fail to achieve. In the Truss book he offers a variant of these approaches. Although there is a semi-chronological sequencing, it is the conditions for success, ten in all, which provide the chapter headings.

The first requirement is to ‘Secure the Power Base’, which in Truss's case was the Parliamentary Conservative Party. As Seldon points out, right from the start Truss's position was shaky. She had only a very limited following amongst MPs and was not the parliamentary party's choice for leader; in the first ballot she came third, and after a series of eliminations she was still well behind Rishi Sunak in the final vote. Her accession to the leadership depended on the votes of Conservative Party members in the country, and a substantial block of MPs never really supported her and indeed were hostile from the start.

Then, says Seldon, prime ministers need to have ‘A Clear and Realistic Plan for Government’. Unlike her three immediate predecessors (Johnson, May, Cameron), Truss had strong ideological priors, and her strategy was clear: it involved tax cuts, deregulation and shrinking the state. But she had not established a consensus amongst her MPs for rapid action. Seldon argues that her haste in producing the mini-budget, her insistence on bypassing or disregarding the establishment (the Bank of England, the Treasury and the Office for Budget Responsibility) and an ill-thought-out energy price guarantee were unrealistic.

A prime minister must ‘Appoint the Best Cabinet/Team’. Seldon is of the opinion that Liz Truss should have brought in the most talented and most representative members of the party, irrespective of their political stance, to give her a chance of maintaining a strong government. Instead of choosing a broad-based cabinet, she chose a mediocre team which largely consisted of friends and supporters and left out many experienced and substantial figures (p. 103).

Prime ministers must ‘Command the Big Events’. In her first weeks, Truss faced two such big events: the death of the queen, and the energy crisis – sharply rising gas prices consequent on the Ukraine war. While Seldon concedes that Truss conducted herself with dignity over the transition to the new monarch, she lacked a “sense of history and personal gravitas” (p. 143), which meant that she did not rise to the occasion with the flourish and unifying rhetoric of a Churchill but rather shrank into the background, worrying about tripping up during ceremonial duties. As for energy, having first ruled out any support package, Truss was “spooked” (p. 121) by briefings and went to the opposite extreme, announcing support which threatened at the time to cost up to £150 billion, though in the end it cost more like £40 billion.

Seldon also thinks a successful prime minister must ‘Be Credible and Highly Regarded Abroad’. Despite her experience as foreign secretary, Truss is seen as failing this test. She was solid on Ukraine, and a robust critic of China. But Seldon sees her as failing to get on with the Europeans and, particularly, the Americans. President Biden, he says (on no quoted evidence, incidentally) “viewed Truss sceptically as a know-nothing upstart” (p. 159).

You must ‘Learn How to be Prime Minister’ by being prepared to listen and take advice. Here Seldon sees Truss as constitutionally incapable of taking on board and really hearing views which conflict with her own. She is fundamentally lacking in judgment (p. 184).

It goes almost without saying that PMs should ‘Avoid Major Policy Failures’. Seldon can hardly avoid seeing the mini-budget as a massive policy error. He calls it the “greatest example of its kind in modern history” (p. 216). Part of this was its timing, for it “might have worked earlier in the year, but not with inflation running at 9.9 per cent and the expectation of it rising to between 11 and 12 per cent” (p. 216).

Of course, a PM must ‘Maintain a Reputation for Economic Competence’, and the fallout from the mini-budget appears to be Truss's most obvious failing. The expensive energy price cap commitment, followed by cutting taxes without accompanying spending cuts,² led to a domestic financial crisis, with bond yields shooting up, and a run on sterling which left the pound at its lowest-ever value against the dollar.

Seldon's ninth rule of premiership is ‘Avoid U-turns’ on major policy issues. In light of the reaction to the mini-budget, Seldon believes Truss had no option but to scrap the proposals. But this is “beside the point. She implemented the biggest U-turn in modern prime ministerial history and it didn't work for her” (p. 284).

Finally, a PM must ‘Retain the Confidence of the Party’. As noted earlier, Truss never had a strong base in the parliamentary party, and did nothing to build one. With the mini-budget crisis, followed by resignations and a botched vote on fracking, the febrile mood of Conservative MPs made her continuation in office impossible.

While it is difficult to dispute some of this analysis, there is a rather predictable feel to it all. Seldon clearly doesn't think much of Liz Truss, or of her project of radical free-market economics. Sir Anthony is, as many readers will know, the son of Arthur Seldon. Arthur was, together with Ralph Harris, a key figure in the development of the IEA (and the founding editor of this journal). He was a leading influence in the revival of policy-directed classical economic thinking in the UK and the wider world from the 1950s to the 1980s. It is interesting to speculate whether he would have been more sympathetic to Truss than his son, who incidentally doesn't seem to think much of today's IEA.³ Sir Anthony's politics are rarely explicit but are broadly centrist. He was strongly against Brexit, and he has a very low opinion of Boris Johnson. He respects the expertise of the Treasury and the Bank of England. He's probably not a fan of Donald Trump.

To be fair, Seldon does occasionally try to balance his criticisms of Truss by mentioning some of her strengths. He thinks she was making a tolerable fist of her role as foreign secretary, and emphasises that she was good at appreciating intelligence and reading reports (p. 163). He credits her “irrepressible optimism” (p. 168), her energy (p. 170) and (in sharp contrast to Johnson) her hard work (p. 172).

Nevertheless, the overall impression is very strongly negative. It is fed on page after page by comments usually attributed to ‘an aide’ or ‘an official’, which are simply opinions or speculation with little factual basis. Thus Truss is “robotic, brain-dead” (p. 28) “stupid and capricious” (p. 38), she displays “verbal incontinence” and “preening” (p. 61), her grasp of market economics is “superficial” (p. 68). She is said to suffer from “a deep inner anxiety” (p. 78), she is “a figure of ridicule” (p. 104), is “plain bonkers” (p. 169), “irritable, paranoid and even unhinged” (p. 179) and possibly autistic (p. 181). She is “intolerant and suspicious” (p. 179). She seems “positively to rejoice in aggravating colleagues” (p. 60), and enjoys “humiliating her team in front of others” (p. 79). Referring to her support for the cut in international development spending under Johnson, Seldon himself says that “any human damage caused by these cuts was of no apparent concern to her” (p. 151). Elsewhere, rubbishing two birds with one stone, he writes that “her vanity, neediness and willingness to trample over others was of Johnsonian proportions” (p. 184). Remember that, although Seldon has evidently listened to a lot of people bad-mouthing these successive prime ministers, he has not spoken to either Truss or Johnson about their careers and experience.

Occasionally this sort of stuff takes us into dangerous territory. For example, there is speculation about a dossier said to contain details of “her indiscretions, her drinking and even cocaine use by others among her team” (p. 43). This is just a possibility mentioned in passing as a fear expressed by “one of her team”, and there is no evidence that such a dossier ever existed or that its alleged contents have any substance. But there is a smear there which cannot avoid leaving an impression on the reader.

An even more egregious example refers to the hectic hours when Truss and Kwasi Kwarteng were considering spending cuts to offset their planned tax reductions. Alex Boyd, a civil servant, is met by colleagues who tell him that “We've been told that they're looking at stopping cancer treatment on the [National Health Service]” (p. 245). It's not easy to make out who is saying what, but this appears to be Boyd telling Seldon that he was told by colleagues that they had been told that Truss and Kwarteng⁴ were considering this. Needless to say, this several-degrees-of-separation hearsay found its way into the media on the book's publication (e.g. Stacey, 2024), forcing Truss to deny that such an implausible policy was ever considered. Possibly some advisor or even one of the principals themselves made a joke in poor taste, but the idea that Truss was seriously prepared to put lives at risk in such a manner is just another example of the way in which she is repeatedly painted in the worst possible light.

As I have said, Seldon's method involves a heavy reliance on interviews with nameless individuals. We have no way of knowing who these witnesses were, or how much credence should be given to them. Many will have been relatively junior (and probably now rather disillusioned) members of Truss's entourage; many will have been political opponents or otherwise have an axe to grind. While obviously needing to protect his sources, it is a pity Seldon could not have given us some indication of the proportions who were MPs, officials or advisors, and how exactly they were recruited. Did they volunteer, or were they approached by Seldon's team? If the latter, how many of those approached refused? And it would be useful to know how the interviews were structured: was there a set of standard questions, or were they more free-flowing?

It would also be interesting to know the extent to which the drafts produced by his researchers shaped Seldon's conclusions. Were the extensive negative remarks I have noted chosen to support a prior view, or were they forced to his attention because so many interviewees were critical of Truss?

This is not, therefore, a study of the kind which leads to refereed articles in academic journals. It's not necessarily the worse for that, as the general reader will find it flows along nicely, but Seldon is not a trained political scientist. Nor, of course, is he an economist: one of the weaknesses of this book is its neglect of economics. There is no analysis of the UK's poor economic performance to which Truss and Kwarteng were reacting, and no serious examination – which could already have drawn on extensive official and academic sources – of what they were proposing. The financial market reaction to the mini-budget is barely covered, and in particular the issue of the liability-driven investments (LDIs)⁵ is only sketched very briefly.

I admire Sir Anthony, and this rapidly-produced book is a considerable achievement. But it is essentially long-form journalism, rushed out to meet a demand for in-depth storytelling and comment before the brief Truss government is forgotten by opinion-formers and the media. A first draft of history? Maybe, but there is surely much more to be said about this episode as time passes and the dust settles.

It is worth emphasising that Liz Truss was better-prepared to be a prime minister than many people think; better-prepared indeed than several of her predecessors and the majority of her rivals for the Conservative leadership.

After university (where she was a Liberal Democrat rather than a Conservative), she worked in the private sector and qualified as a chartered management accountant, later becoming economic director at Cable & Wireless, a telecoms company. After unsuccessful attempts at standing for Parliament, she became deputy director of Reform – a centre-right think tank, not the political party currently headed by Nigel Farage. There she wrote several pamphlets, developing her ideas about educational reform.

I should say here that it was at Reform that I first met Liz Truss, when we discussed a report she had written on mathematical education. I am certainly not a personal friend, but we have met a few times over the years, sufficient perhaps to form a view of her abilities which predates her dramatic rise and fall. I find it difficult to square my impressions of her, as a clever and funny – albeit sometimes rather socially awkward – hard-working political animal, with the deranged Cruella de Vil portrayed in Seldon's volume.

Following her stint at Reform, and a spell as a local councillor, Truss entered Parliament in 2010. She was an active backbench MP, organising several local initiatives, and became a co-founder of the Free Enterprise Group, a Thatcherite tribute act which included several MPs who would later become prominent, including Kwasi Kwarteng, Priti Patel and Dominic Raab. The Group published After the Coalition and Britannia Unchained, lively books that advocated tax cuts and reducing the power of the state, themes which underlay her time in Downing Street.

David Cameron appointed her to be education under-secretary in 2012 and from then on she had an unbroken record of ten years' service in government under three prime ministers, including appointments as environment secretary, justice secretary, chief secretary to the treasury, international trade secretary and foreign secretary.

Ten Years to Save the West is a dramatic title. However, much of Liz Truss's book is a relatively low-key account of her experiences as a politician. Of the 14 chapters, only three cover her time as prime minister. The book is straightforwardly written, without the huge apparatus of dates, quotations and footnotes which make many politicians' memoirs unreadable. As far as I can tell, it is all her own work.

The chapters about her earlier ministerial roles are revealing, for her frustrations tell us a good deal about the confrontational way she would later approach her prime ministership. Her earliest role in government was as a junior education minister – to which role she was in principle well suited, having devoted a good deal of time and thought to education and childcare while at Reform. However she found that it was difficult to get civil servants to rethink entrenched positions or do anything in a timely manner. She writes:

She soon ran into vested interests such as commercial nurseries and the influential Mumsnet website, when she tried to push a modest dose of childcare deregulation. She also found political difficulties with the Liberal Democrats (then in coalition with the Conservatives), who eventually blocked her proposals. There were also considerable difficulties with the drive – led by Secretary of State for Education Michael Gove, with whom she was later to fall out – to raise educational standards, with teachers' unions and professional bodies resisting moves to reverse the ‘progressive’ orthodoxy.

Her next job was with the Department for Environment, Food and Rural Affairs. In writing about her experience there, Truss develops a favourite theme – the hijacking of the agenda of departments by non-governmental organisations (NGOs), often ‘charities’ with symbiotic relationships with the government which largely funds them:

In the chapter covering her short (just 11 months) stint as justice secretary, she found it difficult to make progress, and was dragged into an argument about the independence of the judiciary. Again she finds that non-governmental bodies and civil servants control too much of the agenda while here-today-gone-tomorrow politicians struggle to master their brief and determine policy before they are moved on in the next reshuffle.

She continues in a similar vein when discussing her time as international trade secretary and foreign secretary. Reflecting on the latter role, she widens her criticism of the UK's failings to international institutions such as the World Health Organization and the United Nations, and to the COP26 jamboree and foreign-aid disbursement. But her chief criticism is focused on the way in which the UK economy has been held back by the Treasury's grip on macroeconomic policy and its ‘abacus accounting’ (her term) which she believed was preventing the radical tax-cutting measures and deregulation which she favoured.

Opposition to the Treasury's influence is of long standing. Back in the 1920s and 1930s Keynes was a critic of the ‘Treasury View’ (Clarke, 2005) which rejected the expansionary fiscal policy he advocated. Then in the 1960s Labour's Prime Minister Harold Wilson was so determined to weaken the Treasury's power that he set up a short-lived rival Department of Economic Affairs.

Part of Truss's criticism of the modern Treasury is that it combines both the economic and the accounting functions of the government, something which is unusual internationally. Under Labour Party former Prime Ministers Tony Blair and Gordon Brown, she asserts, “the Treasury orthodoxy had shifted to the left and away from the free-market economics we wished to pursue” (p. 233). Moreover, the Treasury had “spread its tentacles over domestic policy”. Rather than simply imposing spending caps on departments, it increasingly controls what money is spent on.

Furthermore, the Bank of England's independence, granted under Gordon Brown in 1997, took monetary policy out of the politicians' hands. And Chancellor of the Exchequer George Osborne, under the 2010–15 coalition government, set up the Office for Budget Responsibility (OBR): this is a body providing independent forecasts of the effects of changes in government policy. Despite an underwhelming performance as a forecaster, the OBR “gradually developed a life of its own and now essentially sets fiscal policy” (p. 234).

In Truss's view the Treasury, the Bank of England and the OBR are all adherents to a high-tax, big government, high-regulation consensus which has held back the economy. She and Kwarteng were determined to break with this consensus as they pursued their project to boost growth through economic liberalisation. Ideally Truss would have liked to “go in very hard, abolish the OBR and appoint senior leaders in the Bank of England and Treasury who were prepared to challenge the orthodoxy” (p. 241). But abolishing the OBR would have required legislation, and the governor of the Bank of England could not be sacked, so the only immediate change of substance was the replacement of Permanent Secretary to the Treasury Sir Tom Scholar. However, Truss and Kwarteng initially kept the governor of the Bank of England at arms' length and did not involve the OBR in assessing the likely impact of the mini-budget.

There are no great revelations in the chapters on Truss's weeks as prime minister, though she argues (p. 242) that the costs associated with the mini-budget were exaggerated and that nobody in the Treasury had told her team about the notorious liability-driven investments (pp. 252–3). She admits that she could have handled some things better, but there is little suggestion of repentance. On the contrary, she sees the apparent reactions of ‘the market’ to her government as being the result of the lack of support she received from the Bank, the Treasury and other elements of the establishment, including those sections of the Conservative Party who had not accepted the legitimacy of her leadership. She writes:

We probably shouldn't quibble too much about terminology, but is conservatism really what we are talking about here? Conservatives, almost by definition, are averse to change. Indeed Truss's criticisms of her own Conservative Party make the point that too many of her colleagues – the twenty-first century equivalent of Mrs Thatcher's ‘wets’ – were content with the status quo, not prepared to challenge the orthodoxies which had grown up since the time of Tony Blair and Gordon Brown and paying only lip service to belief in free markets, controls on immigration, and free speech. What Truss really wants is an approach much closer to classical liberalism. In our time this means a radical break with the big state, high taxes and government regulation and control of every area of economic life.

Be that as it may, what are the lessons she wishes to impart?

Lesson 1: We must be conservatives. This means starting from conservative principles about individuals and families controlling their own lives. “It means defending property rights, free speech and the rule of law. It means standing up for sovereignty, the nation state and British exceptionalism” (p. 290). It also means rejecting “net zero zealotry” and “wokeism”, and avoiding “compromise and triangulation”.

Lesson 2: We must dismantle the leftist state. Truss asserts that “we are not going to succeed in implementing conservative policies while the leftist state apparatus remains intact” (p. 292). The Human Rights Act, the Equality Act and the Climate Change Act are “totems of left-wing belief, which have too readily been accepted by conservatives as immoveable. We should be prepared to abolish them” (p. 293).

Lesson 3: We must restore democratic accountability. “As trust in the political system has been eroded, politicians have ceded yet more authority to unelected officials” (p. 293). The Bank of England must be more accountable to elected politicians while quangos such as the OBR must be abolished. As in the United States, the government should have the power to appoint senior civil servants (p. 294).

Lesson 4: Conservatives must win across the free world, particularly in the United States of America. Truss believes that “The left is much more adept at organising across the globe and has done so all too effectively to roll back the achievements of conservatives … Those of us on the right need allies if we are to change attitudes and win the battle of ideas once again” (p. 298). This seems to involve creating alliances between political groupings in different countries.

Lesson 5: We must reassert the nation state. If informal political links across borders between like-minded politicians are to be encouraged, international economic institutions such as the World Bank and the International Monetary Fund (the latter criticised the mini-budget) should definitely not be. Nor should the World Trade Organization, the World Health Organization, and the UN, on which UK taxpayers spend too much money. And the UN Refugee Convention and the European Court of Human Rights are “no longer fit for purpose as they stand” (p. 299): they are “increasingly being used and abused by activist lawyers” to subvert policies to limit immigration or to deport criminals.

Lesson 6: We must end appeasement. “Appeasing our enemies does not work … we seem still to be at risk of repeating the mistakes of the 1930s, this time with China, Russia and Iran” (p. 300). In particular, we should deny China access to our markets and treat as a pariah anybody doing business with China. “We also need to be much tougher on those in our own countries who are supporters of hostile regimes” (p. 301). Britain should designate Iran's Revolutionary Guard Corps as a terrorist organisation, and “closing down the Confucius Institutes⁶ is long overdue”.

It's all strong stuff, but a long way from deciding whether to reduce corporation tax or set an energy price gap, which were Liz Truss's immediate concerns when she came to power. Is it overblown? Will it age well?

If, as Harold Wilson may or may not have said, a week is a long time in politics, the time since Liz Truss's government expired seems an eternity. The political scene has changed considerably.

Her view of the international ‘turn to the left’ turns out to require considerable qualification. Two days before Truss resigned, Giorgia Meloni led the right-wing Brothers of Italy into government. In December 2023 the chainsaw-wielding free-market economist Javier Milei became president of Argentina. In November 2024 Donald Trump won a second term as US president and, with the energetic assistance of billionaire Elon Musk, plans an assault on big government. Meanwhile, there have been electoral gains for the right in countries such as France, Germany, the Netherlands and New Zealand.

Britain, perhaps temporarily, bucked the trend by electing a Labour government in July 2024. This was unsurprising: the fratricidal Conservative Party, having burned through four leaders in six years, ended up appointing Rishi Sunak, who had lost to Truss in the Conservative contest only two months previously, without any further mandate from the membership. Although Sunak's leadership calmed markets and was associated with a slight upturn in growth, the inability of his government to control immigration – especially the highly visible channel-crossings in small boats – fuelled continual unrest, and in a surprise move he called a general election six months earlier than he needed to. The result was a massive victory for the Labour Party, with the Conservative Party winning its smallest number of parliamentary seats since its emergence in the early nineteenth century.

Yet the new government achieved its parliamentary majority with less than a third of the total votes cast and it has rapidly run into problems of its own. Rachel Reeves, the Labour chancellor of the exchequer, produced a budget in October 2024 which was almost a mirror image of the Kwasi Kwarteng proposals. Despite agreeing with the Truss government that the prime aim must be to increase growth, Labour raised taxes and government spending rather than reducing them. Like the Truss–Kwarteng mini-budget, however, it proposed a big increase in government borrowing. This has led to the financial markets turning against it, with gilt (government bond) yields now at their highest level since the 2007–08 global financial crisis, exceeding the levels reached immediately after the mini-budget. This has led Truss to claim that this vindicates her position in 2022. Indeed, she has even had the chutzpah to get her lawyers to send a ‘cease and desist’ letter to Prime Minster Keir Starmer, requiring him to stop the “false and defamatory” claim that she “crashed the economy” (Riley-Smith & Wallace, 2025).

It is doubtful whether legal threats will stop the general public from making up their own minds. But it is probably worth making the point that the charge of having crashed the economy is greatly overblown (Europe Economics, 2024). There was never really any significant negative impact outside the financial markets. Output and employment remained stable. As Professor Stephen Millward, of the usually politically neutral National Institute of Economic and Social Research, put it a year after the event, the only group that permanently lost out was those remortgaging in the month after the mini-budget, when mortgage rates shot up (Millward, 2023).

While the problems facing Rachel Reeves may suggest that the Truss–Kwarteng proposals were not uniquely destabilising, they do perhaps rather undermine Truss's belief that the reaction against the mini-budget was orchestrated by the Blob's antipathy towards free market policies. If a package of big state–big tax measures met a similar reaction, it does rather undermine a simple conspiracist story.

But leaving aside the political point-scoring, there have been developments in our understanding of the mechanics of the autumn 2022 financial crisis now that the number-crunchers have got to work.

In the immediate aftermath of the collapse of the Truss government, a number of commentators claimed that, as most of the mini-budget proposals had been pre-announced during Truss's campaign for the Conservative leadership, they would have been ‘priced in’ to market expectations. While there would have been some effect as a result of the energy price cap announcement and the unheralded proposal to scrap the top rate of income tax, the market volatility went beyond what would reasonably be expected (Moynihan, 2023). On this view, implicating the amplifying effect of liability-driven investments, the Bank of England was at least partly responsible for the crisis through poor financial regulation and its own policy actions.

Pension funds need to match predictable liabilities with assets. The financial authorities had encouraged them to invest in gilts, which are needed to finance government borrowing. Gilts have a relatively low return, as they are extremely safe assets. The authorities turned a blind, or at least benevolent, eye to investing in LDI funds which used holdings of gilts as collateral for borrowing to buy more government bonds and derivatives on credit. This enabled them to make higher profits. However, this is a source of potential instability, as if interest rates rise lenders will demand more collateral. As rising interest rates imply falling bond prices, holders will attempt to sell the gilts to minimise capital losses. Thus the potential for a ‘doom loop’ – which led the Bank of England to step into the market to buy bonds and shore up the price.

Critics argued that rising US interest rates and the expectation that the Bank of England was about to embark on ‘quantitative tightening’⁷ meant that we had a situation where a crisis was just waiting to happen. In this view, the mini-budget was the spark that lit a larger crisis than was justified by its actual content. And some blame attaches to the Bank and financial regulators for not realising this until it was too late.

This was the theory. Research published by the Bank of England has now put some empirical flesh on these theoretical bones. A paper by Pinter et al. (2024) has suggested that at least half the fall in gilt prices during the mini-budget crisis was the result of LDI selling, while a study using a different approach by Alfaro et al. (2024) attributed two-thirds of the rise in 30-year borrowing costs to the fallout from LDIs.

While this research may mitigate the opprobrium attached to Liz Truss and Kwasi Kwarteng by suggesting that the market reaction to the mini-budget was exaggerated and perhaps, as Seldon suggested, to some degree a matter of unfortunate timing, there still remain serious questions about the speed with which it was rushed out, and the wisdom of announcing tax cuts without at least some indication of eventually matched expenditure cuts. Truss and Kwarteng seem to have believed that, because the markets had been willing to countenance vast increases in public debt during the Covid lockdown, they'd be as accepting of fiscal incontinence under more normal conditions. Making big tax cuts would produce ‘shock and awe’, a sign that they really meant business. They were overly optimistic – as, for that matter, Rachel Reeves has been. As a result, a real opportunity to make some progress in boosting growth in the moribund British economy by cutting back the size of the state and hacking away the knotweed of regulation was lost in pursuit of the sugar rush of tax cuts.

These issues will be mulled over for some time. Meanwhile, bloodied but unbowed, Liz Truss remains up for the fight and is rarely out of the news both in Britain and the USA. Despite losing her parliamentary seat, and still facing widespread vilification, ridicule and humiliation, she remains, as she told the House of Commons as her government collapsed, “a fighter, not a quitter”.

A wilting lettuce she is not.