Liz Truss refuses to apologise

Liz Strauss, do you have an apology for the people whose mortgages went up so much during your time in office? Well, I I questioned the premise of what you’re asking me, Ed, because the fact is mortgage rates have gone up across the world. The issues that I faced in office were issues of not being able to deliver the agenda I’d set out because of a deep resistance within the British economic establishment. I think it’s wrong to suggest that I’m responsible for British people paying higher mortgages. That is something that has happened in every country in the free world. And as I said in the leadership election back in 2022, the reality was that interest rates have been too low for too long and I think that’s part of the cause of the economic problems that Britain is currently experiencing. So, so, so even though mortgage rates did go up, you you’d concede they went up very sharply during a time in office. Well, they, they have gone up everywhere. Yeah, but they went up. There was a global rise. There was a global rise in mortgage rates. And I think it’s disingenuous to say that was as a result of the policies I pursued. Now, we had a specific issue with the gilt market, but that issue was driven by the actions of the Bank of England. And what frustrates me, Ed, is the fact that journalists like you are not asking those difficult questions of the Bank of England, of what they did in autumn 2022. The the reason I asked though, is that so, so I was, I was covering this at the time and I kind of remember looking at, you know, all of these charts and trying to, you know, yeah, conceding the Bank of England was a part of this. But for instance, you know, rates, while the Bank of England was, you know, moving towards tightening interest rates, quad state of easing, they were kind of going up a bit and then suddenly they went through the roof directly after the mini budget. So there is, you know, pretty much kind of clear cause and effect Ed exactly at the same time. That was when the government governor of the Bank of England announced that he was selling £40 billion of government guilt. Well, it’s not quite the same time. It wasn’t quite the same time That was that was that was one day and then the next day came the mini budget. It’s exactly the same time. These these shots are day by day and day by day. You can see not much going on. And then the mini budget happens. This is, for instance, the the cost of insuring the UK against default and then suddenly up goes that that cost. So the UK becomes a scarier place for investors straight after the mini budget. This is day by day, but you’re not talking about the actions of the Governor of the Bank of England, The Governor of the Bank of England. Well, but what I’m saying is that the specific issues that caused the difficulties in the market were largely as a result of decisions made by the Governor of the Bank of England. And I explained this in my book, 10 Years to Save the West. And I think it’s important for Sky viewers to read the book and see my explanation of what happened. OK. But I’m just, and I do think it’s a problem when elected politicians are held responsible for decisions they don’t have any ability to influence. And that is what has frustrated me about this situation. I’m not saying that I got everything absolutely perfect in the way the policy was communicated, but what I am saying is I faced real resistance and actions by the Bank of England that undermine my policy and created the problems in the market. And what I’m also saying, Ed, which I don’t think has been fairly reported, is that interest rates went up, you know, in the United States. They want up in continental Europe and I don’t think it does. I don’t think it does any service to the British public to not tell the truth about why that happened and the fact that we’ve had failed policy for a number of years, which is the responsibility of the Bank of England. OK. So, so you, that you clearly there were some issues with the Bank of England governor and you you lay them out in, you know, in your book, Ed, have you ever questioned the Bank of England governor on these issues? Yeah, we have. I mean, but that’s that’s what I was doing at the time, you know, why we we were asking questions about the bank, about its monetary policy, about why it hadn’t necessarily done some of the scrutiny that it could have done on, on, you know, what happens when interest rates go higher? What about the LDI crisis? Well, their failure to properly regulate LDRS? Yeah, I know we, we were covering that kind of through the time day by day. So I kind of, I remember it kind of quite, quite vividly. I suppose my question to you is you, you had all these problems with the Bank of England Governor, and you talk about it, you know, in depth in, in in your book. He’s in, in a sense, if there’s any kind of villain in it, that’s that’s the Bank of England Governor Andrew Bailey. Simple question. There you are in office. He’s causing all this trouble for you. What did you do about it? Did you, did you call him up and say this, this is problematic? Did you call him in and say, listen, we need to change this? It was a difficult situation because the Bank of England governor deals with the Chancellor of the Exchequer rather than the Prime Minister. But you are the Prime Minister. What I didn’t, what I didn’t want to do, Bank of England Governor, what I didn’t want to do was undermine the Chancellor in him trying to sort out the situation. So did you meet Andrew? Maybe. No, I didn’t. You did and you didn’t. I wanted, I, I actually had a meeting set up and I wanted to meet him, but I was advised that would be a bad idea. And perhaps I shouldn’t, perhaps I shouldn’t have taken that advice, but that advice came from the Cabinet secretary. And what I didn’t want to do is further exacerbate the problems because so you’re blaming the mag of England governor and then you’re, you’re saying you didn’t meet him, but now you’re blaming the cabinet secretary for, for why you didn’t meet him. Well, I’m, I’m, I’m being honest here. I’m saying maybe I shouldn’t have listened to that advice at the time. But what I was very, very concerned about is the country was in a serious situation. I didn’t want to exacerbate that situation by making it worse. So I was in a difficult position. I’d been blindsided by the problems in the LDI market, which was essentially a, a financial tinderbox. I didn’t want to make the situation any worse, even though, as I’ve said, I don’t believe the mini budget was the main cause of the problems. So, you know, I had to be responsible as Prime Minister and not create something that could have, could have resulted in the country not being able to fund its own debts. That’s what I was thinking about at the time. And you know what you’re saying. In retrospect, yes, I probably should have spoken directly to the governor of the Bank of England at the time. This is the man who I brought you down essentially. Well, if I’d known and I make a general critique of the system. So yes, I’m not happy about what he personally did. But I think we’ve got a broader problem of democratic accountability and the fact that monetary policy is now pretty divorced from elected politicians. So I think it’s a system problem as much as it is. You know, I’m critical of particular individuals who acted the way they did. And, and what, what the book is about is not trying to, you know, reinstate myself as Prime Minister. It’s trying to explain. No, definitely not. I have not tried that. What what, what, what I want to do here is explain to people what happened and try and explain some of the problems that are developed in the British system that make it very, very difficult for democratically elected politicians to actually deliver the policy they were mandated to deliver. So that is what I’m trying to do in terms of, in terms though of, of what actually happened. So explaining what happened, is it fair to say that you lost the confidence of the markets? That’s at the crux of this. It’s fair to say that the government did not have the confidence of the markets, which is quite a profound thing, isn’t it? Yes, yes. But if you have organisations within the state like the Bank of England, like the Office of Budget Responsibility, who are pretty clear to people, they don’t support the policies that are being pursued and are essentially undermining those policies, then it is difficult to command the confidence of the markets because the markets look to the government for that leadership. And if they’re hearing different messages from different parts of the institutions, then it makes it very difficult to pursue that policy. So, so, so essentially it’s a failure of leadership really, wasn’t it? Just to be clear, I believe that if the Bank of England had pursued a more supportive monetary policy of what we were seeking to do, we would not be in the position we are now and we would not have had. So you didn’t call them and try try and deal with that at the time? Well, Quasi had a number of meetings with him talking about the policy. And have you ever met him by the way, the Bank of England Governor? No, I’ve, I’ve had various Zoom calls with him, but I’ve never met. You’ve never met him. Would you, would you meet him now? I’d be very happy to. OK. All right. So it’s no, you know, it just does seem like he’s he’s he’s someone he’s the bogeyman in in this book. As I said, look, I, I was not happy about the way he behaved, But I think the problems are much more deep rooted than anyone person. And the problems I face with the economic establishment are more broad problems that we face across government now, which is too much power has been outsourced from elected politicians to unelected bodies. And that makes it very, very difficult to deliver on the mandate, the public said. How do you feel to on precisely that issue? How do you feel about the fact that, you know, a lot of people would say that what happened when you were in office has actually empowered these institutions? It’s made the Bank of England, you know, much more powerful. It’s made the office budget responsibility basically untouchable. So rather than actually taming these institutions, you and your time in office has made them more powerful than they’ve ever been before. I I don’t agree with that. They were always powerful, no, but they’ve become more powerful because of what happened. You surely will concede that. No, I don’t that they were always powerful, but I saw now they are significantly more influential than than they were before because no one after what happened, no one wants to contradict what the OBR is doing. See, when I when I was Chief Secretary to the Treasury, I saw the power of the OBR, the fact that the Chancellor only had as much fiscal headroom or indeed had to make up the difference because of what the OBR dictated. I saw that the chancellor had no involvement in monetary policy. That was back in 2017. It’s always been the case whilst we have been in government that those bodies have that power. What what has now happened as a result of the events of autumn 2022 is that that power has been exposed because I, I was the 1st Prime Minister who actually sought to challenge that. So I would argue that before that the power has not been challenged and essentially ministers have gone along with the actions of the Office of Budget Responsibility and the Bank of England. So what I would say I did is expose the level of power they have in our system. OK, A lot of other people would say that this, this was a really good chance for, you know, some of the free market ideas, the the economic growth ideas that you were espousing and essentially you blew it. And that was, that’s has set back the, the cause of free market reform in the UK. That’s kind of Fair, isn’t it? Because no one really wants to give a shot to those kinds of ideas now. Well, the free after what happened, the free, these ideas weren’t happening anyway. No, it’s not certainly not going to happen now, are they? Well, I disagree with that, Ed, The, the free market ideas were not happening anyway. The supply side reforms that I wanted to see like getting on with fracking, sorting out our environmental legislation, the reforms I wanted to see in terms of holding down public spending, getting rid of net 0 taxes. Well, yes, essentially, by the way, just quickly on, on that front, I’m just trying to answer your previous. Well, I know, I’m just let me answer it. I know, but I’m curious. It’s on net zero, by the way, you you’d get rid of, I just was struck by that in a book you say you’d get rid of net 0 legislation. Would you? I think it was a mistake to put in net 0 legislation without understanding the true cost of it. And I feel it’s been. You were part of that though, weren’t you? Well, in government, you have lots of issues that you want to intervene on and deal with. You can’t fight every battle. And as Prime Minister, you said you would support net zero. Well, what I said is I supported the ambition for 2050. Yeah, but I wanted, but I wanted to get there in a different way. OK. I now having spent some time thought, thinking about it, I think the legislation itself is problematic. So I have, I have changed my view. You’ve changed your mind on that. And I think, and I was a government minister for 10 years and I was very, very engrossed in whatever I was doing in any department, whether it’s dealing with floods at death row or dealing with prison riots. You know, and you, because you’re so intensely involved in the system, you don’t necessarily have that much time to think about all those big picture issues. And that is so now I’ve had time to think about it and really look at what the implications have been for Britain’s economy. Say, for example, we’ve now ended up getting rid of our last virgin producing steel mill. We are spending huge amounts of money on new electricity infrastructure across the country, trillions of pounds. Is that value for money? Is it really what the public wants us to prioritise? I don’t believe so. One of one thing that kind of comes out again, you know, throughout the book is there’s lots of people who are described as kind of woke in various different, different terms. There’s you’ve got the Treasury, you’ve got the media, civil service, Bank of England, CDI institutions like the IMFWTOI mean you even at one point kind of insinuate that the market is left wing as well. I mean, is, is, is there anyone out there who’s, who’s not left wing? I think what we’ve seen over the past few decades is a shift to the left, quite a dramatic shift to the left. I don’t think it sounds like it’s everywhere here. It’s, it is everywhere. Well, it is the, it’s the elite certainly has got more left wing, whether it’s on policies like transgender, whether it’s on areas like climate change and net zero. If you look at what the, the sort of the elite the establishment thought 30 years ago, it’s very different from what it is now. What I’m saying in my book is I don’t think that is a reflection of where the average person in Britain is. So I do feel that that elite and that does include the media, it does include the big corporations, it does include financial institutions, it does include senior levels of the public service. I do feel markets are part of that. Well, that’s I’ve said financial institutions and I’ve, I’ve not described it as a conspiracy. It’s groupthink. It’s about what it what it is acceptable to think and believe in fashionable circles. That’s what I’m talking about. This, this is, you know, it’s a book you’ve been working on for quite some time. But there is there was one quote which find its found its way in there, an anti-Semitic quote attributed to one of the Rothschild family. How did that get in there? And and you know, what does that say about your research process? Well, I’m very I’m very sorry about that. It was a complete mistake. It was a quote found online and I’ve said very sorry. I’m very sorry to the British Board of Deputies for that. And and are you going to it was a complete and I it will be removed from all future editions of the book and removed from the online edition. Obviously, you know, we’re here in Washington and you’re giving some talks here. You’re doing some media here. A lot of people, I guess, have been wondering, you know, do you these days actually feel more at home politically here than you do back in the UK? Well, I do like aspects of American politics. I believe that on economics, the US has got it more right than the UK has on things like fracking, on supply side reform, well, particularly what Trump did on deregulation and tax cuts I think is the right approach. And the American economy is now significantly ahead of the British economy in terms of the average income of people. And I want people. I want, yeah, I want people in Britain to be better off. So yes, I am here in America talking about what we can learn about how to make our economy more successful. But, you know, my heart’s in Britain. You know, that’s, that’s the country I care about. But I think you’ve got to be prepared to learn from other countries that have that success. Do who do you want to win the the election this year in the US? Donald Trump and do you think that he won the 2020 election? No, I think Joe Biden won it. And, and, and I regret that and you regret that Joe Biden won it. But what’s, I mean, for a lot of Trump supporters actually, that was that was a stolen election. Do you do you think that as well? No, I’ve just said I believe Joe Biden won it. But what does that, how does that make you feel? Kind of there’s, there’s the policy side, but then there’s the other side of politics here. And that’s includes lots of talk about things like stolen elections. Do you feel uncomfortable about taking taking that alongside the other side? You know, I’ve just said, you know what my view is. No, I’m very clear with every broadly, though, I’m very clear with every Republican I talk to. That is my view. I don’t I don’t resign from that at all. But what I know is with President Biden in the White House, we have not seen American strength projected. And what we have seen is appalling wars taking place in Ukraine, but also the attacks on Israel, the Sabre rattling on China. I believe that Bidenomics is damaging to the American economy and debt is now at huge levels in the United States. And I believe we need a Republican back in the White House. Final thing, back to the UK. Obviously it’s AUK election year as well. Who do you want to win that election? I want Conservatives to win, OK, Rishi Sunak. I want Rishi Sunak to win. And does it concern you that the Labour Party, I guess, talk about you so much? You know, they feel that every time they mention Liz Trust that there’s a kind of premium that goes on there, kind of polling, that they see their polling improve. Does that, How do you feel about that when you see that happening Quite a lot? What I feel is there has been a narrative promoted in Britain about what happened in the autumn of 2022 that simply isn’t true. And the Labour Party have ridden off the back of that narrative. And what I am seeking to do in my book is be truthful about what happened. And what I think we need in British politics is more debate about why we have the problems we have. You know, why is it that the economy has stagnated? Why is it that public services are struggling to deliver? You know, why is it that we have so many people who are, you know, not working? You know, these are the things that we need to address. And I think personal attacks on me are from people who don’t want to talk about the fundamental failings, what is essentially A Blairite consensus, you know, high spending, high taxes, close alignment with the EU, Keynesian economics, cheap money. It has not worked. And those people who indulge in personal attacks on me are people who don’t want to face the truth about the problems in our country. Final question. It’s this is obviously it’s been a very gruelling, it was a tough time when you were in office. Do you feel, do you feel kind of the load is lighter now or do you still feel bruised and upset about what you’ve been through? Obviously the load is lighter in that I don’t have, you know, it’s a tough job being Prime Minister, It’s a tough job being a cabinet minister. I think what I feel is a sense of frustration. One of the things that’s different about the US political debate is I think there is more talk about the issues and less focus on personal attacks and the sort of personality politics. So that’s what frustrates me is that, you know, I, I went into politics to change things. I tried to change things in #10 I was thwarted in doing that. I want to have a serious debate about Britain’s problems. And yet so much of the media coverage, so much of the political debate is frankly quite puerile. So it’s, it’s frustrating rather than anything else. OK, let’s trust. Thank you so much. Thank you.