Who’s with me, cries Truss ... but the revolutionaries aren’t rushing forward

‘The OBR and its position is taken very seriously by the market’

‘Truss rejects the idea that ‘there’s only one person at the Treasury who knows what’s going on’

On the wall of Liz Truss’s new office is a portrait of Che Guevara dressed in Horatio Nelson’s uniform: an imaginary British revolutionary. It’s there to inspire her in her next political project – running another assault against the establishment. The first time, as prime minister, she tried radicalism without the arguments. It didn’t go well. Now, she wants to try it the other way around.

She wanted to explain to me last week what she sees as a paradox: how has something that sounds technical, almost too boring to discuss, has become so powerful to decide the direction of British politics? The economic models used by the Office of Budget Responsibility, she says, have a dim view of the efficacy of tax cuts. “The OBR and its position is taken very seriously by the market,” she says. “So it effectively constrains what the government can do.”

It’s a myth, she says, that she failed because she tried deficit-financed tax cuts. Her energy bill bailout “was 60 per cent of the [cost of the] minibudget” so the bulk of Trussonomics ended up being a £60 billion borrow-and-spend splurge. Most of the tax cuts were, she says, a decision not to raise corporation tax – which the Office for Budget Responsibility said would end up costing £20 billion. Truss flatly disagrees.

The biggest factor in Truss’s downfall, she believes, was the LDI (liability-driven investments) crisis in pension funds, which was a massive problem that few saw coming. Truss says she had no idea, in No10, that funds owned assets worth 60 per cent of GDP, and were liable to topple over if interest rates rose too quickly – as they were doing, world over, even before the mini-budget. The LDIS were a “tinderbox”, she says. She believes, now, that she was by then walking into an explosion with her mini-budget – and no one warned her.

The day before her mini-budget, market expectations for UK interest rates had surged in a way that spelled danger for LDIS. Should she have been warned? “This is really a matter for the Chancellor rather than the Prime Minister,” she said. “But my understanding was that he wasn’t informed of this either.” Had she known how delicate things were with the LDIS, she told me, she’d have delayed the mini-budget. We asked her why, if she wanted expert advice, she had fired the person most likely to give it: Tom Scholar, permanent secretary of the Treasury. She said she rejects the idea that “there’s only one person at the Treasury who knows what’s going on”.

But is she the best person, now, to champion the low-tax agenda, given the disaster of her premiership? “Nobody would be more delighted than me … if there were lots of other people coming forward and making these arguments.” But there aren’t, she says.