Too many coffees? Downing Street aides claim Liz Truss was ‘overcaffeinated’ before disastrous budget
Liz Truss was “over-caffeinated” as she rushed into catastrophic financial reforms during her disastrous weeks in Downing Street, according to aides.
They describe the then-prime minister, who was in charge for 44 days, as being fuelled by her favourite double espressos, before she and her chancellor, Kwasi Kwarteng, unleashed mayhem in the financial markets.
Downing Street insiders described Truss as being obsessed about getting things done quickly and concerned that, with only two years in office until the next General Election, she might run out of time. Speaking to the Financial Times, one cabinet minister said: “She was in this mode where everything had to be done immediately. I was worried she was going to blow up. She kept on saying that she only had two years to do things.”
Meanwhile, Kwarteng admitted he “got carried away” during his brief stint as chancellor. Reflecting on Truss’s disastrous seven weeks as prime minister, Kwarteng, sacked after he implemented her tax-cutting agenda, said they “blew it”.
Truss planned to scrap the cap on bankers bonuses and the 45% top tax rate on earnings above £150,000. But because she stopped commissioning opinion polls – she said she was fed up with politicians agonising about “the optics” – her team had no idea how unpopular such measures might be.
Advisers who warned about creating the perception of a “budget for the rich” were ignored. Kwarteng said: “People got carried away, myself included. My biggest regret is we weren’t tactically astute and we were too impatient. There was a brief moment and the people in charge, myself included, blew it.”
With the Treasury increasingly sidelined, Truss and Kwarteng worked on their planned budget with just a small team, eventually arriving at a debt-funded tax-cutting budget costing £45 billion.
Truss refused to have the Office for Budget Responsibility produce any forecasts about her budget. One cabinet minister said: “There were no forecasts, no spending measures, no scoring. It was kind of nuts. She felt invincible, almost regal.”
The mini-budget triggered turbulence in the financial markets, sending the pound tumbling, forcing the Bank of England’s intervention and pushing up mortgage rates.
Two days later, Kwarteng signalled more tax cuts were on the way, spooking markets further.
While Kwarteng attended an IMF meeting in Washington in October, Treasury officials set about convincing Truss to ditch her plan. One former Truss ally said Cabinet Secretary Simon Case finally convinced her, adding: “He said if you don’t reverse some of these measures there will be an economic catastrophe.”
Kwarteng criticised Truss’s “mad” decision to sack him as chancellor for implementing her plans. His latest comments came after Truss’s former chief speech writer said she took a “Spinal Tap approach” to government, demanding the volume was “turned up to 11”. Asa Bennett said Truss had been determined to put “rocket boosters” under the economy and that it was a matter of “bitter regret” that her efforts had failed.
Friends of Truss have said she was “very low” after her resignation, but has now bounced back. She is said to have told allies: “I lost a battle, but I haven’t lost the war.”