Ex-Chancellor Kwarteng Says He Warned Truss Over Pace of UK Economic Reforms

UK Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng visit Berkeley Modular, in Northfleet, England, on Sept. 23, 2022. Dylan Martinez/WPA Pool/Getty Images

Former Chancellor Kwasi Kwarteng has said he told former Prime Minister Liz Truss to “slow down” her ambitious economic reforms, which caused market turmoil and eventually led to her resignation.

After Truss became prime minister on Sept. 5, she set out to implement her economic vision for the UK to become a “low-tax, high-growth economy that would take advantage of the freedoms of Brexit.”

Her government used the “mini-budget,” delivered by Kwarteng on Sept. 23, to jump-start her new economic programme—nicknamed “Trussonomics”—with massive tax cuts worth £45 billion ($50 billion).

But it went badly wrong, as her plan to fund the tax cuts with government borrowing instead of spending cuts led to fears of unsustainable government debt levels. The ensuing turmoil in the financial markets caused the pound to fall steeply against the dollar and led to an increase in borrowing costs for both the government and British households.

‘Too Quick’

In an interview with TalkTV aired on Nov. 10, Kwarteng said the “strategic goal was right,” but he thought “we should have had a much more measured approach.”

He said he bore “some responsibility” for the timetable of the mini-budget, but that Truss “was very much of the view that we needed to move things fast.”

“But I think it was too quick,” Kwarteng said. “Even after the mini-budget we were going at breakneck speed. And I said, ‘You know, we should slow down, slow down.’”

“She said, ‘Well, I’ve only got two years,’ and I said, ‘You will have two months if you carry on like this.’ And I’m afraid that’s what happened.”

Asked if he wanted to say sorry to the people facing extra costs in re-mortgaging, Kwarteng said he doesn’t want to “relive the past” but he does “feel sorry” for those affected.

He said the strategic goals were “the right thing,” but admitted that there was “no real tactical plan” and “no real timetable” for the delivery and implementation.

Chancellor of the Exchequer Kwasi Kwarteng (L) and Britain's Prime Minister Liz Truss watch a tribute to Queen Elizabeth II on the opening day of the annual Conservative Party conference in Birmingham, England, on Oct. 2, 2022. Leon Neal/Getty Images

‘Emotional’

Following the mini-budget fiasco, Truss sacked Kwarteng and carried out a series of humiliating U-turns.

Kwarteng said he first learned of his firing via a Twitter post as he travelled to a meeting with Truss in Downing Street.

“I can’t remember whether she was actually shedding tears but she was very emotional,” he said.

Describing his thinking at that moment, he said: “This is mad. Prime ministers don’t get rid of chancellors.

“I think I said to her at the time, ‘This is going to last three or four weeks.’ Little did I know it was only going to be six days.”

Kwarteng said, “She can’t fire me for just implementing what she campaigned on.”

But he said Truss thought “somehow she would survive” if her chancellor “took the fall” for the problems.

Truss ended up resigning after only 44 days in office, with her economic measures swiftly ripped up by new Chancellor Jeremy Hunt and her successor in Number 10, Rishi Sunak.

But Kwarteng argued that Sunak and Hunt cannot blame Truss’s government for the black hole in the nation’s finances.

“The only thing that they could possibly blame us for is the interest rates and interest rates have come down and the gilt rates have come down,” he said.

“It wasn’t that the national debt was created by Liz Truss’s 44 days in government.”

PA Media contributed to this report.