Liz Truss legal threat to PM over claim she crashed economy was for ‘publicity,’ says her former Chancellor

10 January 2025, 09:22

Liz Truss’s legal "cease and desist" letter to Sir Keir Starmer demanding he stop saying she "crashed the economy" was done for ‘publicity,’ according to former Chancellor Kwasi Kwarteng.

Mr Kwarteng told Nick Ferrari on LBC this morning that he 'didn't understand' the rationale of sending the letter because it would have no effect whatsoever on the words used in open debate in the Commons.

Mr Kwarteng told Nick: "I don’t understand it. You can pretty much say anything in parliament. There’s no court in the land that’s going to ban people… from free and open debate in the House of Commons.

"If Labour MPs say Kwarteng and Truss crashed the economy, there’s no redress in the courts.

“I’m not sure what the purpose of it would be. You can’t restrain parliamentary debate in that way.

“I suspect it might be for publicity. You’ve got to try and work out what the rationale is.

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“We’re talking about Liz, we’re talking about her agenda so it’s certainly raised her profile in that way."

Asked if his feelings were ‘hurt’ by the claim, Mr Kwarteng said: “I don’t think it’s true.”

“The dangers now are much more significant than what happened in October 2022.”

Sir Keir Starmer has said he will not soften his assertion that she crashed the economy.

Number 10 questioned whether the former premier would also be writing to "millions of people up and down" the country who shared the Prime Minister's view.

Ms Truss's legal team sent Sir Keir a cease and desist letter saying his claim that his predecessor-but-one "crashed the economy" or was "crashing the economy" was defamatory and "false and misleading".

It also suggests that the assertion had been "likely to materially impact public opinion" at the last general election when she lost her Norfolk seat.

Asked on Thursday whether the Prime Minister stands by his assertion, his official spokesman said: "There's only so much I can talk about previous administrations, but you've got the Prime Minister's language which he absolutely stands by in relation to the previous government's record, and you don't have to take it from the Prime Minister.

"I think you can ask people up and down the country what the impact of previous economic management was on their mortgages, on inflation, and I think you'll get similar answers.

"But what we're focused on now is the decisions this Government needs to take to ensure that we tackle the long-standing underlying weaknesses in the UK economy that you know have obviously been around for many years - low productivity, low growth - because ultimately they are the fundamental reasons why wages have been low over recent years and ... the Government's number one mission (is) to deliver growth and deliver higher living standards for working people."

Asked whether Sir Keir had plans to moderate his language, he said: "No."

While in Downing Street, Ms Truss unveiled a radical tax-cutting policy agenda that panicked the markets and saw the pound tank to a 37-year low against the dollar.

Since being ejected from office after just 49 days, the former premier has admitted her plan to cut the 45p top rate of tax may have gone too far but insisted it was not fair to blame subsequent interest rate rises on her mini-budget.

The new letter, sent by her lawyers and first reported by the Telegraph, argues that the market movement during her tenure in September and October 2022 should not be classified as a crash of the economy.

The weeks following Ms Truss's mini-budget saw adverse market reaction and mortgage costs soar.

Referring to the movements in gilts and exchange rates at that time, the letter says: "Such rate movements cannot properly be described as a crash of the economy.

"To use such an expression is to display ignorance of basic economics and common usage of the term 'crash' when referred to an economy."

During a question on public finances in the Commons on Thursday, Liberal Democrat MP Max Wilkinson referred to Ms Truss's cease and desist letter and asked Treasury minister Darren Jones if he "might want to take advantage of parliamentary privilege" to discuss the "impact of her disastrous mini-budget".

Mr Jones replied: "It was a direct connection between the hubris and the ego and the lack of focus on working people that Conservative ministers took when they were in government last time that ruined the lives of people across this country.

"I say that today, I'll say every single day because the British people must never forget the recklessness of the Conservative Party."

At the Conservative Party conference in October, Ms Truss said it would be "economic illiteracy" to suggest that tax rises from Labour - at that point anticipated in Rachel Reeves' upcoming first Budget - were a result of her economic inheritance.