Good morning. Will here. “There is no time for finger-pointing,” Liz Truss declares in the introduction to her score-settling autobiographical blame-fest, Ten Years To Save My Career, before rolling up her sleeves and using both hands to aim her furious digits at everyone who has failed her, for 320 pages.
Truss’s book is packed with disturbing revelations about the Deep State. The “legal establishment” sought to humiliate her through the brutal tactic of “not clapping loudly enough” when she entered the room. Civil servants forced her to book her own hair appointments and to send her diary secretary out for cough medicine. A round of media interviews was arranged at the top of the Empire State Building despite her being “not that great with heights”. Teachers (Deep Staters, every one of them) warped young minds by “teaching that there are multiple genders”, in clear defiance of the one true gender that all normal people believe in.
Worst of all were the officials of the Treasury and the Bank of England, who are “global left in outlook and pro-China”. After the mini-Budget of September 2022, Truss’s plan for economic growth was stifled by “a sustained whispering campaign by the economic establishment”, which nearly crashed the UK economy and then ousted her from Downing Street.
Much as I enjoy the image of Andrew Bailey creeping through the night to mutter into the ears of Canadian asset managers, “Don’t buy any gilts tomorrow, I’m doing a Marxist coup”, I don’t think that really happened. But I do think it is reasonable for Truss to complain about the power that monetary policy has assumed over politics.
Truss spends a good chunk of Ten Years to Rebuild My Credibility proudly explaining how mean she was to officials as a minister. What she doesn’t seem to realise is that this made her life a lot more difficult. Obviously, there would have been people in Downing Street capable of booking a hair appointment or checking if you don’t like heights. However, they’re not going to offer to do that if you’re rude to them all the time.
I also imagine there were people who could have talked Truss and Kwarteng through the likely market implications of taking government borrowing to £190bn in a single year (money raised by selling UK government bonds, known as gilts), two days after the Bank of England had voted to sell off £80bn of its gilts in the same year. At the beginning of August 2022, the yield (borrowing cost) on a ten-year gilt was 1.8 per cent; by the time Kwarteng began his fateful “mini-Budget” speech it was 3.3 per cent. A good adviser might have suggested having a chat with the Bank about that.
Similarly, no one warned Truss that when the yields spiked after Kwarteng’s speech, the liability-driven investment (LDI) strategies used by pension funds might start to incur margin calls for hundreds of millions of pounds. “I was astonished to discover no one in the Treasury or the Bank of England had flagged it as a problem,” she writes, before admitting: “I hadn’t heard of LDIs… We struggled both to understand and to explain what was happening.” Truss continues to struggle with this issue, and blames Bank officials for not having regulated these products. (The Bank had stress-tested LDI funds in 2018, and measured how they scrambled for liquidity in 2020.)
What Truss gets right in Ten Years to Monetise My Contrarian Persona is that the reason pension funds started playing with leveraged derivatives in the first place was that the monetary policy of the previous decade – the quantitative easing (QE) era – had made it hard for them to meet their liabilities using only the very safe investments that made up most of their assets. The age of cheap money forced them to take on a new kind of risk.
Truss accuses the Bank of creating a “period of cheap money that had anaesthetised the country”, and that seems like a fair accusation to me. What she won’t describe is what the country was being anaesthetised from. This was, of course, the pain of austerity, which inflicted huge damage to the economy by radically reducing the spending of its largest participant, the government. In 2013, George Osborne explicitly stated that “active monetary policy” was now in charge of providing growth. This was the point that power was handed to unelected technocrats, and it was done so that the Conservative Party could have an easier time in government.
QE also caused deep inequality, through asset inflation, and an increasing frustration with the political class that was instrumental in the Brexit vote and the political turmoil that followed. Without it, Liz Truss probably wouldn’t have been given a go at being prime minister. Her successor, Rishi Sunak, openly celebrated the dominance of gilt prices over democracy, jovially thanking “the UK bond markets” for making him PM in a speech a few days after being elected (by just over 100 people in a leadership contest in which he was unopposed).
It is not a conspiracy theory to say that monetary policy has become overmighty and fiscal policy is at the mercy of economic forecasts, or to question the unelected officials who wielded this power, and in some cases continue to do so (Mark Carney, who as the Bank of England’s governor helped to bank-roll Osborne’s vandalism, has a seat on Labour’s economic task force). The phrase “deep state” is deeply silly but it is worth asking why the former prime minister believes in it – and to what extent she is right.
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The Angela Rayner tax row spells real danger for Labour
What is the Angela Rayner story about? “Pure politics” – though there’s no such thing, it’s an oxymoron. It’s about revenge, hypocrisy and condescension. On the facts, the tax expert Dan Neidle has given New Statesman online readers a clear and neutral explanation. He concludes that Labour’s elected deputy leader failed to understand the rules in her initial response about why she had not paid capital gains tax on the sale of a former council house in 2007.
He gives various possible explanations about why she thinks she owes no tax – he estimates any potential liability to be “no more than £3,500” – and gives her what I would describe as a cautious benefit of the doubt.
But what is keeping this story running is that it revolves around her complicated living arrangements, and whether she has been telling the truth. When she was married to Mark Rayner, where was her real home? Was it where she said it was? Her former neighbour Sylvia Hampson has been widely quoted describing her as “an effing liar” on that. A former aide, Matt Finnegan, has in effect made the same accusation.
Already I can feel some readers asking themselves why we would spend a moment on a transparent and hypocritical exercise in Tory deflection ahead of the English council elections. Have Tory shills now wormed their way into the New Statesman?
Here are three responses. The first is that the accusation of evading tax and lying about it is a serious one, which we would pick up against any politician, and have. As Neidle said: “£3,500 is a significant amount of money for many people, and it’s corrosive to public trust in the tax system if there’s a perception that there’s ‘one rule for us and one for them’.” Rayner herself agrees: “I have always said that integrity and accountability are important in politics.”
Those who think she should be given a free pass because she is a northern working-class woman who had a hard start in life and has fought her way up don’t understand the electorate, and are guilty of condescension. Voters are less interested in personal “backstories” (itself a Westminster term) than in what the elected will do for them. They believe rules are for everyone; indeed, that was the essence of the Labour case against Boris Johnson.
The second reason is that this is almost as much about Keir Starmer, who at one point wanted to sack her, as it is about Angela Rayner. Although relations have been difficult between her and Starmer, she cannot complain about the unstinting, steely support she has had from him. Again and again, Starmer has given her “100 per cent backing”; so have Rachel Reeves, Yvette Cooper and many others.
That in itself was a big choice: Starmer has made it clear that, after the Tory years, in his words, “honesty, integrity and telling the truth matter in our politics”. He is a proud and stubborn man, however, who would hate to have to throw a colleague to the wolves of the popular press. The Labour high command, increasingly irritated about how long the story is running, see it as an attempt to deflect voters ahead of the local elections, upon which Rishi Sunak’s future as Prime Minister may depend. Their instinct is: don’t give the bastards an inch. Back Angela all the way.
But until the Greater Manchester Police publicly explain exactly what offences they are investigating, it’s hard for Starmer to say much more. The statute of limitations built in to the 1983 Representation of the People Act makes legal challenges about the electoral roll seem a dead end. Even the Tory MP who raised it with the police, James Daly, seems perplexed.
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