Liz Truss

Liz Truss: Forty-Nine Days and a Broken Market

On the morning of 26 September 2022 the pound touched $1.0327, its lowest against the dollar since 1985. Within forty-eight hours 935 mortgage products had been pulled from the British market and the Bank of England was assembling an emergency gilt-buying programme to stop the country's pension funds from collapsing into each other. The Prime Minister had been in office for twenty days. She would last twenty-nine more.

Leeds, Oxford and the Liberal Democrats

Elizabeth Mary Truss was born in Oxford on 26 July 1975 into a household on the political left: a mathematics professor father and a mother in the Campaign for Nuclear Disarmament who took her daughter on marches. She was schooled in Paisley and then at Roundhay, a comprehensive in Leeds, before reading philosophy, politics and economics at Merton College, Oxford. She joined the Liberal Democrats at seventeen and became president of the Oxford university party. In 1994, aged nineteen, she addressed the Liberal Democrat conference in Brighton and argued for abolishing the monarchy. Almost every element of that biography would later be held against her, or by her, depending on the audience.

The Long Climb

She left politics for business, working as a commercial manager at Shell and economics director at Cable and Wireless, before becoming a director of the free-market think tank Reform. She contested South West Norfolk twice without success and won it in 2010. Her father declined to campaign for her.

What followed was one of the more relentless ascents in modern British politics. She founded the Free Enterprise Group of Conservative MPs in 2011, became an education minister in 2012, Environment Secretary in 2014, Lord Chancellor and Justice Secretary in 2016, Chief Secretary to the Treasury in 2017, International Trade Secretary in 2019 and Foreign Secretary in September 2021. Six posts in nine years is not luck. She had voted Remain in 2016 and subsequently announced she had changed her mind, a conversion that made her acceptable to the party membership at exactly the moment it mattered.

Britannia Unchained

The intellectual project was set out early. In 2012 she co-wrote *Britannia Unchained* with Kwasi Kwarteng and three other new MPs, a short book arguing that Britain had grown flabby and over-regulated and containing the line that would follow all of its authors for a decade: "The British are among the worst idlers in the world." The thesis was that growth had been strangled by tax and timidity, and that a government willing to cut both would release it. Ten years later, two of the book's authors held the two most powerful economic offices in the country and set out to test the proposition.

The Summer of 2022

When Boris Johnson fell, Truss ran on precisely the platform she had spent a decade writing: reverse the national insurance rise, cancel the planned increase in corporation tax to 25 percent, cut the basic rate of income tax, cap energy prices, impose no windfall tax on energy companies. Conservative MPs preferred Rishi Sunak; the membership did not. Truss took 57.4 percent to Sunak's 42.6 and entered Downing Street on 6 September 2022.

The Twenty-Third of September

Seventeen days later Kwarteng delivered what was billed as a fiscal event rather than a budget, and therefore carried no independent forecast. It abolished the 45 percent top rate of income tax, cut the basic rate to 19 percent, cancelled the corporation tax rise, reversed the national insurance increase and removed the cap on bankers' bonuses: roughly £45 billion of unfunded tax cuts.

The gilt market's response was among the most violent on record. Thirty-year yields rose by around 120 basis points in three days. That, in turn, detonated a hazard almost nobody outside the industry had considered: pension schemes running liability-driven investment strategies, holding some £1.6 trillion in LDI assets, equivalent to about two-thirds of British GDP, faced collateral calls they could only meet by selling gilts, which pushed yields higher, which produced more collateral calls. The Bank of England announced a £65 billion emergency facility and bought £19.26 billion of long-dated gilts between 28 September and 14 October, insisting throughout that this was financial-stability firefighting and not monetary policy.

Forty-Nine Days

The retreat was as fast as the advance. On 3 October the abolition of the 45p rate was abandoned. On 14 October Kwarteng was sacked. On 17 October his replacement Jeremy Hunt reversed virtually the entire package in what one account calls the biggest U-turn in British economic history. Truss's net approval rating reached minus 59, the worst recorded for a British prime minister. She resigned on 20 October 2022, forty-nine days after taking office, the shortest premiership in British history.

Why Liz Is Called a Genius

The label does not fit, and pretending otherwise would be an insult to the reader. Truss's central act in office was an economic judgement that markets repudiated within seventy-two hours, that her own party reversed within a month, and that required the central bank to intervene to prevent a pension-sector cascade. There is no serious body of opinion holding that she was intellectually vindicated. In July 2024 she lost South West Norfolk to Labour's Terry Jermy by 630 votes, a defeat few former prime ministers have suffered.

What she genuinely possessed is worth naming honestly, because it is rarer than it looks. Truss had extraordinary ideological persistence and an unusual tolerance for being disliked. She contested a seat twice before winning it, held six senior posts in nine years under three prime ministers, and built an intellectual apparatus for her politics ten years before she needed it, so that when the leadership fell open in 2022 she was the only candidate with a complete, pre-written programme. Beating Rishi Sunak, a far more conventionally impressive politician, by fifteen points among the membership was a real feat of political positioning.

The failure was not one of intelligence but of judgement about constraint. She understood what she wanted; she did not accept that bond markets, an independent central bank and an unbriefed fiscal watchdog were facts rather than obstacles. Conviction unaccompanied by a theory of institutions is not genius. It is closer to its opposite, and the cost of the experiment was borne by mortgage holders rather than by its author.

Legacy

Truss's premiership is now a reference point rather than a record: a case study taught in central banks about how quickly a sovereign can lose the confidence of its creditors, and a permanent argument inside British conservatism about whether the project failed or was merely sabotaged. She has continued to prosecute the second view, publishing the memoir *Ten Years to Save the West* in April 2024 and co-founding the Popular Conservatism movement with Jacob Rees-Mogg. The forty-nine days remain the most consequential short premiership in British history, for reasons no prime minister would want.

Achievements

• Secretary of State for Environment, Food and Rural Affairs (2014–2016)
• Secretary of State for Justice (2016–2017)
• Lord Chancellor (2016–2017)
• member of the 57th Parliament of the United Kingdom (2017–2019)
• Educated at Roundhay School and Merton College