Former Britain's Prime Minister Liz Truss Liz Truss has weighed in on Rachel Reeves’ spending plans to fix what the chancellor describes as a ”£22bn black hole” in public finances.
The ex-prime minister, who was pushed out of government after she unveiled a chaotic mini-Budget full of £45bn of unfunded tax cuts, was not happy with Reeves’ first Commons speech as chancellor.
While releasing an audit of spending on Monday, Reeves announced the independent forecasters of the OBR (Office for Budget Responsibility) would no longer have to accept government numbers before making their predictions.
She wants the forecasters to be able to question the government over the spending promises they offer up.
It’s a stark contrast to Truss’s decision to bypass the OBR’s forecasts before unveiling her mini-Budget two years ago which sent the markets into turmoil, spooked the financial markets and sent mortgage rates soaring.
So perhaps it’s no surprise that the former PM did not exactly support Reeves’ plan.
On Tuesday, Truss wrote on X: “Labour’s Bill today hands more power to bureaucrats just when the Bank of England admits the 2022 market crisis was ITS fault.
“It accepts TWO THIRDs of the gilt yields spike was due to LDI [Liability Driven Investment] related trading following its oversight failure.
“Rather than giving more power to unelected bureaucrats, the Chancellor ought to be ordering an urgent investigation into what her former colleagues at the Bank of England were up to prior to the 2022 LDI market crisis and holding them to account.”
Labour's Bill today hands more power to bureaucrats just when the Bank of England admits the 2022 market crisis was ITS fault.
— Liz Truss (@trussliz) July 30, 2024
It accepts TWO THIRDs of the gilt yields spike was due to LDI-related trading following its oversight failure.????https://t.co/HFXGd8EBu8
Truss has repeatedly refused to apologise for the chaos her financial plans caused.
Most of Truss’s mini-Budget had to be reversed by the next chancellor, Jeremy Hunt, in an effort to soothe the markets.
Reeves, who used to work in the Bank of England herself, alluded to Truss’s past when she first hinted at her plans earlier this month.
She said: “Never again can a government play fast and loose with the public finances. This new law is part of our plan to fix the foundation of our economy so we can rebuild Britain.”
