Grant Shapps Says Liz Truss’s Economic Approach ‘Clearly Wasn’t Right’

Business secretary Grant Shapps has said Liz Truss’s approach to tackling low economic growth “clearly wasn’t” the right one.

Shapps said that while he agreed with the former prime minister that the UK should have a lower-tax economy, that could not happen without “laying out the groundwork” first by tackling inflation and controlling debt.

The Cabinet minister, who served as Truss’s home secretary for just six days, was speaking in response to a 4,000-word article penned by Truss in the Daily Telegraph.

In the article, Truss claimed she was not given a “realistic chance” to enact her policies to cut taxes and boost growth, which she argued were essentially right.

Truss’s time in office ended following the market turmoil caused by her chancellor Kwasi Kwarteng’s mini-budget, which unveiled £45 billion-worth of unfunded tax cuts.

It caused the value of the pound to plunge, interest rates to soar and led to the Bank of England having to bail out the UK’s pensions industry.

She said that while she was not “blameless” about the market turmoil that ensued, she was nevertheless held back by a “very powerful economic establishment” and a “lack of political support”.

She also took aim at her own party, saying she had “underestimated the resistance… to move to a lower-tax, less-regulated economy”.

Her intervention — her first since standing down in October — has reignited a debate in the Conservative Party about how it grapples with high taxes and slugglish economic growth.

Asked whether Truss’s approach to the economy was right, Shapps said: “Clearly it wasn’t.”

Shapps also defended Rishi Sunak’s cautious approach to the economy in the wake of Truss’s criticism,  telling the BBC’s Sunday With Laura Kuenssberg programme: “No-one wants to pay higher levels of taxes but I think you have to set this in an international context.

“Every Western government has been hit by Putin’s illegal invasion of Ukraine and experienced through-the-roof energy costs, and has then experienced high levels of inflation.

“People might mistakenly think this is something happening in Britain and Britain alone. In fact if you look at the international comparisons, it is happening around the world. Every government is struggling with this.”

Truss has kept a low profile ever since she was ousted from the top job after just 49 days in office —until now.

Her intervention has reignited a debate in the Conservative Party over how it tackles low economic growth.

The problem was laid bare in a recent forecast from the International Monetary Fund, which said the UK economy will perform worse than every other major country in 2023 — including sanctions-hit Russia.

In its latest World Economic Outlook update, the IMF predicted the UK economy will shrink by 0.6% in 2023, compared to its October prediction that it would grow by 0.3%.

By contrast, every other country in the G7 group of advanced nations will see their economy grow — with America’s set to expand by 1.4%.

Russia’s economy will grow by 0.3% over the next 12 months, the IMF said.