How the Establishment Framed Liz Truss — and Got Away With It

The Lack of Accountability from the Bank of England

Liz Truss didn’t crash the economy. The people who said she did are the ones actually doing it.

It has become political scripture. Liz Truss crashed the economy. Her reckless mini-budget sent the markets into freefall. Pension funds teetered on the brink. The pound collapsed. Britain was hours from financial catastrophe.

Every political speech, every fiscal statement, every economic policy debate in Westminster for the last two years has been conducted in the shadow of that story. “We cannot afford another Truss moment,” they say. The phrase has become the justification for every tax rise, every spending cut, every abandoned promise. It is the shield behind which both Conservative and Labour governments have hidden their lack of ambition, their lack of nerve, and their lack of any coherent plan for growth.

There is only one problem with the story.

It is a lie.

Not a mistaken interpretation. Not a difference of political perspective. A lie. Constructed, amplified, and now endlessly repeated by the very people whose policies have delivered the stagnation, the decline, and the economic chaos they claimed to prevent.

Let us remind ourselves of what actually happened.

What The Truss/Kwasi Mini-Budget Actually Was

On September 23, 2022, Chancellor Kwasi Kwarteng announced a fiscal package that included tax cuts and supply-side reforms aimed at stimulating growth. Corporation tax would remain at 19 per cent rather than rising to 25 per cent. The top rate of income tax would be abolished. Stamp duty would be cut. Planning restrictions would be eased. The energy price guarantee would be funded through borrowing rather than a windfall tax.

The measures were announced. They were not enacted. No legislation had been passed. No money had been spent. No tax rates had changed. Markets were reacting not to policy that had been implemented, but to policy that had been proposed.

This distinction matters. Because what followed was not the inevitable consequence of reckless governance. It was a coordinated market panic — and the institutions responsible for economic stability made a deliberate choice not to prevent it.

The Bank of England’s Role — And Its Silence

In late September 2022, the Bank of England was engaged in quantitative tightening. That is the polite term for selling government bonds — gilts — back into the market. It was doing so as part of a programme to unwind over a decade of quantitative easing, the money-printing exercise that had inflated asset prices and left Britain’s financial system dependent on artificially cheap credit.

The market for gilts was already fragile. Inflation was running at over 10 per cent. Interest rates had been raised repeatedly. Energy costs were soaring. Pension funds — which had spent years relying on stable gilt yields to meet their obligations — were stretched.

Then came the mini-budget. Gilt yields spiked. Prices fell. Pension funds, which had used gilts as collateral in complex derivatives strategies, suddenly faced margin calls they could not meet. The system was on the edge of a liquidity crisis.

The Bank of England could have paused its gilt sales. It could have announced that, given market volatility, it would delay further quantitative tightening until conditions stabilized. Central banks do this. It is not unusual. It is not a bailout. It is the exercise of judgment in volatile conditions.

Instead, the Bank pressed on. It continued selling gilts into a collapsing market. Only when pension funds were hours from default did it reverse course, announcing an emergency programme to buy the very bonds it had just finished dumping.

The intervention worked. Markets stabilized. And the story that emerged was not that the Bank had mismanaged quantitative tightening or failed to coordinate with the Treasury. The story was that Liz Truss had caused a crisis and the Bank had heroically stepped in to clean up her mess.

Andrew Bailey, the Governor of the Bank of England, gave no explanation for why gilt sales had continued during the most volatile period. No Treasury Select Committee hearing demanded one. No journalist asked him directly whether the Bank’s own actions had deepened the panic.

Instead, the entire political and media class united around a single narrative: Truss was reckless, the markets had spoken, and Britain had been saved from disaster by the swift action of its institutions.

Why the Truss Plan Was Right

The irony — the bitter, consequential irony — is that Truss’s instincts were sound.

Britain has not had meaningful economic growth in over a decade. Productivity has stagnated. Wages have flatlined. The tax burden is the highest it has been since the Second World War. Business investment has collapsed. The country has been surviving on borrowing, on printing money, and on the fiction that it can tax and regulate its way to prosperity.

It cannot.

Every developed economy that has achieved sustained growth in the modern era has done so by making itself an attractive place to invest, to work, and to take risks. Lower taxes. Simpler regulation. Stable institutions. A government that does not punish success or treat enterprise as something to be managed and controlled.

That was what the Truss plan aimed to restore. Not libertarian fantasy. Not trickle-down economics. A return to the fundamentals of a market economy: that growth comes from productivity, not redistribution, and that the role of government is to remove barriers, not to micromanage outcomes.

The communication was poor. The timing was difficult. But the diagnosis was accurate, and the prescriptions were defensible. Lower corporation tax to attract investment. Abolish the top rate of income tax to retain talent. Cut stamp duty to improve labor mobility. Ease planning restrictions to build the homes and infrastructure Britain desperately needs.

These were not radical policies. They were the policies that Britain’s competitors — from Ireland to Singapore to Switzerland — have used to leave us behind.

The reaction from the economic establishment was not that the policies were wrong. It was that they were too ambitious, too fast, and introduced without the permission of the institutions that have spent fifteen years managing Britain’s decline.

That permission was never going to be granted. Because what Truss threatened was not chaos. It was change.

The Gaslighting Begins

Within days, Liz Truss was gone. Kwasi Kwarteng was sacked. Jeremy Hunt was installed as Chancellor with a single mandate: reverse everything. The tax cuts were cancelled. The growth agenda was abandoned. The energy price guarantee was scaled back. Britain returned to the path it has been on since 2008 — high taxes, low growth, and the pretence that fiscal responsibility means doing nothing.

And then came the gaslighting.

Every Conservative who had supported Truss in the leadership election lined up to denounce her. Rishi Sunak built his premiership on the promise that he would restore stability after the chaos she had caused. Tory MPs, asked to defend tax rises or abandoned manifesto commitments, pointed to the mini-budget as the reason they had no choice.

The story became accepted fact. Liz Truss crashed the economy. It was taught to students, repeated in editorials, and cited by economists who should have known better.

But the story did not end with the Conservatives. Labour inherited it — and has used it with even greater enthusiasm.

Just last week, Foreign Secretary David Lammy stood in the House of Commons and invoked the “Truss crash” as if it were established history. No qualification. No context. Just the assertion, delivered with confidence, that markets had rejected her plan and Britain had barely survived.

Chancellor Rachel Reeves has built her entire fiscal strategy on the same myth. Her budget in March 2025 raised taxes, increased borrowing, and delivered virtually no growth. When challenged, she pointed to the need for “fiscal discipline” and the lessons learned from the Truss debacle.

The irony is almost too sharp to bear. Under Reeves, borrowing costs have risen higher than they were during the mini-budget crisis. Growth has stalled. Business investment has fallen further. The pound has weakened. And yet, because she is raising taxes rather than cutting them, because she is delivering decline slowly rather than promising growth boldly, she is treated as the embodiment of responsibility.

The Bank of England’s Unaccountable Power

None of this would have been possible without the unique role of the Bank of England.

In 1997, Gordon Brown granted the Bank operational independence — the power to set interest rates and conduct monetary policy without direct government oversight. It was sold as a safeguard against political interference. What it became was a shield against democratic accountability.

The Bank now operates as a state within the state. Its officials are unelected. Its decisions affect millions. And when it makes mistakes — when it misjudges inflation, when it crashes pension funds, when it sells gilts into a collapsing market — there is no reckoning.

Andrew Bailey is still Governor. The Monetary Policy Committee still meets. The same officials who presided over the 2022 crisis still set policy. And Parliament, which scrutinizes every line of the government’s budget, has no power to overrule or remove them.

This is not central bank independence. This is central bank impunity.

And the result is predictable. The Bank makes decisions that suit its own institutional interests — preserving the status quo, avoiding political controversy, protecting the financial establishment — rather than decisions that might actually deliver growth, employment, or prosperity for the country it is supposed to serve.

What This Tells Us About Britain

The treatment of Liz truss was not an accident. It was not a spontaneous reaction to bad policy. It was the system defending itself.

The permanent institutions of the British state — the Bank of England, the Treasury, the civil service, the financial sector — have spent fifteen years managing Britain’s decline. They have presided over stagnant wages, collapsing productivity, and the highest tax burden in modern history. They have delivered failure after failure, crisis after crisis, and yet they remain in place, insulated from consequence, certain of their own righteousness.

When someone threatens that arrangement — when someone proposes policies that might shift power, might reward risk, might prioritize growth over stability — the system closes ranks. Markets are allowed to panic. The media amplifies the panic. And the politician responsible is removed, not because the policies were wrong, but because they challenged the consensus.

Liz Truss lasted 49 days. The people who actually crashed the economy — who printed money for a decade, who kept interest rates at zero while inflation soared, who sold gilts into a collapsing market and then blamed the chaos on someone else — are still running it.

The Reckoning That Hasn’t Come

Two years have passed since the mini-budget. In that time, Britain has continued its decline.

Under Rishi Sunak, growth was anaemic. Taxes rose to the highest level since the war. Immigration reached record levels despite promises to control it. The Conservatives, who had spent 14 years in government, lost the 2024 election in a landslide.

Labour, under Keir Starmer and Rachel Reeves, promised renewal. What they have delivered is more of the same. Higher taxes. More borrowing. More regulation. And growth that is barely distinguishable from recession.

Reeves’s first budget raised employer National Insurance contributions, increased capital gains tax, and loaded businesses with new costs through employment law changes. The result? Business confidence collapsed. Investment fell. And the same economists who praised her fiscal discipline admitted, quietly, that growth forecasts would need to be revised down.

But there is no crisis. No panic. No emergency intervention from the Bank of England. Because this decline is managed. It is predictable. It is the kind of failure the establishment knows how to live with.

Liz Truss promised growth. She threatened to disrupt the cozy arrangement that has governed Britain for a generation. And so she was destroyed — not by the markets, but by the very people who have spent fifteen years proving they have no idea how to run an economy.

The Truth Is Simple

Liz Truss did not crash the economy. Her policies were never implemented. The mini-budget never became law. The tax cuts never took effect.

What crashed was not the economy. It was the illusion that Britain’s institutions were competent, neutral, and acting in the public interest.

The Bank of England mismanaged quantitative tightening. The Treasury failed to coordinate with monetary policy. The media amplified panic without scrutinizing the institutions responsible for stability. And the political class — Conservative and Labour alike — used the crisis to justify a return to the very policies that have delivered stagnation, decline, and the highest tax burden in living memory.

The real crash is happening now. Slowly. Quietly. Under a Labour government that promised change and has delivered nothing but continuity. Under a Chancellor who invokes fiscal discipline while presiding over falling growth and rising debt. Under a Bank of England that remains unaccountable, unelected, and utterly insulated from the consequences of its own failures.

Liz Truss didn’t destroy Britain’s economy. The people still running it did. And they are doing it still.