Liz Truss legal threat to Starmer over claim she crashed economy

Former Prime Minister Liz Truss has sent a legal “cease and desist” letter to Sir Keir Starmer demanding he stop saying she “crashed the economy”.

Her lawyers argue the claim made repeatedly by Sir Keir is “false and defamatory” and harmed her politically in the run-up to losing her South West Norfolk seat in the general election.

Truss was the UK’s shortest-serving PM, forced to resign after just 49 days in office when borrowing costs soared in the aftermath of her government’s mini-budget.

Downing Street has been approached for comment.

But Commons leader Lucy Powell told MPs “we won’t cease and desist from telling the truth that they [the Conservatives] crashed the economy”.

Also speaking in the Commons, Chief Secretary to the Treasury Darren Jones said the actions taken by the Conservatives in government were “not just reckless and negligent – they had a direct impact on family finances”.

Meanwhile, the pound has dropped to its lowest level in over a year and government borrowing costs have continued to rise as concerns about the public finances mount.

Sterling began to fall in value after UK 10-year borrowing costs rose again, surging to their highest level for 16 years.

Economists have warned these rising costs could force further tax rises or cuts in spending as the government tries to meet its self-imposed borrowing targets.

Powell said the cost of government debt often fluctuated “because of global markets”, but argued the Truss government’s mini-budget, in September 2022, which included wide-ranging tax cuts, had led to a market reaction “directly and immediately”.

A “cease and desist” letter usually represents a warning that the recipient will face legal action if they continue the allegedly unlawful activity.

In the letter sent to Sir Keir on Wednesday, Truss’s lawyers say his statements about their client are “false and misleading”.

“Their publication is not only extremely damaging but also grossly defamatory and indefensible… It would be hard to avoid a conclusion that they were made maliciously,” the letter adds.

Truss’s lawyers say they are seeking “an amicable basis on which you will agree to cease repetition of what is clearly a factually incorrect and defamatory statement about our client.

“This request is made in the context of the basic levels of civility which is due between senior politicians, and we trust that you will respond accordingly.”

The letter argues that the movements in financial markets during Truss’s tenure in No 10 should not be classified as an economic crash.

The weeks following the mini-budget saw adverse market reaction and mortgage costs soar.

At the Conservative Party conference in October, Truss said it would be “economic illiteracy” to suggest that tax rises from Labour – at that point anticipated in Rachel Reeves’ upcoming first Budget – were a result of her economic inheritance.