Liz Truss: Former prime minister sends legal letter to Keir Starmer over claim she crashed the economy

Lawyers representing Ms Truss argue the claim, repeatedly made by Sir Keir, is "false and defamatory" and has caused her political harm, particularly in the lead-up to her losing her South West Norfolk seat in the 2024 general election.

The legal letter, sent by Asserson law firm, accuses Sir Keir of making "false and defamatory public statements" about Ms Truss, specifically referencing comments made in June 2024. The lawyers have asked the Prime Minister to "immediately cease and desist" from repeating claims that Truss's policies caused economic turmoil.

Ms Truss, the UK's shortest-serving prime minister, resigned after just 49 days in office following her government's controversial mini-budget. The budget caused borrowing costs to soar, leading to what many described as a financial crisis.

Labour's Leader of the House of Commons, Lucy Powell, defended her party's stance, saying Labour would not back down from addressing the economic turmoil caused during Truss's leadership. Speaking in the Commons, she said: "She might want us to cease and desist, but we won’t cease and desist from telling the truth that they (the Conservatives) crashed the economy.”

Ms Powell referred to the mini-budget as a "kamikaze budget," claiming it directly led to a crash in the gilt market and forced intervention by the Bank of England.

M Powell reiterated Labour’s commitment to "economic stability, sound public finances, and meeting fiscal rules" while contrasting it with the "chaos" under Truss’s government. She emphasised Labour's focus on borrowing only for investment and ensuring net debt falls.

“The early chaos under the Conservatives, especially during Truss's tenure, continues to resonate. Their economic policies left lasting damage, and Labour is determined to hold them accountable,” she said.

Conservative shadow Commons leader Jesse Norman criticised Labour’s governance, suggesting the government should adopt “new year’s resolutions” to manage its policies better. He highlighted concerns over rising yields on government bonds, signaling investor unease. Norman also called for an end to “politically driven measures that actively hurt the economy.”