Former British prime minister Liz Truss has sent a “cease and desist” letter to current PM Keir Starmer, demanding he stop saying she “crashed the economy”.
According to her lawyers, the claims against her made since the lead-up to the British general election in July last year were “false and defamatory” and “cause serious harm to her reputation”.
Truss’ lawyers said in the letter, reported by the Telegraph on January 9, that Starmer’s comments might have caused her to fail in her re-election bid as leader in the election.
“Of particular concern are the false and defamatory public statements you made about our client in the lead-up to the UK general election from late May 2024, at a time when you knew or ought to have known that those statements were false and the statements were likely to materially impact public opinion of our client whilst she was standing as the parliamentary candidate for the Conservative Party in South West Norfolk,” the letter read.
Starmer, who was leader of the Labour Party opposition, had repeatedly stated then-Conservative PM Truss had crashed the economy. He highlighted her so-called mini-Budget in September 2022, in which she had proposed tax cuts financed by borrowing.
That proposal had spooked the financial markets.
Truss and her lawyers, though, insisted there was no so-called crash, since economic output did not fall and nor was there a rise in unemployment.
In their letter, they added a report from Andrew Lilico, a fellow of the Institute of Economic Affairs. He has also claimed there was no crash, adding that the economy actually grew faster in the period immediately following the mini-Budget.
“Accordingly, our client requests that you immediately cease and desist from repeating the defamatory statements at any point, from causing them to be repeated or from otherwise re-publishing the defamatory statements or any part of them,” the letter stated, referring to Starmer.
“We sincerely hope that this matter can now be resolved and that you will refrain from causing any further damage to our client.”
The letter seemed to many to have been timed deliberately, with the Starmer-led UK facing increasing economic troubles.
Borrowing costs for the UK Government are rising, giving Downing Street less fiscal room to manoeuvre. At the same time, the British Pound is at a nine-month low.
A January 5 KPMG report said UK inflation was now projected to remain above the Bank of England’s 2 per cent target until 2027. “The economy continues to be constrained by a weak pace of productivity growth and shortfalls in labour force participation,” the report stated.
According to a recent Confederation of British Industry quarterly study, financial services profits are expected to decline in the upcoming months at the quickest rate since the financial crisis in 2008 that caused a deep recession.
A satirical Christmas song mocking UK PM Keir Starmer's policy on cutting winter fuel payments for pensioners has topped the UK download charts despite alleged radio boycotts, including by the BBC. https://t.co/MC5vcY67Rb
— Brussels Signal (@brusselssignal) December 20, 2024
In their letter, the lawyers also criticise the Bank of England, whose policies led to strong movements on the markets.
A working paper by the Bank of England from May 2024 calculated that “two-thirds of the spike in gilt yields in September 2022 was caused by Liquidity After Solvency Hedging (LASH) risk – risk created by pension funds with leveraged Liability Driven Investments, as a result of the Bank of England failing to oversee these funds effectively.”
Truss asked for an investigation into the workings of the Bank of England at the time. Rachel Reeves, current Chancellor of the Exchequer and responsible for all economic and financial matters, worked for the Bank in the past and recently announced £40billion (€47,6 billion) in tax rises.
Important to note that 10-year GILT yields are now higher than they were during the LDI crisis, when the mini-budget was announced.
But unlike Truss' time in office, growth has fallen, to 01.%.
So why aren't the Bank of England, OBR, and press freaking out this time?… pic.twitter.com/ug4eMoylfA
— Connor Tomlinson (@Con_Tomlinson) January 9, 2025
While many parliaments have strong protections regarding freedom of speech, guaranteeing robust political debates, there have been several lawsuits for defamation in the UK.
One notable example was in 2017, when UKIP MEP Jane Collins was sued by three Labour MPs for libel after she claimed they knew about child exploitation in Rotherham but did nothing. The High Court ruled in favour of the MPs, awarding them £162,000 in damages, plus £196,000 in legal costs for Collins.
