Liz Truss insists ‘dysfunctional’ system behind Mandelson vetting blunder also to blame for mini-budget ‘economic crash’

Speaking with Tom Swarbrick at Drive, the former Prime Minister and Conservative MP drew parallels between the system that led to her own downfall as Prime Minister and the one that has ensnared Starmer over Peter Mandelson's appointment.

Hitting out at ‘completely dysfunctional’ civil service procedures led to the vetting blunder, Truss laid blame at the door of Labour, telling LBC that "Sir Keir Starmer has been hoisted on his own petard".

"I don’t have any sympathy on a personal level," she told LBC, adding that she didn't believe top civil servant Sir Olly Robbins should have been sacked for his role in the Foreign Office's failure to disclose details of Mandelson's vetting failure.

"New Labour in particular created this very rigid system of independence - which essentially made decisions unaccountable and he’s now essentially blaming the guy who’s made the decision in the system that they created," she told LBC

Read more: A Prime Minister in the dark, or in denial? Mandelson vetting row raises serious questions, writes Andrew Marr

Read more: Who is Sir Olly Robbins?

It comes after the top Foreign Office civil servant gave damning evidence to a panel of MPs on Tuesday describing No10's "dismissive" approach to vetting the former US ambassador.

Speaking with Tom Swarbrick on Tuesday, Liz Truss also went on to insist that it was the "dysfunctional" system operating within the civil service that ultimately led to her own ousting as PM after just 45 days.

“These are two separate examples of a dysfunctional system where the person who has been elected to run the country doesn't actually have control of the levers and in some cases doesn't know what's going on," she told Tom.

Insisting her own economic decisions had "very little" impact on the market turmoil that followed her so-called mini-budget, the former PM instead laid the blame at the door of the Bank of England.

Shunning Starmer's suggestion that she "crashed the economy", Truss insisted that the bank's decision to sell Gilts on the eve of the mini-budget was the reason for the economic slump.

"Now, the difference between me and Keir Starmer is, is I'm a critic of the system. I even wrote back in 2009 that we needed to have an accountable civil service... Keir Starmer is a lover of the system."

"I don't like living in a country where the Governor of the bank of England is making decisions, the Permanent Secretary of the Foreign Office is making decisions that aren't sanctioned by our elected leaders.

"But I don't blame Olly Robbins for that because he was following the law. You have to change the law. And this is the point I would make to anybody who does want to become Prime Minister in the future.

"Unless these laws are repealed, like the Constitutional Reform and Governance act, like the bank of England act, you will not have the power to make the changes that the country needs."

It comes after Liz Truss’s legal "cease and desist" letter to Sir Keir Starmer demanding he stop saying she "crashed the economy" was done for ‘publicity,’ according to former Chancellor Kwasi Kwarteng.

Ms Truss's legal team sent Sir Keir a cease and desist letter saying his claim that his predecessor-but-one "crashed the economy" or was "crashing the economy" was defamatory and "false and misleading".

Sir Keir Starmer insisted at the time that he will not soften his assertion that she crashed the economy.

Speaking with LBC, the former PM said the government hadn't been informed of the Bank's plan to sell-off gilts at the time of the mini-budget, systems she likened to those that led to Starmer being kept in the dark.

"In the case of the bank of England, when I was Prime Minister, we didn't know that they were selling 40 billion or announcing the sale of 40 billion pounds worth of government gilts the night before our budget.

"And they essentially had complete control over monetary policy. They made decisions that did not have political input and they made decisions on the timing of their decisions as well. So that's just one example I could go through."

"I described today's altercation as blob versus blob, because Keir Starmer is somebody who believes in independent experts making decisions," she told LBC on Tuesday.

"But what he's doing is, when he doesn't like the decision, he's then, you know, shooting the independent expert. I'm somebody who believes in democracy," she added.

“I believe that if Keir Starmer, knowing all the vetting report, wants to appoint Peter Mandelson as US Ambassador, he should be able to do that because I don't like living in a country where the Governor of the bank of England is making decisions, the Permanent Secretary of the Foreign Office is making decisions that aren't sanctioned by our elected leaders.

"But I don't blame Ollie Robbins for that because he was following the law. You have to change the law.”

While in Downing Street, Ms Truss unveiled a radical tax-cutting policy agenda that panicked the markets and saw the pound tank to a 37-year low against the dollar.

Since being ejected from office after just 49 days, the former premier has admitted her plan to cut the 45p top rate of tax may have gone too far but insisted it was not fair to blame subsequent interest rate rises on her mini-budget.

The new letter, sent by her lawyers and first reported by the Telegraph, argues that the market movement during her tenure in September and October 2022 should not be classified as a crash of the economy.

The weeks following Ms Truss's mini-budget saw adverse market reaction and mortgage costs soar.