Liz Truss: ‘I’m a low-tax Conservative – we have to weather the economic storm’

For a Remainer, it was a curious place to be. Shortly after noon on Tuesday, Liz Truss stood at the Dispatch Box and announced that the UK was ready to go it alone over Northern Ireland.

After 18 months of careful talks with the European Union about post-Brexit trade terms in the province, not enough progress had been made, she explained. It was time to act.

The decision to draft legislation to unilaterally suspend parts of the Northern Ireland Protocol underscored the political journey the Foreign Secretary had experienced over Brexit.

So forthright was her determination on the move – one that may yet lead to a trade war and legal action from Brussels – that colleagues briefed newspapers, complaining she was too “gung ho”. Their opinion is likely to remain unchanged after Nancy Pelosi announced on Thursday that the US Congress would not support a free trade agreement with the UK if the Government persists with what the House speaker referred to as “deeply concerning” plans to “unilaterally discard” the protocol.

Truss backed staying in the European Union in the 2016 referendum – the fallout from which still hangs over Westminster. But today, she has regrets.

“If I could go back to 2016, I would vote to leave,” she tells The Telegraph, mulling over the week that was in her palatial Foreign Office workspace. “What I’ve seen in both my job in trade and my role as Foreign Secretary is the new freedom and impetus that having an independent trade policy and independent foreign policy has enabled us to do. And also, the portents of doom haven’t come to fruition.”

But were you not one of the doomsayers yourself, Foreign Secretary? “When the evidence changes, I change my mind,” she responds. “I think that’s the right thing to do.”

A deepening Euroscepticism is not the only morphing that Truss, 46, has undergone over the last eight years – her political fortunes have been on a steady upward trajectory. At the time of the referendum, she was David Cameron’s environment secretary. It was her first Cabinet job after entering Parliament in 2010 as MP for South West Norfolk and climbing the ministerial ranks.

The role of justice secretary followed when Theresa May took over, followed by international trade secretary under Boris Johnson – making her a Cabinet survivor.

Then, last September, came the biggest job yet – promotion to one of the great offices of state, becoming the first female Conservative ever to head up the Foreign Office.

Since then, as Truss hovers near the top of Tory members’ approval ratings for cabinet ministers, politicos have been increasingly asking: are her eyes on the top job?

Even the briefest scan around her office is a reminder of Truss’s longevity at the top of government – her eighth anniversary in the Cabinet is in July. There are mugs linked to her justice days (she was the first female Lord Chancellor in British history); trinkets from foreign trips; a photo of the Cabinet standing two metres apart at the height of Covid.

The Churchill bust and photograph of the Queen predated her arrival, but the framed photograph of herself hugging one of the vast dogs from the Dulux adverts is a rare hint of her outside life (she admits she wants to get a dachshund, but her husband is saying no, noting – perhaps not unreasonably, given her foreign travel – that he would be lumped with looking after it).

Certainly, as frontline politicians go, Truss is more careful and calculated in her responses than some. Questions are followed by pauses that are seconds long. Answers are methodical. Any attempt to entice a comment away from the party line is acknowledged with a smile and rarely taken up. She is a master of pivoting back to an established position.

So it is that the first thing she wants to talk about is the meat of this week’s announcement, and why it matters so much. Her core message, intended for a European audience, is that nobody should doubt the UK’s resolve in pushing ahead with a unilateral solution. “What I want to be clear about is that we are determined to do this. And we won’t be blown off course, because this situation has drifted for a number of months,” she says.

The UK’s argument is by now familiar and all revolves around the protocol, the deal struck under Johnson’s premiership in 2019 that helped him deliver Brexit.

It was agreed that to keep the land border between Ireland and Northern Ireland open, checks instead would be carried out on goods coming in and out over the Irish Sea. But the trade frictions that have followed – the hundreds of pages of paperwork and subsequent delays – have strained stability in Northern Ireland and infuriated unionists.

London blames the EU’s inflexibility about tweaking the protocol. Brussels accuses the UK of reneging on legally binding promises. So the UK has vowed to start making the changes itself.

Truss is unapologetic: “What we know is the situation in Northern Ireland is worsening. So the time has come where we have to be resolute, we have to be clear that we are moving ahead to legislate for these solutions.”

Each proposed change is fiendishly technical and, ultimately, will be judged in real-world workability, but Truss is quick to defend one in particular: the UK’s suggestion for “green lanes” and “red lanes” for goods coming from the British mainland into Northern Ireland.

Green would be for products to be sold only in Northern Ireland, therefore facing minimal checks; red is for those that are travelling on into Ireland, thus entering the EU single market.

The system would be underpinned by commercial data – a sticking point with the EU, which wants more government oversight – and backed up with “strong enforcement”, Truss says.

“There would be both fines and the ability to remove those traders from the trusted trader scheme,” she explains in a warning that firms face expulsion if they do not play by the rules.

There are few signs yet that Brussels is willing to budge. Maroš Šefčovič, her opposite number in the European Commission, has made clear that his mandate from EU nations does not include rewriting the protocol and will not change.

According to those familiar with the situation, the pair had a “testy” exchange last week, when details of Truss’s plan leaked, although she chuckles and sidesteps the question when I ask if their talks have indeed been terse.

So, too, is a question tip-toed around when I ask whether the Prime Minister reined her back on the protocol, as reports have suggested.

She says “everybody agrees” the Good Friday Agreement has to be protected. On claims of being too gung ho, she seems unfazed: “I’m resolute and I’m determined.”

On the walls of Truss’s office hangs a painting of an amorphous white gas against a black background –perhaps a cloud, or a wisp of smoke, It is called Diplomacy, and Truss selected it herself. In the haze of war that has followed Russia’s invasion of Ukraine, the Foreign Secretary has played a leading role in the UK’s response – one recognised by Ukrainian President Volodymyr Zelensky.

At its core are a number of guiding principles: Vladimir Putin must fail; Ukraine must be armed; Russia must be crippled economically; and this must never happen again.

It is the fourth of those that is attracting growing attention behind the scenes, even as Ukraine remains gripped in a conflict in the east for its country.

The Quad – the UK, US, France and Germany – have been quietly holding talks about whether to sign some form of security guarantee for Ukraine. Discussions are still at an early stage, with the idea not being for a Nato-style Article 5 promise (which pledges mutual defence), but a vow to keep providing weaponry and support in the long term.

“What we’re working on at the moment is a joint commission with Ukraine and Poland on upgrading Ukrainian defences to Nato standard,” Truss acknowledges. “So we will scope out what that looks like, what the Ukrainians need. The question then is how do you maintain that over time?

“How do we ensure that there is deterrence by denial, that Ukraine is permanently able to defend itself and how do we guarantee that happens? That’s what we are working on at the moment.

“And that also applies to other vulnerable states such as Moldova. Because again, the threat is broader from Russia, we also need to make sure that they are equipped to Nato standards.”

The mention of Moldova is significant. Its positioning outside of the Nato security alliance and on the south-western border of Ukraine has led to fears Putin could consider invading.

Pushed for details, specifically whether she wants Western weaponry and intelligence provided to Moldova, Truss makes clear that this is on the cards.

“I would want to see Moldova equipped to Nato standard,” she says. “This is a discussion we’re having with our allies.” Because Russia poses a security threat to Moldova? “Absolutely. I mean, Putin has been clear about his ambitions to create a greater Russia. And just because his attempts to take Kyiv weren’t successful, doesn’t mean he’s abandoned those ambitions.”

Nato standard, an aide later explains, would involve members of the alliance giving modern equipment to replace Soviet-era gear and training up troops in how to use it. Quite a development, if it comes to pass.

Eight months into the role, Truss has used a number of big speeches to map out her foreign policy vision. One recent theme – criticism of the West for not spending more on defence.

Such interventions rarely name the UK, but the critique is implicit and Truss is known to be lobbying for a defence spending increase. She says spending 2 per cent GDP on defence – the official Nato target – should be a “floor” not a ceiling. The UK is a little above that. Some Tory MPs have called for 3 per cent of GDP defence spending, although Truss will not elaborate if she supports that figure.

So what would the consequences be if defence spending is not increased in the autumn Budget?

“I’m not going to involve myself in a discussion between the Defence Secretary and the Chancellor,” she says, before joking of the Treasury: “I’ve got enough of my own battles.”

Another core principle in Truss’s early set piece speeches – even before the Russian invasion of Ukraine – was that geopolitics is back.

She has been clear that China should not play a central role in the UK’s critical national infrastructure (translation: nuclear power and 5G networks). But what about the reliance on Chinese smartphones, televisions and computers? Today the Treasury is ordering businesses not to invest in Russia and is locking out the Russian economy. Should something similar happen to China?

“We certainly shouldn’t be strategically dependent on China,” Truss says, while also insisting trade links should continue.

Would she want to see a scaling back of Chinese electrical consumer goods? “I want to see us have more eggs in different baskets,” she says.

She points to trade deals being sought with Asian partners beyond China, such as India, though does not explicitly endorse a move away from Chinese goods.

Away from foreign matters, one issue dominates the headlines and looks set to do so for months to come - the cost of living crunch. The UK appears to be in the early throes of the dreaded “stagflation” – soaring prices and faltering economic growth together, each of which usually demands the opposite action in terms of interest rates and fiscal policy.

Truss, a lifelong Thatcherite (her fascination began aged eight, when she was made to play Thatcher in a mock election by her school) has never hidden her low tax credentials – indeed she was one of just three Cabinet ministers who voiced criticism around the table against the National Insurance rise when the policy was signed off back in September.

“I am a low-tax Conservative”, she says. “I think that’s important because we have to weather the storm and the way we’re going to weather the storm is through economic growth, through growing the economy.

“We’re not going to get anywhere if it’s just about dividing the pie differently. In the United Kingdom, we have to be generating income.”

The comments prompt another attempt to tease out some private thinking. Why was it, back in September, she had concerns about the National Insurance hike?

“Well, I obviously can’t discuss confidential Cabinet discussions,” she says, knowingly delivering the stock response on divisions around the top table.

But are there regrets? Would the Cabinet take the same decision today? “I know the Chancellor is working on how we address the very severe headwinds that we’re facing,” she responds, away on another pivot.

Another question on whether she wants an income tax cut this year – Chancellor Rishi Sunak has promised 1p off the basic rate but not until 2024 – also gets a straight bat.

Which leads neatly to the elephant in the room. In a Westminster bubble obsessed with what happens next, Truss’s political fortunes are the subject of endless speculation.

That, and her Margaret Thatcher poses. Truss has been photographed poking out of the top of a tank in camouflage and sporting a Russian fur hat in Moscow, in images that echo Thatcher in the 1980s.

In the eyes of her critics – including those close to other would-be Tory leadership hopefuls – it is a cynical attempt to associate herself with the Iron Lady in the eyes of party members, who will ultimately pick Johnson’s successor.

What says the Foreign Secretary? “What did Mrs Thatcher say?” Truss responds, reaching for the words. “I’ll try to recall her quote. I think she said ‘people make personal attacks when they’ve got nothing to say about the policy’.

“I think the most important thing about her was she was a great prime minister who turned our country around. But I am my own person, I’m not trying to emulate anybody else.”

Plenty of past occupants of this office have switched its green carpet and plush red curtains for the quarters behind that famous black Number 10 door – not least the current Prime Minister.

So, the big question: does she hope to lead her party one day? “I’m 100 per cent focused on being Foreign Secretary,” she says, with a speed that suggests a thought-through response.

“I think it’s fair to say that what has happened over the past six months has shattered European security. It’s one of the biggest moments in foreign policy for a generation and it is taking up all of my time.”

Even if the ball came rolling out of the scrum, to coin a phrase?

“As I said, I’m 100 per cent focused on foreign policy,” she repeats.

Which, it will be noted, is not a no.