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29 September 2022

The first stirrings of rebellion against Liz Truss

The riotous market response to the mini-Budget has, for some Tory MPs, destroyed the PM’s authority as party leader.

By Freddie Hayward

Liz Truss is in peril. The start of her premiership has included a ten-day period of national mourning, an inconsequential trip to the UN, and an exodus of confidence in the British economy. Her polling has tanked. Her chances of winning the next general election have shrunk. Honeymoon became treacle doom.

That does not mean a fifth Conservative prime minister since 2010 will be walking through the doors of No 10 anytime soon. But dissent among Tory MPs – the ultimate check on any party leader – is growing. One Tory MP told me yesterday that “it’s unsustainable for [Truss and Kwasi Kwarteng] to stay in place in the medium to long term”.

Another said they’d spoken to multiple colleagues who had sent letters of no confidence to the leader of the 1922 Committee. Interestingly, this Rishi Sunak supporter thought his former favourite was no longer in the running and Boris Johnson was the natural alternative among Tory MPs. “Johnson is the off-the-shelf solution for lots of people,” they said. A further Conservative MP noted that many of their colleagues will not be attending this year’s party conference, which begins on Sunday in Birmingham.

The root of this dissent is the riotous market response to the government’s mini-Budget last week. Some have queried why the market reacted in this way. Many of the plans were briefed to the papers beforehand and the key unexpected policy – the abolition of the top rate of tax – is only worth around £2bn. But that’s not the point. The point is that the plans were misleading. The government promised growth when there’s no sign its plans will achieve that. Speak to business people ­– those who flocked to Labour conference, for instance – and few want tax cuts. They want three things: certainty, infrastructure and people. As one former cabinet minister put it to me, “it’s a bit of a f**k up. There’s a couple of problems. The first major problem is that [Kwarteng] presented an equation with bits missing, and that was public expenditure.”

The question now is how the Chancellor balances that equation. The Prime Minister this morning on BBC local radio doubled downed on the mini-Budget and blamed global conditions for the economic turmoil. If that’s the plan, then the government need to find a way to reassure the markets, which will have to include a strategy to reduce debt in the long term.

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There’s a sense among MPs that now is not the time to remove the Prime Minister. But Truss’s authority is shot. She will face an unruly parliamentary party when the House of Commons returns on 11 October and the probability that she will lead the party into the next general election has fallen.

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[See also: Liz Truss and the rise of the libertarian right]