Liz Truss ‘could be gone by Christmas’ unless she backs down from ‘livid’ Tory MPs

Liz Truss has days to fight back on controversial tax and welfare cuts or face a parliamentary rebellion that could see her out of Downing Street by Christmas, Tory MPs have warned.

As the Prime Minister arrived in Birmingham for her first annual conference as leader, senior MPs told The Independent that MPs across the party are “livid” at suggestions she plans to renege on the benefit increase promised to pay for the chancellor’s tax cuts for the rich. Mini-budget by Kwasi Kwarteng.

One described the combination of austerity for the poor and freebies for the rich as “electoral suicide” and confirmed Tory MPs were talking to Labor about parliamentary means to stop it.

Although no organized plots have yet formed, they were expected to get under way in earnest, unless Mrs Truss shows signs of backing down when the Commons return from recess on October 11.

Former Tory chancellor Kenneth Clarke told The Independent that Ms Truss and Mr Kwarteng must “learn important lessons quickly” after a “politically inept” mini-budget including £45bn of tax cuts unfunded, which sent markets into freefall and work surged into advantages. of up to 33 points in the polls.

Another veteran of Sir John Major’s Treasury team, Phillip Oppenheim, said Truss was “probably the last Conservative prime minister”.

“Nothing in last week’s mini-budget indicates that our new leaders have the slightest understanding of our long-term structural problems or the solutions, beyond a half-digested two-dimensional version of Thatcherism,” Oppenheim said. .

Meanwhile, the chairman of the influential Commons Treasury Committee, Mel Stride, warned Mr Kwarteng that the delay in publishing his medium-term fiscal plan – and the Office for Budget Responsibility’s assessment ( OBR) of its impact expenditure – could cause misery to millions of people. encouraging the Bank of England to raise interest rates higher.

The former finance minister urged the chancellor to bring the publication forward from 23 November to allow the Bank’s Monetary Policy Committee (MPC) to assess the City’s reaction ahead of the rate-setting meeting on 3 November, in which analysts expect an increase of up to half a percent. point.

The Prime Minister and Chancellor insisted they were sticking to their timetable after meeting the OBR on Friday. But Stride told The Independent: “If the OBR’s forecast comes out ahead of the MPC meeting, and if it goes down well with the markets, there will be less uncertainty, less pressure on sterling and bond yields and that could lead to the MPC’s decision. may go with a lower and less painful rate hike than would otherwise have been the case.”

“It’s not ridiculous to suggest he might have left before Christmas,” warns the later banker

(son PA)

Backing the early posts, veteran Tory MP Sir Roger Gale told The Independent that Ms Truss and Mr Kwarteng “need to move very quickly, because people are scared”.

With around 1.6 million households on variable rate mortgages worth an average of around £140,000, and 300,000 fixed rate offers each quarter, a change of just half a point in the rate can add £700 a year typical. living costs for a large number of voters, and much more for many of them.

Sir Roger said Mrs Truss would be under “very considerable pressure” by the end of the year unless she could offer some reassurance to the public about the economy.

“I know what it’s like to have men and women crying because their homes are being taken away from them,” he said.

A former minister told The Independent: “He must reverse Kwarteng’s abolition of the 45p additional rate of income tax and stop talking about benefit cuts, because it is electoral suicide .

“His position is precarious. There was no justification for the measures they have announced, which went far beyond what he promised in the summer. There are no organized conspiracies that I’ve heard of, but the general opinion across the party is angry and unless something changes soon, people will have arguments when we return to the Commons next week.”

A Tory MP said some MPs were talking about moving against Mrs Truss, including discussing what form a leadership contest might take, if her handling of the economy does not improve in the next two months.

The MP said despite the risk of ousting another leader after three were forced out in six years, it was “very difficult to see us recovering” with Ms Truss in charge.

Local radio stations grill Liz Truss in a series of interviews

While the current rules give a new leader a year’s grace before facing a challenge, several MPs pointed out that the 1922 Committee has the power to change the rules, as it threatened under Boris Johnson.

Some suggested that any reforms should avoid a repeat of this summer’s drawn-out leadership contest that handed the final decision to 175,000 party members. Talk has already begun about the possible “coronation” of a single candidate – as happened with Michael Howard in 2003 – to take the decision into the hands of the members.

An MP supporting Rishi Sunak said it would be “absolutely crazy” to have another contest so soon, but added: “Anger can be such that peers feel differently – the rules can always be changed.”

Another said: “I think the 45p decision is unsustainable and I can’t see it going through parliament. When the government talks then about leaning into spending, and especially welfare, it’s extremely bad optics.”

Ministers have refused to confirm the 10% inflation-adjusted increase in benefits promised by former chancellor Sunak, with reports suggesting Ms Truss may seek to limit the rise in average pay to around 6%.

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The MP said the “politically toxic” move would only contribute around £6bn towards a black hole of up to £60bn-£70bn which was likely to be revealed in the OBR report but would be considered, along with proposed cuts to public service spending, as “completely acceptable” by many conservatives.

“I think he’s in enormous danger,” said the later banker. “It’s not ridiculous to suggest he could leave by Christmas. That’s possible. Everything is pushing for him to relax some of these policies, but the question is whether he tries to be an immovable object when this irresistible force hits.”

Mrs Truss admitted on Saturday that there had been “disruption” to the UK economy as a result of the mini-budget.

However, he showed no sign of preparing to step down, insisting he had “acted decisively” and would maintain an “iron grip” on the country’s finances. Close Cabinet ally Simon Clarke hinted strongly at spending cuts, saying the UK’s “extremely large” state needed to be “fully aligned with a lower tax economy”.

And Kwarteng said he had “no choice” but to announce measures he acknowledged were “not universally popular”. In a sign of cuts, he insisted he would produce a “credible plan” to restore public finances with a “commitment to spending discipline”.

Chancellor Kwasi Kwarteng acknowledged the measures announced in the mini-budget were “not universally popular”

(PA)

Former leadership rival Jeremy Hunt said it was “premature” to judge Mrs Truss.

“He won the election fairly and we have to give him time,” he told GB News.

“I think in a couple of months the markets will have settled down, we’ll have shown the country as conservatives how we’re going to balance the books … And I think it will be time to make judgments.”

Truss supporter Alexander Stafford, whose Rother Valley seat is among the 2019 Red Wall constituencies believed most vulnerable to a Labor fightback, insisted the conference was a “huge opportunity” for the Prime Minister .

“I think the conference will be a great opportunity for Liz to put her full stand out to the nation and really demonstrate the long-term positive changes she will make,” he told The Independent.

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