Tory Rebels Are Already Plotting, Less Than A Month Into Liz Truss's Government
Liz Truss outside Downing Street (alamy)
After only weeks in office, the new Prime Minister is heading to Conservative party conference in Birmingham haunted by ominous opinion polls and irate Tory MPs.
It is hard to imagine even the most pessimistic reaches of Liz Truss's psyche envisaging that she could be heading to her first big gathering of the Tory party as Prime Minister in such dire circumstances.
After an extraordinary week that saw her plans for sweeping tax cuts trigger a dramatic fall in the pound, forcing the Bank of England to intervene to prevent even greater economic calamity, Truss is now facing down a Conservative backbench rebellion, and she hasn't even hit a month in the top job.
While the Prime Minister prepares for Birmingham, in Westminster Tory MPs – many of whom say they are staying well away from Conference – are starting to plot how they could unpick last week's 'mini-Budget', which has seen the Conservatives plummet in the opinion polls.
A jaw-dropping YouGov poll published on Thursday put the Tories 33 per cent behind Labour, the largest lead in decades, and a margin that would decimate the party if replicated in a general election.
Charles Walker, Tory MP for Broxbourne, yesterday told Times Radio that the question ahead of the next election was not whether the Tories could win it, but how much they would lose it by.
An ex-Downing Street official this week told PoliticsHome "it's over" already for the Truss regime, while a former minister said the new Prime Minister risks not just losing the next election, which is expected to take place in 2024, but "putting the Tories out of power for quite a long time”.
PoliticsHome understands that Conservative rebels have two core objectives.
Firstly, to force Truss and Chancellor Kwasi Kwarteng to bring forward the fiscal policies they currently intend to announce on 23 November, as well as publish the Office for Budget Responsibility assessment of their plan to tax cuts through borrowing worth tens of billions of pounds.
This, argue senior Conservative MPs like Treasury Select Committee Chair Mel Stride, could go some way to reassuring financial markets after a tumultuous week.
On Friday, however, the Prime Minister and the Chancellor rejected calls to accelerate the publication of the OBR forecast, setting up a battle in the coming weeks.
MPs' second objective is to convince the Prime Minister to bin her pledge to scrap the 45 per cent tax rate.
While Truss and Kwarteng argue it will help kickstart growth by encouraging investment, dismayed Tories say it is a politically toxic move in a cost of living crisis, and one that inevitably diverted attention away from support being provided to help people with their energy bills.
"There was no reason to cut the 45 per cent at this stage and had they not done that there could have been more focus on the help for individuals," said one ex-minister. Conservative MPs Julian Smith and Robert Largan have publicly called for it to be binned, and privately many more agree.
The current thinking is that Conservative backbenchers opposed to the policy will seek to stop it in its tracks by opposing parts of the forthcoming Finance Bill.
But for now at least the government is showing no signs of changing course.
One Treasury source said that the Prime Minister and Chancellor were "nowhere near" the point of reversing their tax policy, despite the backbench uproar and catastrophic opinion polling.
PoliticsHome understands that the view inside government is that the markets overreacted to Kwarteng's fiscal statement and that the subsequent economic chaos will go down as a short-term blip.
That was the position set out by Conservative party chairman Jake Berry on Friday when he told The Times that people should "ignore the commentariat" and judge the Truss and Kwarteng 'Growth Plan' after it had been allowed time to deliver in a year's time.
"Economic markets both react and overreact in these situations, and how I will judge whether this has been a real success is when today or tomorrow people’s pay packets drop through the letterbox, and they see the fact that this government has cut their tax, putting money back into the pockets of hardworking families," said Berry.
"I think people will judge us on where the markets are not tomorrow, or the day after, [but] in six,12 or 18 months’ time.”
Meanwhile, the mood within the Tory party isn't much less fractious than it was in the dying days of the Johnson administration, despite No 10 having been overhauled by Truss's appointment as Prime Minister less than a month ago.
Those who backed Rishi Sunak in the contest to succeed Johnson complain that the Prime Minister has assembled a government of loyalists at the expense of more talented MPs, doing little to unite the party after a bitter leadership campaign.
"A leader can only stay in office if they have the confidence of their parliamentary party and Liz Truss came in to office promising to respect that by building a broad based Cabinet on talent rather than loyalty," one backbench source said.
“She then did exactly the opposite and went even further, revelling in showing utter contempt for anyone who didn’t support her. A risky strategy when the majority of the parliamentary party didn’t want her in the first place."
One Sunak backer said the events of the last week proved that Truss was out of her depth. "She'd drown in a petri dish," they quipped.
Truss will take to the stage in Birmingham on Wednesday knowing that the stakes are high.
Be it winning over the general public, the markets, or a sizable chunk of the parliamentary Conservative party, the Prime Minister is already under pressure to change minds – and fast.
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