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Truss sees UK vision dismantled as rivals fight for her job

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UK Prime Minister Liz Truss was clinging to power on Monday after suffering the abject humiliation of being forced to U-Turn on much of the economic programme she announced only last month.

The premier watched on in the House of Commons as Chancellor of the Exchequer Jeremy Hunt, the former leadership rival she installed to rescue her premiership, dismantled much of what was left of her September 23 “Growth Plan.” She later apologised for her mistakes in a BBC television interview.

The astonishing reversal — designed to bring stability to the financial markets after weeks of turmoil — leaves Truss in office but toothless and unable to proceed with the tax-cutting platform that won her the Conservative Party leadership contest.

Now, even the premier’s closest supporters are asking how long her leadership can last, according to ministers and aides in her government, who asked not to be named discussing her future. Truss is braced for further challenges to her authority in coming days, they said.

However, both Truss allies and internal opponents expressed doubts that she could be removed as soon as this week. Only five Tory MPs have publicly called for her to quit, and some two-thirds would need to do so for Conservative leadership rules to be changed. She’s currently protected for her first year of office and last night pledged to lead the party into the next election.

“The anxiety-inducing element of all of this is that there isn’t a path,” Simon Hoare, an MP from the moderate wing of the party, said in an interview on BBC radio on Tuesday. Hoare said there’s no consensus on if or how the Tories should get rid of the prime minister, who else could help to bring the party together as leader, and even whether they were trying to win the next election or just avoid a landslide defeat.

“Until that issue is sort of settled — what are we trying to achieve here? — that’s always going to make it difficult,” he said. UK markets were calm on Tuesday, with the pound and gilts trading little changed.

Premier ‘not under a desk’

Hunt’s statement followed Truss’s sacking three days ago of his predecessor, Kwasi Kwarteng, in a desperate bid to stay in power.

The prime minister earlier failed to turn up in the chamber to answer an urgent question from the opposition Labour Party to explain the previous finance minister’s dismissal. Instead, she left it to Leader of the House of Commons Penny Mordaunt — another vanquished opponent from this summer’s Tory leadership contest — to parry questions.

Mordaunt showed her party what they’d missed out on, shooting barbs at Labour, apologising for the events leading up to Monday’s policy reversal, and at one point memorably saying of Truss’s absence: “The prime minister is not under a desk.”

A smiling Truss entered the chamber toward the end of Mordaunt’s appearance, and stayed for about half an hour, watching Hunt’s ensuing statement.

A person familiar with the matter said she’d been absent earlier because she was holding a meeting with Graham Brady, the influential chairman of the Tory Party’s 1922 Committee of backbench MPs, which controls leadership rules and challenges. While the meeting was described as pre-planned, it will have been a useful gauge for Truss of her standing, because Brady is attuned to the mood of the Parliamentary party.

Dire polling

Truss later held a meeting with the One Nation Conservatives, a caucus of centrist MPs who her team regards as the biggest threat to the premier. Simon Hoare, one of the MPs present, said Truss was apologetic for mistakes that had been made and that no one in the meeting had suggested to her that she should stand down. She later apologized on national television.

“I do want to accept responsibility and say sorry, for the mistakes that have been made.” Truss told the BBC. Asked if she felt “humiliated,” she replied: “It hasn’t been perfect. It’s been a difficult time.”

Speaking ahead of a private reception with her cabinet that Truss was due to host on Monday night, a cabinet source said there was no sense yet that ministers were imminently turning against her.

Nevertheless, the mood in the party is funereal, amid dire polling that’s given Labour huge leads — with a Redfield and Wilton Strategies survey on Monday putting the opposition 36 points ahead — the biggest lead for any party in 25 years.

If there’s hope for Truss, it lies in the fractured Tory opposition to her, with little sign of her rivals coalescing around a replacement. The camps of two potential successors descended into infighting on Monday amid claims and counter-claims about clandestine plotting.

Rishi Sunak, the former chancellor of the exchequer, was contacted in recent days by a senior Tory MP on behalf of Mordaunt, a person familiar with the conversation said. The MP made Sunak a formal offer to form a unity ticket to replace Truss, but Sunak told them he wouldn’t entertain it, the person said. An ally of Mordaunt said the approach was not made with her authority.

The revelation casts doubt on whether Sunak and Mordaunt would be able to agree on a joint ticket, following speculation in Westminster that some MPs were seeking a coronation to avoid another protracted leadership contest.

Hunt

Separately, several Tory MPs from different factions said they had received personal text messages in recent days from Sunak in what they saw as the clearest sign yet that he’s seeking to build support for another tilt at No. 10. A source close to Sunak denied he was involved in discussions about replacing Truss.

One minister compared Truss’s position to the final weeks of her predecessor, Boris Johnson’s administration, when he clung onto power but it became inevitable there would be another crisis that proved fatal. Another major flash-point in the coming days or weeks would make the pressure on Truss to resign unbearable, the minister said.

Some Tory MPs watching Hunt’s announcement — which included cutting short a government program to subsidize domestic energy bills said it could cause more problems down the track. One MP said that thousands of Tory swing voters could now see both their mortgages and energy bills increase by thousands of pounds in 2023, resulting in an “electoral black hole” that would guarantee defeat at the next election.

One bright spot for Truss: Hunt’s elevation had spurred speculation that he too could aspire to succeed her. But late on Monday, he told Sky News “I rule it out, Mrs. Hunt rules it out, three Hunt children rule it out.”

© 2022 Bloomberg



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