Pippa Crerar Political editor
Sun, 16 October 2022 at 8:34 pm
Liz Truss is fighting for her political survival, with Conservative MPs threatening to oust her and even allies warning she has just days to turn around her premiership despite ripping up her economic strategy and appointing Jeremy Hunt as chancellor.
The beleaguered prime minister will attempt to shore up her crumbling support by gathering her cabinet ministers at No 10 on Monday and then embarking on a series of meetings with mutinous Tory MPs before the next budget in a fortnight’s time.
After crisis talks at Chequers over their new fiscal plan on Sunday, Hunt insisted that Truss was still “in charge” despite her increasingly perilous position, as he warned of further public spending cuts and failed to rule out more U-turns on her disastrous mini-budget including scrapping the 1p cut to the income tax base rate.
Ministers will wait anxiously for the markets to open – the first test of whether Truss’s decision to sack Kwasi Kwarteng as chancellor and tear up her mini-budget will be enough – amid fears that sterling could head towards parity with the dollar and rising bond yields put upward pressure on mortgage rates.
A poll by Opinium for the Trades Union Congress using the MRP method to estimate constituency-level results, projected a 1997-style landslide for Labour, with the party winning 411 seats.
It suggests the Conservatives would lose 219 seats to end up on 137, with the Liberal Democrats on 39 seats and SNP on 37, with 10 cabinet ministers including Jeremy Hunt, Jacob Rees-Mogg, and Thérèse Coffey losing their seats in a general election, along with former prime minister Boris Johnson.
Meanwhile, plotting at Westminster continued with a group of senior Tory MPs, many of them supporters of Rishi Sunak, planning to meet on Monday night for dinner amid speculation that as many as 100 no confidence letters have been submitted to Sir Graham Brady, chairman of the backbench 1922 Committee.
Veteran Tory MP Crispin Blunt was the first to go public in calling for Truss to step down, saying he did not think the prime minister could survive the current crisis. “I think the game is up and it’s now a question as to how the succession is managed,” he said.
The former minister, who was the first MP to call for Iain Duncan Smith to quit as party leader back in May 2003, told Channel 4: “If there is such a weight of opinion in the parliamentary party that we have to have a change, then it will be effected. Exactly how it is done and exactly under what mechanism … but it will happen.”
Another backbencher, Jamie Wallis, who entered parliament in 2019, broke cover and joined the call for Truss to quit, confirming to the Guardian that he had submitted a no confidence letter.
“In recent weeks, I have watched as the government has undermined Britain’s economic credibility and fractured our party irreparably. Enough is enough. I have written to the prime minister to ask her to stand down as she no longer holds the confidence of this country,” he said.
As she tries to stave off open rebellion, Truss will this week continue her meetings with small groups of Tory backbenchers as she desperately tries to convince them to back her, while Hunt will hold a series of roundtables on the economy for MPs.
However, Downing Street insiders acknowledged the prime minister’s position was extremely fragile. “Her decision to bring Jeremy on board buys us some time. The budget will look very different now. But we’re taking one day at a time,” one said.
Another government insider suggested that it would be “one helluva gamble” for Tory MPs to try to oust the prime minister when there was no obvious successor to take over from her. But one leading rebel said: “I don’t see how Liz can survive. Jeremy is a good man but her credibility is below zero.”
The executive of the 1922 Committee will meet on Wednesday, as usual, with members expected to discuss the precariousness of the prime minister’s position. However, officers of the committee are expected to meet today. Sources close to Brady have suggested he would feel compelled to tell Truss to stand down or face defeat in a vote.
The group’s treasurer, Geoffrey Clifton-Brown, told the BBC that the rules that keep Truss safe in office for a year could be ditched if enough Tory MPs support it. “Of course we have the power to change the rules,” he said.
However, he added that such a move would require the backing of a substantial number of Tory MPs. “We will only change the rules if it is very clear that a large majority, by which I mean probably 60% to 70%, of the party want the rules to be changed.”
The new chancellor, appointed after the sacking of Kwasi Kwarteng in a day of chaos on Friday, has spent the weekend trying to offer reassurance that the government had control of the economy.
Yet Hunt painted a grim picture of what it would take to stabilise it after a turbulent few weeks during which the government scrapped plans to cut the 45p top rate of income tax and freeze corporation tax. He is also understood to be considering pushing back by a year plans to cut a penny off income tax next April.
“We are going to have to take some very difficult decisions, both on spending and on tax,” he told the BBC’s Laura Kuenssberg.“ Spending is not going to increase by as much as people hoped and indeed we’re going have to ask all government departments to find more efficiencies than they had planned. Taxes are not going to go down as quickly as people thought, and some taxes are going to go up.”
Treasury sources admitted that even defence spending, which Truss had promised to increase by 3% of GDP, and the health service would face cuts. The Office for Budget Responsibility is understood to have identified a black hole in the public finances of £72bn – even greater than the £62bn outlined by the Institute for Fiscal Studies last week.
Truss’s remaining allies hope that Hunt’s appointment, and Truss’s dramatic U-turns on tax, will buy her enough time to get through to the budget on 31 October. Tory MPs are also struggling to coalesce around one obvious replacement.
Sunak, who came first among MPs in the leadership contest, remains the favourite, although Penny Mordaunt, who came third is understood to be sounding out colleagues and defence secretary Ben Wallace, popular among Tory members but who didn’t run last time, could also be a candidate for an effective Tory coronation.
Truss starts her most difficult week in power yet faced with speculation that she could be gone by the end of it. “Lots of my colleagues are facing wipeout at the next election and they may conclude that it’s better to try to get rid of her now and spend the next 18 months rebuilding,” one MP who supported Truss said.
Robert Halfon, a senior Tory backbencher, warned that a general election now would be a “bloodbath” for his party. He said Truss should apologise to the British people for “the mess of the past few weeks”, warning “it has to happen pretty soon, I can’t give you hours or days”.