Liz Truss could be removed as prime minister within “days or weeks” after a botched attempt to shore up her tottering premiership by sacking her chancellor and U-turning on one of her flagship policies, Conservative MPs believe.
Expectation in Westminster was that a group of Tory grandees will visit the PM, possibly as early as next week, to inform her that crumbling support on the backbenches means “the game is up” and she should consider her position.
In dramatic scenes, Ms Truss fired her close ally Kwasi Kwarteng, installing Jeremy Hunt as chancellor in his place in a bid to calm the markets, before going before the TV cameras to announce she will go ahead with the 6p hike in corporation tax which she had previously vowed to cancel.
But her eight-minute press conference, in which she took just four questions, was greeted with dismay by Tories, with one describing it as “agony” and another “shockingly bad”.
One former minister told The Independent: “She made Theresa May look like Barack Obama. She can’t communicate. She’s just not up to it.”
Another said: “She looked like she had been dragged there like a reluctant child being forced to explain itself. There was no contrition.”
And the markets did not respond with the relief Downing Street was hoping for. Having fallen on the news of Mr Kwarteng’s dismissal, gilt yields – effectively the interest rate charged for government borrowing – rose steeply after the PM’s appearance, ending the day higher than they began.
Senior ministers said that further volatility next week, following Friday’s closure of an emergency Bank of Engand bond-purchasing programme, could bring a hasty end to her premiership.
A snap poll of 1,088 voters by Savanta ComRes found that more than half (52 per cent) thought Truss was right to sack her chancellor, with 22 per cent saying she was wrong. But just 15 per cent said her decisions gave them more confidence in her premiership, against 44 per cent who were less confident.
Labour leader Sir Keir Starmer, whose party surged to a 34-point lead on 53 per cent to the Conservatives’ 19 in the latest poll, called for a general election. Truss had driven the economy “into a wall” while “trashing our institutions”, he said.
The prime minister said she was “incredibly sorry” to lose her long-time ally and friend. But neither Ms Truss nor Mr Kwarteng made any apology for the 23 September mini-Budget, which sent markets into a spin with a £45bn unfunded tax giveaway.
The prime minister said only that parts of the package had gone “further and faster than markets were expecting”, and required change to provide reassurance of the government’s “fiscal discipline”.
Just two days after telling the House of Commons there would be no cuts to public services, the PM admitted for the first time that spending will have to be reined in to fill the black hole left in the nation’s finances by Mr Kwarteng.
Economic think tank the Resolution Foundation calculated that, even after the £18.7bn U-turn on corporation tax – and the previous climbdown on a £2bn tax break for high earners – cuts totalling £20-£40bn will be needed to get debt falling as a proportion of GDP.
MPs made clear they expect Mr Hunt to rip up further elements of the Kwarteng package in the 31 October medium-term fiscal plan, in which he will set out tax and spend plans.
Former cabinet minister David Gauke said Truss was now “the prisoner of the Treasury, because it is the Treasury who will be telling the prime minister precisely what they need to do”.
One former minister told The Independent that Mr Hunt must have been given a “completely free hand” to review and rewrite Mr Kwarteng’s mini-Budget for him to have agreed to become the fourth chancellor within the space of four months.
Others suggested that the former health secretary may have taken the post to put himself in pole position for a looming leadership contest.
One MP said Ms Truss’s removal was now regarded as “imminent” by Tory parliamentarians, who were actively discussing how to ensure that they – and not the party membership – have the final say on choosing a successor.
“Everybody is talking in the corridors and on the WhatsApp groups about how awful it is,” said another. “There are two things they are asking – how can she be removed and has she got days or weeks?
“Even her supporters are joining the ranks of the disaffected. They have been sent out on the airwaves to defend her policy and now they have been made to look like idiots. Everybody is pissed off.”
Another former minister said: “She had a tiny glimpse of hope, and she blew it. This was the moment to completely change course. And she couldn’t even get the car out of neutral.”
And another added: “It’s not enough for the markets, and it’s too little too late for the party. And voters will just think it’s embarrassing.”
Ms Truss insisted in her press conference that she remained committed to her “mission to go for growth”, and again blamed global economic conditions and the war in Ukraine for the financial turbulence of the last month in the UK.
She conceded that “the way we are delivering our mission right now has to change”, but added: “I want to be honest, this is difficult, but we will get through this storm and we will deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.”
Mr Kwarteng’s removal came after he cut short a visit to New York to fly home following reports in The Independent that No 10 was planning to ditch parts of his Budget.
There was no sign of contrition in his letter to the PM accepting his dismissal after just 38 days as chancellor, and one day after he said he was “absolutely 100 per cent” sure he would stay.
Promising his support to Ms Truss, he stressed that he had been following her free-market agenda and wanted her to stick to it, saying: “I believe your vision is the right one.”
One Tory MP told The Independent that pushing Mr Kwarteng under a bus was a “last-ditch desperate measure” which would do nothing to restore her credibility, given that he had simply been implementing her economic agenda. The PM was now a lame duck who would no longer be able to get anything through parliament.
“Her days are numbered,” said the MP, who said conversations were under way on how she can be replaced before 31 October. “Let’s rip off the plaster quickly – we don’t want weeks and weeks of this.”
Another said: “She captivated the members with a fantasy during the leadership contest, but we have got to let go of that fantasy and hope that this is just a three or four-month interlude in the Conservative Party’s long and successful history.”
However, there were warnings that ejecting a third leader in three years will backfire on the party.
Veteran backbencher Sir Christopher Chope told Times Radio that “the hyenas are on the hunt” but warned that removing the PM would make the Conservatives “even more of a laughing stock than we are already”.
And, in a WhatsApp spat with fellow MPs, Nadine Dorries said that anyone who thought they could change leader again without a general election “needs a lie-down”.
CBI director general Tony Danker said it was “important” that the PM had responded to market concerns and called on the new chancellor to “continue to restore fiscal credibility to give markets and business confidence to invest”.
But TUC general secretary Frances O’Grady said: “Today’s U-turn will not help families already hit by higher mortgages and higher prices. And sacking the chancellor for implementing the prime minister’s plans is not the total change of direction we need.”
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