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.
