Liz Truss to face wretched week at Tory Party conference after mini-budget turmoil
Liz Truss is set to face a wretched week at the Tory Party conference after the disastrous reaction to Kwasi Kwarteng’s tax-cutting mini-budget.
The prime minister arrived in Birmingham on Saturday looking buoyant just hours before yet another injurious poll was released.
Hopes to be greeted by an adoring host of members have likely been dashed as some Tory MPs have questioned whether she will still be PM by the end of the year.
Nearly two dozen senior Conservative MPs have told Sky News they will not be attending after a tumultuous week that saw the pound hit a record low against the dollar and the Bank of England stepping in to prevent a pension funds collapse.
Ms Truss and her chancellor have doubled down in defending the £45bn of unfunded tax cuts that caused the economic turmoil, insisting it is necessary for growth.
The PM on Saturday said “rough decisions” were needed to boost growth and told the Sunday Telegraph she wants to “bring people with me on this journey”, insisting the “status quo isn’t an option”.
There are concerns the situation could get worse if the Bank of England is forced to hike interest rates to shore up the currency and keep inflation down.
A series of polls taken this week have shown a massive drop in popularity for the Tories and a record high for Labour following the mini-budget.
The latest poll from Opinium showed 55% of voters disapprove of both Ms Truss and Mr Kwarteng while Labour enjoyed a 19-point boost.
And 75% of all voters think they have lost control of the economy. When it comes to Tory voters, 71% think they do not have the economy under control versus just 24% who believe they do.
Many of Ms Truss’ own MPs have been talking out against her economic plan and Tory grandee Michael Gove, who backed Rishi Sunak, is expected to demand the party changes course during eight official appearances at the conference.
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Truss arrives at Tory conference
Senior backbenchers told The Independent the PM has a matter of days to row back on tax and welfare cuts or a rebellion could see her removed from Downing Street by Christmas.
There are reports of letters going in to the chair of the backbench 1922 Committee from MPs calling for a vote of no confidence.
Under current rules she is safe from a leadership challenge for a year after her election but the 1922 executive could change the rules if demand from Tory MPs is overwhelming.
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News on Saturday that Mr Kwarteng held a champagne reception with hedge fund managers just hours after the mini-budget was met with incredulity.
A source close to the chancellor denied he had provided guests with privileged information and said: “The government’s ambitions on lowering the tax burden are hardly a state secret.”
Truss needs to reset if she is to survive
Liz Truss starts her first Conservative Party conference less than a month – 25 days – since becoming leader, all the more notable given 11 of those days were spent in official mourning for the death of the Queen.
Also notable in that time is that the government spent upwards of £160 billion, Sterling collapsed to the lowest level since 1985, UK is now at threat of downgrade by credit rating agencies, swathes of cheaper mortgages have disappeared from the market, the Bank of England has done an emergency intervention to save pension funds and the Tories have recorded their worst opinion poll rating for YouGov since the company was founded in the late 90s.
Everybody – Tory MPs, institutions, voters looking at the economic turmoil to come – is anxious.
Ms Truss’s most important job is to show the county and her party whose side she is on.
Which is why the story tonight from the Sunday Times about her Chancellor Kwasi Kwarteng is so damaging.
On the day of the mini-budget, where he cut taxes for the richest, he went to a hedge fund party hosted by Andrew Law, Tory donor. 30 donors and financiers were there as he went round the top.
I’ve spoken to someone who has been at events such as these recently. They are amazed at just how casual Kwarteng is about spraying bold, potentially market moving views around such events, on topics such as the governor of the Bank of England Andrew Bailey.
Some in the City worry such talk undermines the credibility of the UK’s independent financial institutions, after the watchdog OBR and Treasury expertise already came in the firing line. Careless talk costs credibility.
Another difficult moment, one of just many.
Many Tories think Liz Truss now needs to reset with her party this week to survive.
‘The worst is yet to come’
Opposition parties used the opening of the Conservative conference to hit out at the Tories, with the SNP saying the worst is yet to come.
The SNP’s Westminster leader Ian Blackford said: “It’s been a disastrous first few weeks of her premiership but if the rhetoric from the Tories is to be believed, the worst of this Truss government is yet to come.”
His comments came after a key ally of Ms Truss’, Levelling Up Secretary Simon Clarke, signalled ministers are looking to shrink the overall size of the state alongside falling tax cuts.
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Truss acknowledges ‘some disruption’
And Sir Keir Starmer said it was “unacceptable” voters nor MPs had had any say on the new economic measures announced.
“The economy is not a laboratory experiment for the maddest scientists of the Conservative Party,” the Labour leader wrote in the Sunday Telegraph.
“The pain about to be inflicted on the whole country is the result of a prime minister and a chancellor wedded to a disastrous ideology.”
The conference will open today with a tribute to the Queen but it is Mr Kwarteng’s speech on Monday and Ms Truss’ closing speech on Wednesday that will command the political attention.
A famine has been declared in Gaza City and the surrounding neighbourhoods.
The Integrated Food Security Phase Classification (IPC) – a globally recognised system for classifying the severity of food insecurity and malnutrition – has confirmed just four famines since it was established in 2004.
These were in Somalia in 2011, and in Sudan in 2017, 2020, and 2024.
The confirmation of famine in Gaza City is the IPC’s first outside of Africa.
“After 22 months of relentless conflict, over half a million people in the Gaza Strip are facing catastrophic conditions characterised by starvation, destitution and death,” the report said, adding that more than a million other people face a severe level of food insecurity.
Israel Gaza map
Over the next month conditions are also expected to worsen, with the famine projected to expand to Deir al-Balah and Khan Younis, the report said.
Nearly a third of the population (641,000 people) are expected to face catastrophic conditions while acute malnutrition is projected to continue getting worse rapidly.
Over the next year, the report said at least 132,000 children will suffer from acute malnutrition – double the organisation’s estimates from May 2024.
Israel says no famine in Gaza
Volker Turk, the UN Human Rights chief, said the famine is the direct result of actions taken by the Israeli government.
“It is a war crime to use starvation as method of warfare, and the resulting deaths may also amount to the war crime of wilful killing,” he said.
COGAT, the Israeli military agency that coordinates aid, has rejected the findings.
Israel’s foreign ministry said there is no famine in Gaza: “Over 100,000 trucks of aid have entered Gaza since the start of the war, and in recent weeks a massive influx of aid has flooded the Strip with staple foods and caused a sharp decline in food prices, which have plummeted in the markets.”
Another UN chief made a desperate plea to Israel’s prime minister to declare a ceasefire in the wake of the famine announcement.
Tom Fletcher, UN under-secretary general for humanitarian affairs, said famine could have been prevented in the strip if there hadn’t been a “systematic obstruction” of aid deliveries.
“My ask, my plea, my demand to Prime Minister Netanyahu and anyone who can reach him. Enough. Ceasefire. Open the crossings, north and south, all of them,” he said.
The IPC had previously warned famine was imminent in parts of Gaza, but had stopped short of a formal declaration.
Palestinians struggle to get aid at a community kitchen in Gaza City. Pic: AP
The latest report on Gaza from the UN Office for the Coordination of Humanitarian Affairs (OCHA) says there were almost 13,000 new admissions of children for acute malnutrition recorded in July.
The latest numbers from the Gaza health ministry are 251 dead as a result of famine and malnutrition, including 108 children.
But Israel has previously accused Hamas of inflating these figures, saying that most of the children who died had pre-existing health conditions.
The Ukrainian suspected of coordinating attacks on the Nord Stream pipelines had served in Ukraine’s Secret Service and in the Ukrainian Army’s special forces, Sky News understand.
Serhii K., 49, was arrested in northern Italy on Thursday following the issuance of a European arrest warrant by German prosecutors.
It is not known whether he was still serving at the time of the pipeline attack in 2022 and Ukraine’s government has always denied any involvement in the explosions.
According to sources close to the case, the suspect has been found in a three-star bungalow hotel named La Pescaccia in San Clemente, in the province of Rimini.
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Man arrested over Nord Stream attacks
When military officers from Italy’s Carabinieri investigative and operational units raided his bedroom, he didn’t try to resist the arrest.
The hotel’s employees have been questioned, but no further evidence or any weapons were found, the sources added.
Serhii arrived on Italy’s Adriatic coast earlier this week, and the purpose of his trip was a holiday. He was found with his two children and his wife.
At least one of the four people within his family had a travel ticket issued in Poland. He crossed the Italian border with his car with a Ukrainian license plate last Tuesday.
He was travelling with his passport, and he used his real identity to check into the hotel, triggering an emergency alert on a police server, we have been told.
A satellite image shows gas from the Nord Stream pipeline bubbling up in the Baltic Sea. File pic: Roscosmos via Reuters
After the arrest, he was taken to the Rimini police station before being moved to a prison in Bologna, the regional capital, on Friday.
Deputy Bologna Prosecutor Licia Scagliarini has granted the German judicial authorities’ requests for Serhii’s surrender, but Sky News understands the man told the appeal court that he doesn’t consent to being handed over to Germany.
He also denied the charges and said he was in Ukraine during the Nord Stream sabotage. He added that he is currently in Italy for family reasons.
While leaving the court, he was seen making a typical Ukrainian nationalist ‘trident’ gesture to the reporters.
The next hearing is scheduled for 3 September, when the Bologna appeal court is set to decide whether Serhii will be extradited to Germany or not. He will remain in jail until then.
In Germany, he will face charges of collusion to cause an explosion, anti-constitutional sabotage and the destruction of structures.
German prosecutors believe he was part of a group of people who planted devices on the pipelines near the Danish island of Bornholm in September 2022.
Serhii and his accomplices are believed to have set off from Rostock on Germany’s north-eastern coast in a sailing yacht to carry out the attack.
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The explosions severely damaged three pipelines transporting gas from Russia to Europe. It represented a significant escalation in the Ukraine conflict and worsening of the continent’s energy supply crisis.
According to a US intelligence report leaked in 2023, a pro-Ukraine group was behind the attack. Yet, no group has ever claimed responsibility.
Spare pipes for the Nord Stream 2 gas pipeline. File pic: Reuters/Fabian Bimmer
Sky News understands Genoa’s Prosecutor’s Office in northern Italy has requested their colleagues in Bologna to share the information related to Serhii.
Anti-terrorism prosecutors are investigating another alleged sabotage linked to the Russian shadow fleet oil tanker Seajewel, which sank off the port of Savona last February.
On Thursday, they asked an investigative police unit to figure out whether there is a link between that episode and the Nord Stream attacks.
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