Tory conference is shrouded in gloom – has Liz Truss already sealed her own fate?
A little under four weeks as prime minister and it couldn’t really have gone worse for Liz Truss.
A mini-budget that precipitated a run on the pound (it has rallied a bit since), a £65bn emergency intervention by the Bank of England to prop up pension funds, and the withdrawal of nearly 1,000 mortgage deals from the market in anticipation of a big hike in interest rates later this year.
The Conservatives are experiencing their worst polling since the late 1990s and dozens of Tories are contemplating losing their seats at the next election.
The question for me in Birmingham this week is simple: Has Liz Truss’s disastrous mini-budget already sealed her fate?
Ask Conservative MPs, and there is already a movement to try to oust her. Her insistence that she will not reverse any elements of her budget, regardless of the political toxicity or the clear economic risks, has led some MPs to say privately they want her to go.
“There needs to be policy change and personnel change,” said one senior Conservative.
“There are MPs saying she simply cannot lead us through a general election and MPs are putting forward suggestions to Sir Graham Brady about rule changes.
“One scenario is that MPs decide a new PM and it’s not put to members.
“People are very anxious.”
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When I asked the MP if Ms Truss could survive until Christmas, they told me: “I think it’s probable that she will be gone by Easter.”
‘This plan is not going to work’
A former cabinet member also confirmed that colleagues were working up options to try to remove Ms Truss, as they whispered to me that they might now stand down at the next election in the face of almost certain defeat.
“This plan is not going to work,” they said.
For a new prime minister, who in typical times might expect a honeymoon period rather than the mutterings of divorce papers, such remarks are totally damning and speak to the extremely difficult predicament she now faces.
For, just as I’d never been to a more positive Labour Party conference than the one last week, I’ve never been to a Conservative one so shrouded not just in gloom about the electoral prospects of the party, but palpable anxiety about the Truss administration.
And this is about more than even the existential threat her policies could pose to the Conservative Party.
There is genuine fear too that she might “tank the economy”. As one former senior minister told me after the mini-budget: “It’s madness and I’m scared.”
Already MPs mutter that she will have to change – the policies and the personnel, or face a showdown with her party.
One MP told me there are easily 100 MPs who could rebel against her budget. The political toxicity of abolishing the top rate of tax for those earning over £150,000 a year, while mulling a real terms benefits cut for the four million at the bottom end of the income scale relying on universal credit, is plain to see for many MPs – even if Ms Truss wants to turn a blind eye.
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But it’s not just the politics of her mini-budget, it’s the economics of it.
“We can’t ignore the cost of borrowing line item,” is how one former minister puts it. “What are the fiscal rules?”
If the prime minister can’t prove to the country, the markets, the Office of Budget Responsibility, and her backbenches that her government can achieve 2.5% growth, then the tax measures will have to be funded through debt.
And that has an obvious knock-on effect for families, with those on average mortgages having to potentially pay more in higher mortgage costs than in tax cut gains.
All of it is causing acute anxiety for MPs as they look at the polls and the prospects of their own re-election.
Plenty of those in the Sunak camp are keeping quiet for now, telling me that they want to let this play out and don’t want to take aim at Truss publicly – yet. But two outriders – former cabinet ministers Michael Gove and Julian Smith – are saying publicly what many are saying privately.
This is Mr Gove on Sunday: “I think there are two specific concerns that I have about the unfunded nature of tax cuts and about the 45p tax cuts, which we now have an opportunity to reflect on.”
“And I think it would be wise for us to recognise that they are neither the right economic nor the right political response to the situation that we face at the moment,” he told journalist Christopher Hope at a Daily Telegraph event.
When he was asked whether the policy should be reversed, he didn’t blink: “Yes”.
‘We cannot clap for carers one month and cut tax for millionaires months later’
And this was former chief whip Julian Smith in response to chairman Jake Berry’s warning on Sky News’ Sophy Ridge on Sunday show that Tories who voted against the mini-budget would lose the whip: “The first job of an MP is to act in the interest of their constituents and in the national interest.
“We cannot clap for carers one month and cut tax for millionaires months later.”
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All of it appears to be falling on deaf ears, with the PM and her team adamant that her plan is the right one and the mistakes over the past week were about the communications strategy not the policies.
As one of her key allies put it to me: “The PM gets this past week has been disruptive,” but “she firmly believes her plan for the economy is the right one.
“We’ve been stuck in a world of high taxes, cheap credit, and low growth for too long, with too much focus on tax and spend at the expense of growth.
“That status quo isn’t working, so we have to change course, otherwise we’re consigning the economy and country to long-term decline.
“We’ll do that and manage the public finances responsibly.”
Pro-growth, pro-investment, low-tax. That’s the mantra.
‘There is still so much wastage across various parts of the system’
The PM’s cabinet and top team are also supporting her.
One senior minister pointed out to me on the eve of the conference that such a big change in approach – the biggest shift in economic approach for a generation or more – was “always going to shock the markets” but the principles of leaving more money with individuals and businesses was the right one, as were the efforts – and we’re going to see what this looks like in practice later this year – to cut back on government costs (read: spending).
“There is still so much wastage across various parts of the system,” they said.
But will this government even get that far?
Ms Truss has four days in Birmingham to try and sell her plan not just to her members and MPs, but to the country.
The problem she has is that so many people seem to have stopped listening already.
A PM not for turning and a parliament in which many MPs now think they have nothing more to lose. Strap in.
Canadian Prime Minister Justin Trudeau has announced his resignation.
The 53-year-old said he will step down as leader of the country’s ruling Liberal Party, which he has led since 2013.
He says it will allow his party to choose a new leader as he suspends parliament until March due to political deadlock.
Chrystia Freeland, seen on the day she quit as finance minister and deputy prime minister in December. Pic: Spencer Colby/The Canadian Press via AP
Follow live: Justin Trudeau announces resignation
Speaking to reporters in front of his residence at Rideau Cottage, in the country’s capital, Ottawa, he said “internal battles” mean that he “cannot be the best option” in the next election.
“I don’t easily back down faced with a fight, especially a very important one for our party and the country. But I do this job because the interests of Canadians and the well-being of democracy is something that I hold dear.
“A new prime minister and leader of the Liberal Party will carry its values and ideals into that next election. I am excited to see that process unfold in the months ahead.”
Former governor of the Bank of England, Mark Carney, is among the favourites to succeed him.
Chrystia Freeland, whose stunning resignation as finance minister and deputy prime minister precipitated the current crisis, leads in the polls.
Other front-runners are the former premier of British Columbia, Christy Clark, current finance minister Dominic LeBlanc and minister of foreign affairs, Melanie Joly.
Mr Trudeau, who has been prime minister since 2015, faced calls to quit from a chorus of his MPs amid poor showings in opinion polls.
He came under further pressure after Ms Freeland quit in December because of policy disagreements, including over how to handle possible US tariffs imposed by Donald Trump‘s incoming administration.
Justin Trudeau and Donald Trump in Italy in 2017. Pic: AP
Mr Trudeau’s resignation comes as the polls show his party is likely to suffer a heavy defeat to the official opposition Conservatives in an election that must be held by late October.
The Liberals must now name an interim leader to take over as prime minister ahead of a special leadership convention.
Mr Trudeau came to power 10 years ago following a decade of Conservative Party rule and was initially praised for returning the country to its liberal past.
But he has become deeply unpopular with voters in recent years over a range of issues, including the soaring cost of food and housing and surging immigration.
He is the eldest son of Pierre Trudeau, one of Canada’s most famous prime ministers, who led the country from 1968 to 1979 and from 1980 to 1984.
The political upheaval comes at a difficult moment for Canada internationally.
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US President-elect Donald Trump has threatened to impose 25% tariffs on all Canadian goods if Ottawa does not stem what Mr Trump calls a flow of migrants and drugs into the US.
Many fewer of each cross into the US from Canada than from Mexico, which Mr Trump has also threatened.
In a social media post on Christmas Day, Mr Trump even suggested the US could take control of Canada, as well as Greenland and the Panama Canal.
Canada is a major exporter of oil and natural gas to the US, which also relies on its northern neighbour for steel, aluminium and autos.
Canadian Prime Minister Justin Trudeau has announced his resignation.
The 53-year-old said he will step down as leader of the country’s ruling Liberal Party, which he has led since 2013.
He says it will allow his party to choose a new leader as he suspends parliament until March due to political deadlock.
Chrystia Freeland, seen on the day she quit as finance minister and deputy prime minister in December. Pic: Spencer Colby/The Canadian Press via AP
Follow live: Justin Trudeau announces resignation
Speaking to reporters in front of his residence at Rideau Cottage, in the country’s capital, Ottawa, he said “internal battles” mean that he “cannot be the best option” in the next election.
“I don’t easily back down faced with a fight, especially a very important one for our party and the country. But I do this job because the interests of Canadians and the well-being of democracy is something that I hold dear.
“A new prime minister and leader of the Liberal Party will carry its values and ideals into that next election. I am excited to see that process unfold in the months ahead.”
Mr Trudeau, who has been prime minister since 2015, faced calls to quit from a chorus of his MPs amid poor showings in opinion polls.
He came under further pressure after his finance minister, Chrystia Freeland, resigned in December over clashes on policy.
The disagreements included how to handle possible US tariffs imposed by Donald Trump‘s incoming administration.
Justin Trudeau and Donald Trump in Italy in 2017. Pic: AP
Mr Trudeau’s resignation comes as the polls show his party is likely to suffer a heavy defeat to the official opposition Conservatives in an election that must be held by late October.
The Liberals must now name an interim leader to take over as prime minister ahead of a special leadership convention.
Mr Trudeau came to power 10 years ago following a decade of Conservative Party rule and was initially praised for returning the country to its liberal past.
But he has become deeply unpopular with voters in recent years over a range of issues, including the soaring cost of food and housing and surging immigration.
He is the eldest son of Pierre Trudeau, one of Canada’s most famous prime ministers, who led the country from 1968 to 1979 and from 1980 to 1984.
The political upheaval comes at a difficult moment for Canada internationally.
Read more:
Former golden boy’s popularity in shreds
Zimbabwean migrants heading to South Africa
60m Americans under weather warnings
US President-elect Donald Trump has threatened to impose 25% tariffs on all Canadian goods if Ottawa does not stem what Mr Trump calls a flow of migrants and drugs into the US.
Many fewer of each cross into the US from Canada than from Mexico, which Mr Trump has also threatened.
In a social media post on Christmas Day, Mr Trump even suggested the US could take control of Canada, as well as Greenland and the Panama Canal.
Canada is a major exporter of oil and natural gas to the US, which also relies on its northern neighbour for steel, aluminium and autos.
Few one-time golden boys manage to retain their lustre long into political office.
Barack Obama just about held on to his, leaving the US presidency with his approval rating high despite his party’s 2016 loss to Donald Trump.
But Emmanuel Macron is faltering in France and Justin Trudeau steps down as head of Canada’s liberal party with his popularity in shreds. So much for Western liberal values.
In the high tides of inflation and immigration, those who were their supposed flag-bearers are no longer what electorates want.
Follow live: Justin Trudeau announces resignation
For Mr Trudeau, it is a dramatic reckoning. His approval ratings have dropped from 65% at their highest in September 2016 to 22% now, according to the “Trudeau Tracker” from Canada’s non-profit Angus Reid Institute.
The sudden departure of his finance minister and key political ally Chrystia Freeland last month dealt his leadership a body blow, just as Canada readies itself for a potential trade war with the US which, she argued in a bracing resignation letter, his government was not taking seriously enough.
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“Parliament has been paralysed for months,” Trudeau says
The man Mr Trump recently trolled as “Governor of the ‘Great State of Canada’ or ’51st (US) state'”, Mr Trudeau was as close to Canadian political royalty as it gets.
The son of the country’s 15th prime minister, Pierre Trudeau, he was famously toasted by US president Richard Nixon as “the future prime minister of Canada” when he joined his father on a state visit as a toddler.
Aged five, he met the late Queen for the first time. “Thank you for making me feel so old”, she remarked drily at a re-meet in Malta almost 40 years later.
He has led Canada’s liberal party since 2013 and served as the country’s 23rd prime minister for almost a decade.
Mr Trudeau won a resounding electoral victory in 2015 and secured the premiership through two subsequent elections, though as head of a minority government.
Mr Trudeau, his wife and children celebrate after he won the Federal Liberal leadership in 2013 in Ottawa. Pic: AP/The Canadian Press/Adrian Wyld
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He made significant inroads against poverty in Canada, worked hard on nation to nation reconciliation with Canada’s indigenous communities, secured an effective trade deal with the US and Mexico in 2016 and managed to keep the public mostly on-side through the COVID-19 pandemic.
But he was a polarising figure. Holidays in exotic climes like a trip to the Bahamas in 2016 to an island belonging to the Aga Khan made him seem elitist and out of touch.
There was embarrassment when blackface images surfaced from his early years as a teacher, for which he apologised profusely.
His supposed liberal credentials smacked of double standards when he invoked emergency powers to crush truckers’ protests in 2022.
But it was the economic aftermath of the pandemic, with Canada suffering an acute housing shortage, immigration leaping under his premiership and the cost of living hitting households across the board which really piled on the pressure.
In those, Canada is not unique. But the opposition conservatives and the public at large clearly want change, and Mr Trudeau has responded.
He has announced his intention to resign as party leader and prime minister after the Liberals selects their next leader.
Mr Trudeau’s legacy may shine brighter with a little hindsight. But now is not that moment.
The question is whether his conservative opposition will fare any better in an increasingly combative geopolitical environment if, as seems likely, a candidate of their choosing wins a federal election due at some point this year.
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