Truss warns Tories not to retreat to 'status quo' after markets chaos

Truss warns Tories not to retreat to ‘status quo’ after markets meltdown: PM faces down rebels at party conference vowing to boost small business and childcare – as another disastrous poll shows Labour on track for a landslide

  • Liz Truss is kicking off Tory conference in Birmingham amid backlash over Budget causing market turmoil
  • Poll shows Labour 19 points ahead in latest grim signs for the Conservatives about the damage from chaos
  • The PM vows to stick to tax-cutting plans and warns that there is no option of sticking with the ‘status quo’ 

Liz Truss sounded defiance today she kicks off Tory conference warning restive MPs not to retreat to the ‘status quo’ after the markets meltdown.

The PM is launching the gathering in Birmingham against the backdrop of the Pound’s plunge and a surge in borrowing costs following Kwasi Kwarteng’s tax-cutting emergency Budget.

The Chancellor has suggested that in ‘hindsight’ he would have done things differently, with the lack of independent OBR costings and a plan for managing debt spooking traders.

But Ms Truss insisted there is no prospect of sacking Mr Kwarteng, and urged Conservatives to get behind her leadership – saying ‘the status quo isn’t an option’.

As part of the reforms, the definition of a small business is set to be increased from 250 employees to 500, reducing red tape for tens of thousands of firms. The government also wants to copy a French model to boost childcare. 

The grim political consequences of the market turmoil for the Tories was laid bare with an Opinium poll putting Labour on 46 per cent, 19 points ahead and enough for a landslide election win. Others have shown Keir Starmer’s party with an advantage of up to 33 points. 

Liz Truss is launching the gathering in Birmingham against the backdrop of the Pound’s plunge and a surge in borrowing costs following Kwasi Kwarteng’s tax-cutting emergency Budget

The grim political consequences of the market turmoil for the Tories was laid bare with an Opinium poll putting Labour on 46 per cent, 19 points ahead

Another poll has underlined the scale of damage to the Tories from the markets meltdown.  

Research by Opinium put Labour on 46 per cent, 19 points clear of the Conservatives on 27 per cent. 

On the issue of the economy the survey found a one-point lead for the Tories a week ago had become a 19-point advantage for Labour. 

It follows a tumultuous week which saw the pound slump to a record low against the dollar and the Bank of England step in to prevent the collapse of the pensions industry in the wake of Mr Kwarteng’s £45 billion package of unfunded tax cuts.

With some Tory MPs speculating that she might not last the until the end of the year, Sir Keir Starmer sought to seize on the discontent in the Conservative ranks, urging rebels to work with Labour to defeat the Government’s tax plans in the Commons.

But in an interview with The Sunday Telegraph, the Prime Minister said that although the Budget had been put together in a ‘hurry’ she was sticking to her guns, and tax cuts are essential to get the economy growing again.

‘Change is always something that people might find worrying. But what I’m fundamentally saying is we do have to change, and the status quo isn’t an option,’ she said.

‘We cannot continue on the current trajectory of managed decline… We must take a new direction.’

Mr Kwarteng admitted he been taken aback by the reaction of the financial markets to his mini-budget.

He told The Mail on Sunday that it had been put together at ‘very high speed’ because of the need to support people with their energy bills, but that he was ‘100 per cent convinced’ it was the right plan.

‘It’s very difficult to actually anticipate how markets react to anything and if politicians were really good at reading markets, I suggest they probably would be market traders,’ he said.

‘I think what we’re seeing now is more stability and I’m hopeful that we can build on that.’

Ms Truss disclosed that the first of the Government’s supply-side reforms, intended to support the growth plan, will be extending exemptions for small businesses from firms with up to 250 employees to those with up to 500.

She said the change would release an additional 40,000 firms from red tape and making it ‘easier for them to get on with their business’.

She is also working on the creation of new ‘childminder agencies’ under a French-style system to cut the cost of childcare.

But there are persistent reports of letters going in to the chairman of the backbench Conservative 1922 Committee, Sir Graham Brady, from Tory MPs calling for a vote of no confidence in her.

While under current rules she is protected from a leadership challenge for a year from her election, the 1922 executive has the power to change those rules should the demand for a contest become overwhelming.

Former Cabinet minister Michael Gove looks set to join criticism when he appears on the fringe of the conference this afternoon. 

Kwasi Kwarteng told The Mail on Sunday the Budget had been put together at ‘very high speed’ because of the need to support people with their energy bills, but that he was ‘100 per cent convinced’ it was the right plan

Ms Truss was all smiles as she arrived in Birmingham for Tory conference last night

A number of other senior figures – including Ms Truss’s defeated leadership rival Rishi Sunak and former cabinet ministers Priti Patel, Sajid Javid and David Davis – are staying away from the conference.

South Suffolk MP James Cartlidge has joined the attack, warning that reducing benefits while cutting taxes for top earners in a cost-of-living crisis was ‘unacceptable’.

‘This does not mean that, having lost market support for proposed unfunded tax measures, we try to win that support anew with on-the-back-foot, un-pitch-rolled cuts to benefits when the cost of food and staples is rocketing, whilst keeping a tax cut for the wealthiest,’ he tweeted.

However former foreign secretary Jeremy Hunt, who backed Rishi Sunak for the leadership, said that Ms Truss should be given a fair chance for her plan to work.

‘It obviously was a very wobbly week. But we have to let things settle down. And that I think will be the time to make judgments,’ he told GB News.

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