Liz Truss goes into her first Conservative party conference with the latest Opinium polling giving Labour a 19-point-lead and her own approval ratings down at -37 – worse than Boris Johnson’s in his final days in office. Yet despite this, the new Prime Minister used her first big sit down interview since the fallout from the not-so-mini Budget to insist that she was not for turning. Truss told Laura Kuenssberg that she stands by all the measures announced last Friday – including abolishing the 45p rate of income tax for the highest earners.
The furthest Truss would go in accepting that her first fiscal event – which has spooked the markets, voters and many Tory MPs – had not gone to plan was to say she should have ‘laid the ground better’:
‘I will make sure in the future we will do a better job at laying the ground’
Truss’s interview also pointed to further turbulence ahead
Yet Truss insisted she would not row back on any part of it. She also revealed that the most controversial aspect of the package – the tax cut for the highest earners – was not even ran by her cabinet before it was announced. Instead, she said it was a decision made by her Chancellor Kwasi Kwarteng, which could be read as her passing responsibility on. In the panel discussion after the interview, Michael Gove said he was uncomfortable with it as it was a ‘display of the wrong values’ and suggested he could struggle to vote for it in its current form. This is a sentiment shared by many Tory MPs who are discussing ways to block it.
Truss’s interview also pointed to further turbulence ahead. The Prime Minister needs to explain in the coming weeks her plan to balance the books. There have been reports in the media and hints from her cabinet that this will involve mass spending cuts. When pressed on whether she would cut public spending, Truss refused to rule out further spending cuts four times:
‘I believe in getting value for money for the taxpayer. I’m very committed to making sure we have excellent frontline public services’
The implication is that cuts are coming. She also suggested benefits will not rise in line with inflation.
When it came to the wider economic picture, Truss once again tried to suggest that much of the turmoil – including rising mortgage rates – were down to global factors rather than her tax cuts. She told Kuenssberg that ‘there is an issue that interest rates are going up across the world’. However, she was then confronted with the fact that the chief economist at the Bank of England had said that there is ‘undoubtedly a UK specific component’ to the recent financial volatility.
Truss tried repeatedly to move the focus back to the big intervention she had taken on energy support, which is estimated to cost £60 billion in the first six months. Her argument was that she had no choice but to borrow to help struggling families through this winter. However, the optics are such that her unfunded tax cuts have distracted from this message – allowing Labour to depict it as a budget that benefits the rich.
The interview ended with Kuenssberg asking ‘who voted for your plans?’ – pointing to how the government’s message had changed since the 2019 election when the Tories ran on a higher spend message. Truss initially responded by asking ‘what do you mean?’ before insisting that 2019 Tory voters backed a country where every part was levelling up and that this is what she would still achieve. But if the economic picture remains gloomy and public spending cuts beckon, expect the number asking that question to grow.
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