Liz Truss faces her cabinet today as she struggles to hold on after finally saying sorry for the disastrous mini-Budget.
The prime minister faces another brutal day as MPs consider whether and how to remove her in the wake of Jeremy Hunt’s extraordinary scrapping of her flagship economic plans.
After stubbornly failing to do so when she fired Kwasi Kwarteng on Friday, Ms Truss apologized late last night in a BBC interview for the debacle, admitting she had made ‘mistakes’ and gone ‘too much too fast’. A nervous-looking prime minister vowed to lead the party into the next election.
She gave a similar message to the One Nation group of MPs last night. But the Tories in attendance likened it to a “corpse giving its own eulogy.”
Senior backbencher Simon Hoare warned this morning that the side may need to focus on ‘avoiding a crushing defeat’, with polls giving Labor 36 points ahead.
Defense Secretary James Heappey insisted Ms Truss apologized sooner than Boris Johnson, but also signaled future problems as he warned against attempts to cut funding for the military.
After trying to appease her centrist MPs, Ms Truss will appear tonight before the right-wing ERG group – many of whom are angry that tax cuts have been dumped.
Much will depend on the point of view of the powerful 1922 chief Graham Brady, who met Mrs. Truss yesterday. There are suggestions that he wants to postpone any action until the budget on Halloween – when the Chancellor is expected to draft a nightmare menu of £40bn in cuts.
With the tax burden now set to rise to its highest level since 1950 and households facing £5,000 energy bills after the government announced that its two-year ‘guarantee’ will in fact expire in April, MPs are increasingly panicking at the prospect of voters will give their verdict.
Cabinet unions fear Liz Truss could be forced to leave if she fails to present convincing argument in the coming days as to why she should continue
Penny Mordaunt answers the Urgent Questions (UQ) session
Millions of Brits face ‘cliff-edge’ as experts warn average energy bill could rise to £5,000 from April
Millions of households will face a ‘cliff-edge’ of sky-high utility bills next year after Jeremy Hunt drastically cut the government’s support scheme from two years to six months.
The new chancellor said yesterday that the scheme, which aims to keep average annual household bills below £2,500 amid rising energy prices, will be replaced in April.
Instead, he promised “targeted aid” for the poorest families. However, analysts have warned that average bills for some households could double to more than £5,000.
Meanwhile, consumer champion Martin Lewis, using figures from Cornwall Insight, predicts energy bills will rise 73 percent in April to around £4,350 a year for an average household.
Last night, Mr Lewis, who founded the consumer site MoneySavingExpert, warned: ‘If these are in the right ballpark, the promised ‘targeted aid’ will have to target middle-income earners to help people through this. Especially if it stays at that level in the coming winter.’
Mr Hunt made his announcement amid the rollback of £32bn in tax cuts to reassure markets after the turmoil caused by last month’s ‘mini-budget’.
Warning of a possible return to austerity, he said the government would have to make “dazzlingly difficult” decisions to balance the books.
After new Chancellor Jeremy Hunt dismantled her tax cut plans, Liz Truss admitted she had gone “too far and too fast.”
“I want to take my responsibility and say sorry for the mistakes that have been made,” she told the BBC. “I expected it to be tough and it’s been tough, I think it’s fair to say.”
Previously, Mr Hunt used an extraordinary five-minute televised statement to cancel “almost all” of the Prime Minister’s flagship cuts in an effort to reassure financial markets that the government was serious about balancing the books.
He said his central responsibility was ‘to do what is necessary for economic stability’, adding: ‘We are a country that finances our promises and pays our debts.
“If that is called into question, as it has been, the government will make the tough decisions necessary to ensure there is confidence in our national finances.”
A source in Downing Street acknowledged that the prime minister had a ‘critical 24/48 hours’ to hold on to her job.
Hunt last night pleaded with the rebels not to risk further instability by ousting the prime minister and urged MPs to “give her a chance”.
Cabinet unions fear she could be forced to be expelled from the country if she fails to provide a compelling argument in the coming days as to why she should continue.
A senior Tory said: ‘She needs to show people that she has the capacity to get out of the mess she’s made – so far she’s a long way from that.’
Mr Hunt, who has been called ‘de facto prime minister’ by some Conservative MPs, warned that further ‘stunningly difficult’ tax increases and cuts totaling £40bn would be required by the end of this month.
And, in a major blow to millions of families and businesses, he said the two-year energy price “guarantee” would now last only six months.
Commons leader Penny Mordaunt denied that the prime minister was the victim of a “coup” when the chancellor tore her plans.
And she caused laughter in the House when she insisted Miss Truss wasn’t hiding “under a desk” to avoid scrutiny by MPs.
During a private meeting, Tory shopkeeper Sir Graham is said to have warned the Prime Minister that dozens of her MPs wanted her gone. But he is believed to be resisting pressure from backbenchers to change party rules that preclude a 12-month formal challenge.
Former Secretary of State Mark Garnier said Mrs Truss was “in office but not in power”, adding: “The question is: do we give her a chance or do we tear the plaster off?”
Sir Edward Leigh, who backed Mrs Truss for leadership, warned that scrapping her tax-cutting agenda could lead to the UK ‘sliding into a second-class economy’.
There is speculation that the prime minister could resign or be forced out after being in office for just over a month.
Some have argued that Rishi Sunak and Penny Mordaunt could strike a deal to seize power from their former leadership rival.
Sunak, who came second to Mrs. Truss in the Conservative leadership contest this summer, is said to have spoken to a major Mordaunt financier about a “tacit” suggestion that he could serve as her chancellor. The claims were rejected by Mr Sunak.
A source said: “Like everyone else, Rishi wanted the party to come together and is completely focused on his constituency.”
What has the Chancellor changed?
Jeremy Hunt abandoned the plan to cut the base rate by 1 pence from April.
When Rishi Sunak was in No11, he promised to lower the level in April 2024. That was put forward by Kwasi Kwarteng in his disastrous mini-Budget.
But is now being shelved ‘indefinitely’ in a bid to raise £5bn more for the Treasury.
The average household energy bill has been capped at £2,500 for the next two years.
The ‘guarantee policy’ is estimated to have cost the government more than £100 billion.
But that could now be revised, with aid targeting the poorest after April.
TAX FREE SHOPPING FOR TOURISTS
Relaxation of the IR35 RULES FOR SELF-EMPLOYEES
DIVIDEND TAX REDUCTION
Stamp duty was abolished under £250,000 at the Mini-Budget, with new buyers exempt up to £425,000.
That has already come into effect and Mr Hunt said it will remain in place.
The government promised to roll the increase back to the National Insurance.
Legislation has almost passed Parliament and Labor backs it.