ALLIES of Liz Truss have rallied around the Prime Minister after she came under intense pressure from her own MPs to abandon her economic plan.
This comes following a market backlash to the measures which has included multiple interventions from the Bank of England and International Monetary Fund (IMF).
The Tory leader endured a bruising appearance with her backbenchers on Wednesday evening.
At a stormy meeting of the backbench 1922 Committee in Westminster on Wednesday, Commons Education Committee chairman Robert Halfon told Truss she had “trashed the last 10 years of workers’ Conservatism”.
MPs piled pressure on Truss to restore market confidence, with reports suggesting she is facing mounting calls to reverse or delay the plan to cancel a rise in corporation tax from 19% to 25% due in April.
She has already abandoned plans to cut the 45p rate of income tax for top earners.
Addressing the group, Truss said small businesses would have faced “devastation” if the Government had not acted to cap energy prices, according to aides.
However, the Prime Minister was met with open criticism, with MPs reportedly raising concerns about soaring mortgage rates and the Tories’ slump in the polls.
One MP told Politico the Committee meeting was "unspeakably bleak" whilst one Conservative aide said Truss "doesn't seem to compute how bad the situation is".
Another MP told the Daily Mail's political editor: "It was like someone trying to light a fire using a magnifying glass. Using damp wood. In the dark."
Elsewhere, The Times' Geri Scott said on Twitter that one Tory MP told them it was the "worst 1922 I've ever been to" and that "with each tough question she looked like she’s had the wind knocked out of her."
The SNP have also piled pressure on Tory MPs to “put the economy first” and force Truss to abandon her budget.
Ian Blackford, the SNP’s Westminster leader, said the Prime Minister has “run out of time and credibility”.
He said: “Tory MPs must put the economy first and force her to change direction now – or show her the door. Another U-turn might be humiliating for Truss but the Tories will never be forgiven if they fail to act.
“It’s essential the U-turn comes immediately. With every day they delay, the Tories are inflicting more damage to household incomes as mortgages rise, pensions fall, and the UK economy flounders.
“Dithering until October 31 will only make the damage worse. This crisis has shown Westminster is a sinking ship.
“With the Tories and Labour both signed up to a hard Brexit and broken economics, Scotland’s only path to stability and prosperity is as an independent country – and independence is the only way to get rid of Westminster Tory governments for good.”
The Prime Minister and Chancellor are expected to meet with critical MPs from next week in an attempt to assure them Kwasi Kwarteng’s medium-term fiscal plan on October 31 will address their concerns.
Former Conservative minister David Davis called the mini budget a “maxi-shambles” whilst former deputy prime minister Damian Green said the party’s MPs were openly discussing reversing some of the mini-budget measures.
“It is indeed a topic of conversation around the tea rooms of the House of Commons as well, because we can all do the rough maths and see that it’s very difficult”, he told BBC Radio 4’s PM programme.
Since Kwarteng’s September 23 mini budget, the value of sterling has fluctuated dramatically.
Meanwhile, the editor of the influential ConservativeHome website, Paul Goodman, suggested there has already been plans about replacing Truss with a joint ticket involving her former leadership rivals Rishi Sunak and Penny Mordaunt.
However, Foreign Secretary James Cleverly told BBC Radio 4’s Today programme on Thursday: “We have got to recognise that we do need to bring certainty to the markets.
“I think changing the leadership would be a disastrously bad idea politically and also economically.
“We are absolutely going to stay focused on growing the economy.”
Cleverly declined to rule out further U-turns but insisted the Government will “absolutely stick” with its tax-cutting principles.
He told Sky News: “I think that it is absolutely right that we want to invest in businesses. It is absolutely right that we help them stay competitive, we help them stay afloat.
“We have got to make sure we can compete internationally with the other places businesses can choose to locate. We have got to make sure we are tax-competitive.”
Asked if the Government will stick with the policies of the mini-Budget, he said the “bulk” of it was the package to protect households and businesses from soaring energy costs.
It was also about “making sure that taxes for 30 million people were reduced a little bit and those are really strong principles” and “I think we should absolutely stick with those”.
Sky News’ deputy political editor Sam Coates said despite a “firm denial” from Downing Street that nothing would change, there are ongoing discussions behind the scenes about how to proceed.
Coates said: “There is a conversation going on inside government I understand about whether or not to junk some of the measures from the mini-Budget.
“Now we don’t yet know what they would be.”
He said there was a “real consciousness at the heart of government” that the current economic plan is not working.
Coates continued: “We understand at the heart of government they are looking again at some of those measures.
“One of the ideas I understand that some in government want to do is slightly return to what Liz Truss felt she had a mandate for from the leadership election.
“So that would be just looking at the things she campaigned on, now that would include freezing the corporation tax rise and keeping the national insurance reversal.
BREAKING: Discussions are underway in Downing Street over whether to reverse parts of the mini-budget, Sky News understands. Sky's deputy political editor @SamCoatesSky has the latest.https://t.co/WUnquWe61F 📺 Sky 501, Virgin 602, Freeview 233 and YouTube pic.twitter.com/nfhezFuD5O
— Sky News (@SkyNews) October 13, 2022
“If you remember the mini-Budget went quite a long way beyond that so potentially those things that weren’t discussed ahead of the leadership election will be particularly in the firing line.
“There’s a big, big question over timing, some sources suggesting something could happen sooner rather than later.
“But the Chancellor is in America potentially facing questions from journalists later today.
“It seems hard to imagine a U-turn happening while he’s out of the country. There does seem to be a shift with economic policy being decided a little bit more in Downing Street in recent days or a steer from the centre.
“Particularly we noted that over the decision to stop the appointment of Antonia Romeo, Kwasi Kwarteng’s choice of permanent secretary, chief civil servant in the Treasury and switching across to a civil servant ally of Liz Truss called James Bowler.
“So some signs of Downing Street asserting its authority over the Treasury but yes nervousness leading to discussions, no decisions made, no clarity on timing but this is all very, very active in government we understand.”
Veteran Tory backbencher Sir Christopher Chope insisted he has “absolute confidence” in the Prime Minister, telling Times Radio: “If I was a betting man I would now be going out and putting money on the Conservatives winning the next general election, not with a landslide but certainly with a good majority.”
The Government’s plans revolve around securing an increase in economic growth – with a target of an annual rise of around 2.5% in gross domestic product (GDP).
The forecasts presented by the Office for Budget Responsibility (OBR) alongside the Chancellor’s October 31 statement will give an assessment of whether that is viewed as a realistic ambition.
But Business Secretary Jacob Rees-Mogg has suggested the Government could ignore OBR forecasts accompanying the strategy if they predict low growth and rising debt.
He has also blamed the Bank of England for the turmoil in the value of sterling and the rising cost of Government borrowing, while former Tory leader Sir Iain Duncan Smith said Governor Andrew Bailey’s handling of the situation had been “stupid”.
Cleverly said “of course he is not stupid” but “it doesn’t mean we always agree with everything the Bank of England Governor says or does”
