Liz Truss is already facing the possibility of crippling parliamentary rebellions over welfare, planning and a new wave of austerity, as MPs warn that No 10 has become “disconnected from reality”.
With some Conservatives in talks with Labour over how to block elements of the prime minister’s sweeping plans, senior Tories believe that Truss is now heading into the bruising parliamentary warfare that characterised Theresa May’s beleaguered premiership.
Some are even contemplating a serious move against Truss herself, with one former minister predicting the prime minister would struggle to make it to the end of November. However, a much larger number have indicated they are prepared to rebel to at least curb some of Truss’s plans.
The first battle could begin as soon as MPs return from the political conference season recess. A cross-party effort is being planned to force the publication of sensitive economic forecasts. Downing Street intends to keep them under wraps for weeks.
Both Labour and Tory sources said there were more than enough MPs willing to force publication of the documents from the Office for Budget Responsibility. The watchdog hands the government its forecasts on Friday, but ministers are planning to block their publication until Chancellor Kwasi Kwarteng’s medium-term fiscal plan at the end of November.
Rebels are already confident that the government does not have enough support to push through big spending cuts signalled by ministers to either Whitehall departments or the welfare system. The government’s plans imply that spending cuts worth between £37bn and £47bn will be required if Truss and Kwarteng continue to reject tax increases.
MPs’ anger has been further stoked this weekend after Simon Clarke, the levelling-up secretary and a key Truss ally, indicated that welfare would have to be cut and some projects cancelled to deal with debt. He said the west was living in a “fool’s paradise” of an unsustainably large welfare state. He told the Times that Whitehall departments would have to “trim the fat”. Meanwhile, Truss has made clear she wants to push ahead with the tax cuts, including the abolition of the top 45p rate.
The Observer understands that the main advocate of a tax cut for the highest earners was Andrew Griffith, who was Boris Johnson’s policy chief and is now financial secretary to the Treasury. Griffith, a former television executive whose five-storey Westminster home was used by Johnson to plan his premiership, is said to be drawing up a major deregulation package for the City. A Treasury spokesperson said: “We are fully committed to reforming the UK’s tax system to grow the whole economy, which is why we are abolishing the additional rate of income tax from April 2023 – as doing so boosts our global competitiveness by making the UK a more rewarding and attractive place for work and business enterprise.”
Few MPs have broken cover to speak out publicly against Truss. Many are waiting for the return to parliament for Truss to digest the level of opposition to her plans. “Downing Street are completely disconnected from reality,” said one MP planning to rebel.
“I’m dismayed by this story, and especially the worrying noises about who will bear the brunt of these cuts,” said one red wall Tory. “It is simply not fair to expect those most in need to pay for tax cuts for the wealthy.”
As well as concerns over spending cuts, there is also growing opposition to suggestions that Truss will relax planning laws and abolish the working time directive. Planning reforms had already been removed from legislation under Johnson’s government because officials were not sure that there was enough Tory support.
Key votes on Truss’s spending cuts may not come until late autumn or even the new year, but several influential MPs said that Truss would not be able to avoid a confrontation with her party. Another former minister said they could not see how Kwarteng’s economic plans could proceed in their current form: “If they don’t start listening to MPs and markets there will be a massive resignation to get Rishi [Sunak] in.”
However, some MPs are already concluding that Truss’s performance had proved so disastrous that they expect a move against her leadership. While Tory rules state that a new leader is protected from a confidence vote for a year, leading rebels point out that neither Johnson nor May was forced out in that way.
While Johnson was removed after the mass resignation of his ministers, May was persuaded to step down after being told there were enough Tory MPs willing to remove her if necessary.
In theory, the rules could also be suspended by the 1922 backbench committee. “They can just suspend rules as they threatened [to do] with Theresa and Boris,” said one former minister. “She is not protected, that is No 10 spin. She has to go. Bring back Boris.”
