As Liz Truss waited to take the stage at an event for northern MPs on the drinks reception circuit at the Conservative party conference on Sunday night, she was introduced enthusiastically as the “tax-cutting prime minister” by the party chair, Jake Berry.
Just over half an hour later, the prime minister set out her philosophy on taxes to the party faithful at a drinks party on the 25th floor of the upmarket Cube building in Birmingham. “Frankly, we haven’t made enough conservative arguments for the past few years,” she told them.
Tory members knocked back glasses of champagne and some compared her to Margaret Thatcher for doubling down so rigidly on her plan to cut the top 45p tax rate. Just over 12 hours earlier, Truss had insisted to the BBC’s Laura Kuenssberg she was standing her ground, prompting Michael Gove to go public with his criticism.
Shortly after the prime minister’s television appearance, Kwasi Kwarteng’s team sent out a preview of his conference speech in which he was due to say: “We must stay the course. I am confident our plan is the right one.”
But behind the scenes, conversations about a possible U-turn were already under way. As early as Friday, Truss and her No 10 team were calling round Tory MPs. She spoke to one former cabinet minister just as they were door-knocking constituents. “I told her I’d just been told how unfair it was that we were protecting the rich while my constituent was worried about paying their mortgage.”
Some MPs suspected something was up when the Tory whips failed to do their regular weekend ring-round to test the mood. “It seemed odd, especially after such a turbulent week,” said one. “But it also meant that they didn’t know if they had the numbers to get the policy through the Commons.”
Kwarteng, the chancellor, was also putting in the calls, including on Saturday to the former transport secretary Grant Shapps, well known for his spreadsheet that keeps a tally of the view of MPs. “It was clear that they wouldn’t have been able to get it through,” said Shapps, who the next day joined Gove in the rebellion.
Downing Street insiders said that Truss and her chancellor were in regular touch over the weekend, with calls ramping up on Sunday when it became clear the rebellion was growing. The prime minister also met with her chief whip, Wendy Morton, who warned her the parliament arithmetic did not stack up, as well as Sir Graham Brady, chair of the powerful backbench 1922 committee. By early evening, when Kwarteng briefly attended a business dinner, guests said his position was “a long way” from that of Truss on the television earlier. “Kwasi was a lot less certain about 45p than he had been previously,” one said.
He then had a quick dinner with senior journalists from the Sun newspaper at the Malmaison hotel, before being dropped back at the conference zone where at 10pm he joined Truss and their closest aides in her suite at the Hyatt hotel in Birmingham.
The mood was said to have been grim as the pair compared notes on their conversations with Tory MPs. They agreed to meet again after the prime minister’s drinks at the Cube, and reconvened at around 11pm just as damaging headlines on the Tory mutiny began to drop. They knew what they had to do: dump the policy immediately. It was agreed the chancellor would kill it off in his morning interviews.
News of the decision started to filter out shortly after, with late-night revellers in the Hyatt bar letting out little shrieks as they showed their phones to one another, and one minister seen rolling his eyes.
Downing Street aides were forced to work into the early hours of the morning to prepare for the 7am announcement, although several Treasury officials admitted the first they heard of the U-turn was when they woke up in the morning and saw the news.
The Treasury chief secretary, Chris Philp, was informed and while unhappy about being blamed for being the person behind the policy, was described by one source as a “Duracell bunny” for his performance on the morning round.
Cabinet ministers – who were frozen out of the original policy decision – were informed of the U-turn just minutes before Kwarteng issued a tweet saying “we get it, and we have listened” at 7.30am on Monday. Several said they believed it was the right decision. “I think we came into contact with the inevitable,” one said.
The chancellor obfuscated when he was asked on BBC Breakfast, LBC Radio and then the Today programme who had made the final decision. First, he said Truss had “decided not to proceed with the abolition” before, moments later, adding: “No, we talked together, I said this is what I was minded to do and we decided together.”
But many Tory MPs fear that, whoever made the final decision, it came too late. “The damage is already done,” said one. “We’ll always be the party that tried to cut taxes for the rich at the expense of the poor. It’s a long time until the next election, but this will stick.”
