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My most recent post on Liz Truss left off with the beginning of the end in her final week as Conservative Party leader.

Friday, October 14

Her sacking of Kwasi Kwarteng and installation of Jeremy Hunt as Chancellor on Friday, October 14, meant only one thing — her end was nigh:

Liz Truss’s first Chancellor Kwasi Kwarteng: what he expected, what he got instead (October 13, 14)

Liz Truss and Kwasi Kwarteng illustrate that one DAY is a long time in politics (October 13, 14)

The Times‘s headline on the morning of the 14th said that Conservative MPs were already plotting to install Rishi Sunak and Penny Mordaunt in Truss’s place. One of them would be Prime Minister and the other would be Chancellor or Foreign Secretary:

The article also said (purple emphases mine):

Truss and Kwasi Kwarteng, the chancellor, are expected within days to make a humiliating climbdown over corporation tax in an effort to calm the markets and see off a mounting revolt.

Indeed, that is what Truss announced at her disastrous press conference that afternoon. By then, Jeremy Hunt was already Chancellor:

It was hard to believe, especially as Ireland’s corporation tax is half that: 12.5%. What is to stop businesses in Northern Ireland from moving south of the border?

Liz prefaced the announcement with:

This is difficult.

Guido Fawkes has the video and another quote preceding her announcement about corporation tax:

It is clear that parts of our mini-Budget went further and faster than markets were expecting… so the way we are delivering has to change…

He concluded (emphases his):

The mother of all U-turns…

Later in the afternoon, Wendy Morton, the Chief Whip, summoned Conservative MPs to an online call with the Deputy Prime Minister Thérèse Coffey.

One hundred of them dialled in. Coffey allegedly kept staring at her notes:

Saturday, October 15

Saturday’s papers were scathing.

The Daily Mail asked, ‘How much more can she (and the rest of us) take?’

The i paper led with ‘Tory MPs tell Truss: “It’s over”‘:

The Telegraph‘s Tom Harris wrote about the symbiotic relationship between the Prime Minister and the Chancellor from Margaret Thatcher’s time to Truss’s.

When that relationship goes wrong in a big way, it’s nearly always bad news for the PM, although there are exceptions:

When a prime minister loses a long-serving chancellor and ally – as Margaret Thatcher did when Nigel Lawson walked out of her government in 1989 – the political ramifications are enormous. In Thatcher’s case, that event signalled the beginning of her long defeat. When a prime minister loses a friend too, it becomes, as Liz Truss stated in her press conference, “not an easy” personal moment. 

Their closeness also makes it impossible for Truss to distance herself from the mess left at the Treasury. It is not clear which policy Kwarteng implemented that the prime minister was so unhappy with that she had to fire him. In 1989, Lawson resigned over his objection to the prime minister’s reliance on her economic adviser, Sir Alan Walters, but there were already disagreements between Numbers 10 and 11 over whether Britain should join the European Exchange Rate Mechanism. 

[John Major’s Norman] Lamont was fired over his handling of Britain’s departure from the same institution. Javid resigned over personnel issues. Rishi Sunak’s reasons for resigning were similar, though in his case the personnel issue involved the then prime minister himself.

In Jeremy Hunt, Liz Truss might be given a chance to form the kind of reassuring, mutually supportive – and, crucially, stable – relationship with her chancellor that good government demands. It would be foolish, however, to assume that when such a relationship breaks down, it is always the chancellor who is next to go.

The Telegraph‘s Camilla Tominey looked at the backbench Conservative MPs, wondering how Conservative they actually were. I was glad to see that she mentioned Alicia Kearns, who does not seem very Conservative to me.

Tominey’s article shows that a significant number of Conservative backbenchers do not hold traditional Conservative Party values:

Never underestimate the Conservative Party’s unparalleled ability to turn the gun on itself when coming under enemy fire. As the pot shots continued to rain thick and fast on Liz Truss’s troubled premiership, what did the Tories decide to do? With Labour’s help, they elected Alicia Kearns as chair of the Foreign Affairs Select Committee.

For those unfamiliar with Ms Kearns, she is the former Amnesty International activist who led the so-called “Pork Pie Plot” to oust Boris Johnson over partygate. Despite having been an MP for all of five minutes, the 34-year-old, who won the safe seat of Rutland and Melton in 2019 (hence the pork pie theme) decided that the Conservatives’ wisest move was to remove the man who secured the party’s biggest election win since 1987. Well, dip me in jellied pork stock and cover me in hot-crust pastry, that went swimmingly!

Having declared last year that she came into Parliament with “one legislative change I wanted to deliver, which was to ban conversion therapy”, inexperienced Kearns now occupies one of the most influential posts in the House of Commons.

Her first intervention? Following hot on the heels of her fellow chair, Mel Stride, of outspoken Treasury select committee fame, she used a radio interview on Thursday night to urge the Prime Minister to reverse the tax-cutting measures in the mini-Budget.

I’ve got nothing personally against Ms Kearns – she is clearly a thoughtful and intelligent woman. But if she isn’t for cutting tax, then what on earth is she doing in the Tory party, let alone now apparently in the running to enter a future Conservative Cabinet?

One former minister was this week quoted as saying: “Everything [the Government] are doing is everything that I don’t believe in.” Why, then, is that senior politician – apparently so opposed to spending controls and economic growth – not currently residing on Sir Keir Starmer’s shadow front bench or drinking Remaineraid with Sir Ed Davey?

As former Brexit negotiator Lord Frost put it on Thursday: “There are too many … social democrats operating under Conservative cover.”

It is one thing to be a broad church, but the Tories are currently taking on the mantle of a Blue Labour cult.

Not only are many of them perfectly comfortable with taxing people more, despite the tax burden being at its highest in 70 years, but they are also apparently as opposed to fracking as Ed Miliband. They seem to love the status quo and appear happy to watch Britain slowly sink into decline – along with their own party.

Tominey says that Liz Truss’s platform was clasically Conservative, and so was the one upon which Alicia Kearns was elected.

These are the MPs who will determine the outcome of Brexit and the next election. Both are in peril.

Tominey rightly lays the blame at the feet of former PM David Cameron, a wet who wanted a different type of Conservative MP:

David Cameron’s decision to introduce open primaries in the late 2000s, which saw wannabe MPs selected by non-members as well as members, was perhaps the most obvious mistake. The Conservatives ended up with “yellow” Tories in its ranks, such as Sarah Wollaston, who later defected to the Liberal Democrats.

Funnily enough, Sarah Wollaston is no longer an MP. Others like her, most of whom had the whip removed, were defeated or chose not to run in 2019.

This is the issue:

But more broadly, by inviting people with no background in Conservative politics to stand for Parliament, they ended up with people with no Tory backbone either. Holding successive snap elections only made the selection process less rigorous and open to people high on ambition and low on ideology.

This is a problem for the next general election. GEs depend upon local activists — party members — who are willing to canvass door-to-door:

We now have the Sunak squadders, calling for people to keep less of their wages, for businesses to pay more in corporation tax and for benefits to be linked to inflation, Corbyn-style …

Conservatives have become so detached from reality that they actually believe this will help them to win the next general election – even though it promises to prompt a mass walkout by the very grass-roots activists they rely on to run a campaign.

However, Tominey says that Rishi Sunak’s coronavirus handouts have also altered the public perception of the role of the state. We can but see how this will play in 2024 or early 2025 when the next GE comes along.

Monday, October 17

On Monday, October 17, Leader of the House Penny Mordaunt had to stand in for Truss during a debate. Opposition MPs accused Truss of hiding under a desk.

Mordaunt had to deny that more than once, saying that Truss had a ‘very genuine reason’ for not being present.

I don’t often feel sorry for Penny Mordaunt, but I did that day:

However, one Labour MP, Andrew Gwynne, tweeted that Liz Truss was the victim of a ‘coup’ — his word — and that Jeremy Hunt was the acting PM:

https://image.vuukle.com/f6a3e1ae-5984-48dd-8fe4-cb0a5368b71b-404bcb3a-bd15-43df-b0b6-f4920edde5c7

On Tuesday, October 18, The Times explained why Truss did not turn up at the despatch box the day before:

For much of the day Truss was conspicuous by her absence. She refused to respond to a question by Sir Keir Starmer in the Commons, prompting accusations from Labour that she was “frit”. Penny Mordaunt, the leader of the Commons, answered questions in her stead. She said that the prime minister had “a very good reason” for her absence but refused to explain further, prompting misplaced speculation that Truss had resigned.

That reason for her absence turned out to be a meeting with Sir Graham Brady, the chairman of the backbench 1922 Committee. Sources said that the meeting was routine and had been arranged before Kwarteng’s dismissal. But the issue of her leadership, and a potential revolt by Tory MPs, was said to have been discussed.

One source on the committee said there were a “number of views” on the way ahead but that there were concerns that an immediate move to defenestrate the prime minister could further destabilise the markets.

“The question is whether it is more damaging to create further uncertainty by getting rid of the prime minister when the chancellor [Hunt] appears to have settled the markets,” said an MP on the committee.

Some Tory MPs believe that with the unravelling of her tax-cutting agenda and signature energy policy she is finished politically. Sir Charles Walker became the fifth Conservative MP to publicly call for her to go, saying her position was “untenable”.

A senior Conservative source added: “It’s the biggest unforced humiliation for a British government since Suez. Eden did the decent thing and resigned.”

“The trouble is there is no consensus for who should replace her,” said one former backer of Rishi Sunak. “And the last thing we need now is to be seen to be causing more uncertainty on the financial markets.”

Monday night was grim.

On the subject of a coup, Nigel Farage agreed that Jeremy Hunt was in charge, and that this was a ‘globalist coup’:

https://image.vuukle.com/f9d07d03-d334-4051-8724-6f4fa2ddda17-ae8bf94e-7f5a-4ffd-9a52-0e6022d7356a

On his GB News show that night, Dan Wootton also said that there had been a coup. He agreed that the unpopular Hunt was in charge and that no one liked him, except for the Establishment. He said that if the Conservatives allowed this to continue, then they deserve to lose the next GE:

https://image.vuukle.com/f6a3e1ae-5984-48dd-8fe4-cb0a5368b71b-8e6e7a67-592c-457b-b72e-c0ac239a343b

Truss surfaced to give an interview to the BBC’s Chris Mason, wherein she apologised for the mini-budget. She said:

First of all, I do want to accept responsibility and say sorry for the mistakes that have been made. I wanted to act, to help people with their energy bills, to deal with the issue of high taxes, but we went too far and too fast. I have acknowledged that.

Tuesday, October 18

Tuesday’s headlines were deeply discouraging for her. Nearly all had photos of her alongside Hunt:

The new biography of Truss, Out of the Blue, was not even ready for publication. Someone photoshopped the cover with a remainder sticker on it, saying, ‘Reduced for quick sale — please just take it’:

https://image.vuukle.com/98cdcb40-7d3c-4d74-8d23-f9daebdfd1a1-93607ebf-9abe-4f09-a639-03c36aff8641

The Sun‘s political editor, Harry Cole, one of the book’s co-authors, posted an article about the MPs plotting against her:

TORY plotters dubbed the “Balti Bandits” carved up Liz Truss’s future last night over a korma and bhuna feast, The Sun reveals.

Leading rebel Mel Stride hosted more than a dozen “miserable” Conservative MPs in his large House of Commons office for an Indian takeaway – with the PM’s fate also on the table.

Ex-Ministers John Glen, Nick Gibb, Mark Garnier and Shailesh Vara tucked into “lashings of curry and naan” ordered in by Mr Stride, alongside outspoken backbencher Simon Hoare. 

2019 intake MPs Angela Richardson and Simon Baynes were also said to have joined the “poppadum plot” – but sources say the meeting ended with “no credible solution” to their woes

Contenders include ex-Chancellor Rishi Sunak, Defence Secretary Ben Wallace, new Chancellor Jeremy Hunt and Commons Leader Penny Mordaunt – but given the party is deeply split, the plotters admitted the chances of a rapid “coronation” of a new PM were “almost zero.”

One attendee told The Sun: “the vast majority of attendees were Rishi Sunak supporters, but there were Penny people too. It was not a Rishi thing.” 

On Tuesday evening, Truss had another group angry with her — her own supporters in the European Research Group, the pro-Brexit group of backbench Conservative MPs.

The Telegraph‘s Tim Stanley wrote about it, as he was there in the corridor for Truss’s meeting with them:

Liz Truss launched her fightback at 6pm in Committee Room 11. The meeting was actually set for 5pm; Commons voting ran late so Mark Francois advised us hacks to go away and come back later, but I hung around on the suspicion that the moment we left, Liz would slip out of her hiding place in the roof of the lift and jog, unseen, into the Room …

These are the true believers: if they’re angry at Liz for anything, it’s for not keeping the mini-Budget

What we saw of her on TV on Monday night, interviewed by Chris Mason, did not spark confidence as she uttered that dread word “sorry”, thus accepting personal responsibility for blunders past and future. It is the mark of an “honest politician”, she said, to admit mistakes. That’s true, but it’s also a dead giveaway for a not-very-good one, trying to turn a repeated error into a display of moral virtue. As Samuel Johnson might have said, “Honesty is the last refuge of the incompetent”.

She bobbed into view in a dark blue dress and black tights – fresh-faced, one suspects, from a good night’s sleep. Instinctively, I stood: she might be a PM, but she’s still a lady. I earnt a cheeky nod. Those who can’t fathom the rise of Ms Truss haven’t met her. She has a way of compromising you, of making you think you’re on her side, and it’s the most fun side of the room to be on.

The ERG roared as she entered. She entertained them behind a closed door for about 45 minutes. Then she left, followed by Mr Francois who told us it was “a very positive meeting”.

The PM evidently spoke about Northern Ireland and her commitment to raising defence spending by the end of the decade, which is ambitious for a woman who could be out of office by Friday. And he noted that David Canzini, the clever political operative, was with her, an eminence so grise, none of us had noticed he’d gone in.

No 10 confirmed it: he was hired as of that morning.

Too little too late. That might have been Canzini’s shortest job.

Wednesday, October 19

On Wednesday, October 19, Guido Fawkes posted that the Reform Party — formerly the Brexit Party — was climbing in the polls. The photo shows their chairman, businessman Richard Tice:

Guido’s post said, in part:

Guido can reveal that in the 48 hours before close of play yesterday afternoon, the old Brexit Party received almost 1000 new £25 membership sign-ups. That new five-figure cash boost was joined by 300 members registering a new interest in standing as a party candidate at the next election. The first time the Tories dipped below Labour in the polls – September 2021 – Reform saw one in 10 Tory voters switching to them. Can they continue capitalising on Liz’s woes?

It’s not just Reform benefitting from the dire state of No. 10. Last night the LibDems revealed five new donors, each giving £50,000 to the party, one of whom is a former Tory donor. While the last 36 hours have been calmer for Truss, it does feel like the ship has sprung one too many leaks to be repaired by a strong PMQs performance…

Wednesday was another fateful day. Home Secretary Suella Braverman resigned, then a confusing scene took place in the voting lobby over a division (vote) on fracking, which resulted in more chaos when it was unclear whether Wendy Morton had resigned as Chief Whip:

Liz Truss’s final 24 hours: Suella Braverman’s resignation, question over Whips’ resignations (October 19)

Truss appointed Grant Shapps, former Transport Secretary, in Braverman’s place:

Holy mole, guacamole!

Nigel Farage repeated ‘coup’ in his tweet about the news:

As with Hunt, Truss had to scrape the barrel.

The Telegraph reported that, like Hunt, Shapps was not a Truss supporter:

It is a remarkable turnaround for Mr Shapps, the transport secretary under Boris Johnson who went on to become a prominent supporter of Ms Truss’s leadership rival Rishi Sunak.

Only on Monday night, Mr Shapps was telling a theatre audience that he believed Ms Truss had a “Mount Everest to climb” to remain in power.

“I don’t think there’s any secret she has a mountain, a Mount Everest to climb,” he told Matt Forde’s podcast. “What she needs to do is like threading the eye of a needle with the lights off.”

Now he is one of her most senior ministers – and another example of the way a weakened Ms Truss is being forced to offer olive branches to the Sunak supporters she had previously shunned.

Not only was Mr Shapps questioning her chances of success until as early as this week – he was working proactively to get rid of her.

Mr Shapps has been viewed in Westminster as one of the leaders of the opposition to Truss’s libertarian policies.

He spoke up at the Tory party conference in Birmingham earlier this month against her plans to scrap the 45p rate of income tax, and warned that Ms Truss had “10 days” to turn things around or MPs “might as well roll the dice and elect a new leader”.

This is what the aforementioned Camilla Tominey was lamenting in Conservative MPs. Some of the recent ones have no appreciation of or allegiance to Conservative values. Shapps was a Cameronian MP.

The article also discussed Shapps’s famous spreadsheets which appear to work as well as the 1922 Committee in making or breaking a Prime Minister:

The veteran MP – known by some as the “Duracell Bunny” for his enthusiasm – is also well-known for his “Star Wars” spreadsheet, with which he has spent the past few weeks recording the views of MPs on Ms Truss and her plans.

Mr Shapps used an earlier version of his famous spreadsheet to lead a rebellion against Theresa May, and also utilised its information to help guide Boris Johnson into Downing Street.

The spreadsheet is said to contain more than 6,000 historical “data points” from previous conversations with MPs.

It was rumoured that he had been in contact with Mr Johnson and Mr Sunak to see if they would join an effort to oust Ms Truss. And some rebel MPs claimed he had even offered himself up as a caretaker prime minister.

Let us not forget that Shapps himself is hardly a paragon of virtue:

… unfortunately for Mr Shapps, some elements of his past may make a shot at No 10 less than likely – not least the Michael Green saga.

This was an alter-ego he employed to enable him to run a series of get-rich-quick schemes on the internet while he was an MP.

Mr Shapps originally denied he had a second job, and threatened legal action against a constituent who said he had. But he was forced to admit practising business under a pseudonym in March 2015.

All this happened while he was Tory chairman, in charge of David Cameron’s efforts to win the 2015 election.

He was demoted soon after to aid minister, and resigned from that role after claims he had ignored repeated allegations of bullying involving the Tories’ youth organiser. It was said the alleged bullying, which took place on the party’s RoadTrip 2015 campaign, may have caused one party member to commit suicide.

On Wednesday evening, Camilla Tominey reprised her warning about un-Conservative MPs and their takeover of the Government. She, too, used the word ‘coup’:

the departure of Suella Braverman as home secretary speaks to a bigger problem for Liz Truss than sheer optics.

In sacking two key allies on the Right, only for them to be replaced by opponents more to the Left of the party, the Prime Minister is increasingly looking like the victim of a Conservative coup.

It is certainly ironic that the former home secretary, in post for just 43 days, first used that word to describe those who plotted against Ms Truss’s original plan to link benefit to wages rather than inflation

With that, and most of her mini-Budget up in flames thanks to a rebellion by the moderates, Jeremy Hunt now appears to be the de facto Prime Minister.

He will now be joined by his fellow Sunakite Grant Shapps, who despite being rejected from Ms Truss’s original cabinet, has now been appointed to replace Mrs Braverman at the Home Office.

Braverman, at one point, had headed the aforementioned European Research Group:

her swift exit from one of the highest posts in public office will anger her European Research Group supporters.

It was only on Tuesday evening that Ms Truss was said to have charmed the backbench group of Eurosceptics with her honest, straight-talking approach.

They are unlikely to take kindly to their former chairman, a darling of the grassroots, being ejected in such unseemly fashion.

Mrs Braverman, a Conservative leadership candidate herself over the summer, received the longest standing ovation at the Tory Party conference two weeks ago.

Fortunately, Rishi Sunak re-appointed Braverman as Home Secretary. He probably realised he had to, in order to keep Party members on side.

Returning to Wednesday, October 19, The Telegraph posted an article stating that Conservative backbenchers were asking Labour for help in ousting Truss. Unbelievable:

Rebel Tories have been asking Labour MPs to help them overthrow Liz Truss, The Telegraph has been told.

Conservative backbenchers are growing increasingly frustrated with the Prime Minister’s leadership, but currently lack any mechanisms to remove her given the one-year immunity she has from a no confidence vote.

As things stand, the only way to oust Ms Truss would be to change the rules – which is a decision that only the executive of the 1922 committee of backbenchers can make – or if she resigns of her own volition.

One Labour MP told The Telegraph: “Tories are speaking to us saying ‘this is a complete nightmare and there is no way out’. We are being asked ‘can’t you do something about her?’”

The MP, who said their colleagues have reported similar experiences, said they were approached by one Red Wall MP whose constituency was in the north and another MP who is a member of the One Nation group of moderates …

A Labour source said: “There is very little Labour can do. Even a vote of no confidence doesn’t have the constitutional standing that it used to. The Tory party are the ones that elected her, they need to get rid of her.”

The paper’s Michael Deacon wrote that Conservative MPs were entirely to blame for the mess. Furthermore, he said, they risked angering Party members, the campaigning activists, if they pushed ahead with a rule change saying that the members would no longer be able to vote for future Party leaders. The members elected Truss over Sunak in August:

This week, The Telegraph reported that Tory MPs want to bar members from voting in future leadership elections. Supposedly the reason is to speed up the process of choosing a leader. But this is blatantly a smokescreen. Quite plainly, MPs just want to prevent the members from landing them with another turkey like Truss.

Many members are appalled by this suggestion. And so they should be. Such a plan is not just arrogant and undemocratic, it’s delusional. Because party members aren’t to blame for the current mess.

Tory MPs are.

After all, who put Truss on the ballot paper in the first place? Tory MPs. No fewer than 113 of them, in fact. A third of the parliamentary party. Out of an initial field of 11 candidates for the leadership, Truss was the MPs’ second favourite.

Unlike the MPs, however, the party members weren’t allowed to choose between the initial field of 11. If they had been, it’s extremely unlikely that they would have chosen Truss. They’d have been far more likely to choose Penny Mordaunt or Kemi Badenoch, to name just two. In fact, if the MPs had deigned to ask them, I suspect that the greatest number of members would have wanted their leader to be Boris Johnson – the person they chose to be leader in the first place.

The truth is, the members voted for Truss simply because they didn’t want to vote for Rishi Sunak. In leadership contests, they’re only ever given two candidates to choose from. And why? Because Tory MPs don’t trust them. They fear that, if presented with a wide-open field, party members will choose the “wrong” candidate. Funny how things turn out.

All things considered, then, it seems clear that, if anyone should be barred from voting in leadership contests, it should be Tory MPs. In future, just leave it to the wiser judgment of the members instead.

That night, The Telegraph posted an article by Lord Frost saying that the Party was moving towards a status quo, if not anti-Brexit, stance, going all the way back to David Cameron’s time as Prime Minister, with George Osborne as Chancellor and Philip Hammond in the same post under Theresa May:

… the Government is implementing neither the programme Liz Truss originally advocated nor the 2019 manifesto. It is going in a completely different direction. We are back to Osbornomics, the continuity Hammond view of the world. There is no shred of a mandate for this. It’s only happening because the Truss Government messed things up more badly than anyone could have imagined, and enabled a hostile takeover by its opponents …

… the correct account of the past few weeks is the simplest. Truss tried to deliver worthwhile reforms and set the country onto a much-needed new direction. I supported this policy direction and still do. But it was rushed and bungled. The markets were spooked. The mistakes were opportunistically seized on by her opponents to undermine her leadership, to blame Brexit, and to stop the party getting out of the social democratic tractor beam of the past few years. And now, under pressure, the Prime Minister has reversed tack completely.

The risk now is that we lose for a generation the opportunity to do anything better. Every time the PM defends her approach, she denounces the policies on which she was chosen. The danger is that necessary and correct reforms are discredited.

Frost held that Truss was ultimately responsible for her own downfall.

As such, she had to go:

We are where we are. I am very sorry about it, because I had such high hopes. Whatever happens to her ministers or the stability of the Government in the next few days, Truss just can’t stay in office for one very obvious reason: she campaigned against the policies she is now implementing. However masterfully she now implements them – and it doesn’t seem that it will be very masterfully – it just won’t do. She said she wouldn’t U-turn, and then she did. Her fate is to be the Henry VI of modern politics – a weak figurehead, unable to control the forces around her, occasionally humiliated, and disposed of when she has become inconvenient. Better to go now.

As for her successor and the Party:

Then the party must do two things: avoid making the economic situation even worse by repeating the policies of the Cameron government in totally different circumstances; and recover some political legitimacy for carrying on – because in our system legitimacy does matter.

Thursday, October 20

After 44 days, Liz Truss resigned as Conservative Party leader on Thursday, October 20.

She served as Prime Minister for 50 days, beating George Canning’s record of 118 days. Also a Conservative, he died of tuberculosis in 1827.

She remained PM until Rishi Sunak succeeded her:

Liz Truss’s final 24 hours: Suella Braverman’s resignation, question over Whips’ resignations (October 19)

Liz Truss’s final 24 hours: fallout over Braverman and Morton, no tears in exit speech (October 19, 20)

Rishi Sunak becomes Prime Minister: a momentous morning of historic significance (October 24, 25)

How Rishi Sunak won the Conservative Party leadership contest — part 1 (October 20, 21, 25)

How Rishi Sunak won the Conservative Party leadership contest — part 2 (October 21, 26, 27)

How Rishi Sunak won the Conservative Party leadership contest — part 3 (October 22-24, 27, 28)

On Thursday morning, The Telegraph posted a Planet Normal podcast in which Lord Frost said he could see Brexit being reversed:

In the wide-ranging discussion, Lord Frost also said that he could see a future where Brexit is reversed. 

“Brexit was about giving us the power to do things ourselves and to give responsibility back to British ministers, British governments. And they’ve shown that many of them are not up to the job in the last year or two.”

“I can easily see a situation where Keir Starmer gets in. We drift back closer into the single market and go back into the Customs Union. And then everyone says why are we in these things where we don’t get a say in them? Wouldn’t it be better to be a member? So I can easily see how it could happen. And the way you stop it happening is to prove, while we have the levers of power, that we can do things differently and better. And at the moment we’re not making a very good job of that, unfortunately.”

Little did Truss know that, the day before, she had stood at the despatch box for her last PMQs:

She resigned early on Thursday afternoon. Thankfully, she didn’t cry, unlike Theresa May, who broke down at the podium (Guido has the video):

Sterling began surging the second Truss finished her announcement:

In less than 24 hours, the Conservative Party website deleted her presence from their home page (Guido has the before and after screenshots):

It was a sad ending to a sad episode of British parliamentary history.

Next week, I will look at who, besides Truss herself, was also responsible for it.

Truss is currently spending time in her own constituency and has not yet appeared on the backbenches, an alien place for someone who had been a minister of state for most of her career.

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My most recent post on Liz Truss examined her first two weeks in office as Conservative Party leader and Prime Minister, from September 6th through the 16th.

Things had started out so well. Ironically, Jeremy Hunt, who is now Chancellor, told ITV’s political editor Robert Peston on September 7 that Truss would be ‘formidable’. An amazing endorsement from someone who was her natural ally:

Hmm. Did he know anything at that point? We’ll probably never know.

On September 20, The Sun‘s political editor Harry Cole was delighted to announce his and James Heale’s book on Truss, Out of the Blue, which later had to have hastily written chapters added to it:

Yes, it is still coming out by Christmas — November 24, to be precise:

King Charles and COP27

Liz saw King Charles on Sunday, September 18, the day before the Queen’s funeral. It was not their usual day to meet, but the Royal Family went into private mourning until the end of September:

On Saturday, October 1, The Times reported that Liz had asked the King not to attend COP27, which ran between November 6 and 18, despite an invitation from the organisers.

This was a good move, in my opinion, as climate change, or whatever it’s being called this week, has turned highly political.

The article said (emphases mine):

The King, a passionate environmental campaigner, has abandoned plans to attend next month’s Cop27 climate change summit after Liz Truss told him to stay away.

He had intended to deliver a speech at the meeting of world leaders in Egypt.

Had she remained PM, Liz would not have attended, either:

Truss, who is also unlikely to attend the Sharm el-Sheikh gathering, objected to the King’s plans during a personal audience at Buckingham Palace last month.

There were no hard feelings between the Palace and No. 10:

… a Downing Street source claimed the audience had been cordial and there had “not been a row”.

No doubt he was expecting it:

A senior royal source said: “It is no mystery that the King was invited to go there. He had to think very carefully about what steps to take for his first overseas tour, and he is not going to be attending Cop.”

They said the decision was made on the government’s advice and was “entirely in the spirit of being ever-mindful as King that he acts on government advice”.

In the end, the King held a reception at Buckingham Palace for world leaders before they flew to the summit. In light of that, this was rather interesting:

Charles is still determined to make his presence felt there, and how he will do that is “under active discussion”. A senior royal source said: “Just because he is not in physical attendance, that doesn’t mean His Majesty won’t find other ways to support it.”

A source who knows Charles said he would be “personally disappointed” to miss it and was “all lined up to go”, with several engagements planned around his Sustainable Markets Initiative (SMI) which aims to persuade businesses to invest in environmentally friendly initiatives.

Public v parliamentary opinion

In late September, a poll showed that Truss was ahead of Labour’s Keir Starmer in Red Wall seats, boosting the Conservatives by eight points:

Admittedly, that was before Kwasi Kwarteng’s fiscal event, or mini-budget, of Friday, September 23.

That said, I will go out on a limb and say that most conservative voters thought that Kwarteng’s — Truss’s — plan was the right one. My better half and I thought it was refreshingly libertarian.

However, Conservative MPs vehemently disagreed with the public and started writing in to Sir Graham Brady, the chairman of the 1922 Committee, the all-powerful group that Margaret Thatcher dubbed ‘the men in grey suits’.

On September 26, the Northern Echo reported:

A former Tory minister MP has told Sky News the new Prime Minister is “f*****” and the party are already looking to bring her down following Friday’s mini-budget.

The MP said: “They are already putting letters in as they think she will crash the economy. The tax cuts don’t matter as all noise anyway – mainly reversing back to the status quo this year …

Another Tory MP told the broadcaster that Friday’s announcement – which included reversing a 1.25% hike in National Insurance – had been a “s***show”.

Note that MPs were siding with the Bank of England. Very establishmentarian of them:

“The issue is government fiscal policy is opposite to Bank of England monetary policy – so they are fighting each other. What Kwasi [Kwarteng] gives, the Bank takes away.”

The mood among Conservative ‘wets’, to borrow Thatcher’s name for such weaklings, only escalated.

At Liz’s one — and only — appearance before the 1922 Committee on Thursday, October 13, Robert Halfon, a wet, told Truss she had ‘trashed the past ten years’.

The Times had the story:

Liz Truss was accused by a senior MP of trashing “the last ten years” of Conservative government as her party turned on its new leader over the mini-budget.

Robert Halfon, a former minister who chairs the education select committee, unleashed a furious attack on her financial measures, saying they disproportionately benefited the wealthy and meant she had abandoned “workers’ conservatism”.

Anything but, however:

According to an MP present, Halfon told Truss in a meeting of the 1922 Committee of backbenchers — her first as prime minister — that “in the last ten years we had the living wage, a focus on apprenticeships and skills”, contrasting that with “bankers’ bonuses, benefits cuts and now cuts to affordable housing targets”.

His intervention came after Truss tried to assuage Conservative MPs by saying she had “shielded families and businesses from bills of up to £6,000 this winter and for the winter ahead, while Labour has no plan beyond the next six months”.

The meeting did not go well. Halfon seemed to voice other MPs’ concerns:

a Tory MP who has been in the Commons for more than a decade said: “It was the worst 1922 I’ve ever been to.” They added: “With each tough question she looked like she’d had the wind knocked out of herthe 31st of October could finish her off on the basis of the reception she got in that room.”

Halloween — who schedules these things? — was supposed to be the day Kwasi was going to set out more detail behind his fiscal event. Liz’s friend and neighbour in Greenwich was on hand to support her:

Thérèse Coffey, the deputy prime minister, told reporters outside the 1922 meeting that the chancellor would meet MPs before presenting his medium-term plan on Halloween, stressing that engagement was key.

In the event, Truss had to sack Kwarteng and appoint (ahem) the aforementioned Jeremy Hunt as Chancellor. He delivered his shocking budget on Thursday, November 17, to Prime Minister Rishi Sunak’s approval. Sunak nodded several times during the presentation.

Returning to The Times‘s article of October 13, what other wets said presaged the future:

Even those who back the prime minister expect some sort of climbdown. One MP said: “She will have to unwind everything fiscal in the statement. They have to backtrack. There is no alternative. They’ve done it on the 45p and they’ll have to do it on the rest.

“Then if we are still 20 points behind in the polls we will have to change leader. We are cold-blooded like that.”

Another admitted there was “definitely still a big split between her and the Rishi [Sunak] side of the party”. Asked if Truss would have to perform another U-turn, they said: “Ultimately, I suppose it depends if she’s leveraged into that position by our own party, but it’s all by those with 20,000 majorities.”

Hmm … Hmm.

However, one Rishi Sunak supporter — Esther McVey — is deeply unhappy over his Chancellor’s budget:

On Tuesday, November 22, McVey rightly tore the budget apart in ConservativeHome, saying that Hunt’s tax rises are ‘socialist measures’ that are ‘punishing Conservative voters’:

… It wasn’t helped by the Chancellor’s statement being such a pendulum swing from the Liz Truss / Kwasi Kwarteng mini budget. People went from thinking they were getting their taxes cut to seeing them hiked.

The Autumn Statement was clearly an over-correction to that mini-budget. Going from one extreme to the other is hardly reassuring for people. A middle ground was needed: an acceptance of Conservative principles, with a costed plan and the accompanying narrative to reassure the markets.

Instead, Hunt delivered his statement with a doom and gloom that would have appropriate were the country on the brink of financial collapse. However, despite some serious challenges, things are not so dire that we had to have such excessive medicine.

For instance, the ten-year gilt yield – the interest rate the Government must pay on a new decade-long loan – was 3.14 per cent, whereas, even before the notorious mini-Budget in late September, that same yield was much higher at 3.49 per cent.

Britain is no more indebted than other comparable countries. Our national debt (albeit too high) stands at 97 per cent of GDP,  whereas France, Canada and the US stands at 115 per cent, 116 per cent and 132 per cent respectively. Across the G7, only Germany has lower levels of government debt than the UK.

So when I stood up in the House of Commons at PMQs the day before the budget and said –

Given that we have the highest burden of taxation in living memory, it is clear that the Government’s financial difficulties are caused by overspending and not due to undertakings. Does the Deputy Prime Minster therefore agree, if the government has got enough money to proceed with HS2 at any cost then it has sufficient money not to increase taxes, if however, it has so little money it has to increase taxes (which is the last thing for a conservative government to do) then it doesn’t have sufficient money for HS2 [High Speed Rail 2]?

So can I gently urge the Deputy Prime Minister not to ask Conservative MPs to support any tax rises, unless and until, this unnecessary vanity project is scrapped, because I for one won’t support them.

– it was to remind everyone there are better choices for our Conservative government than hiking up taxes.

In fact, given that unprecedented tax burden, any self-respecting Conservative would instinctively know that the answer is to spend less. Dropping HS2  – an out-of-date white elephant, costing north of £150 billion which (as Andrew Gilligan revealed on my show on GB News) the Ministers themselves know will deliver less economic benefit than the cost of it – would have been an ideal place to start.  That would certainly have been more desirable than increasing taxes on hard-working families who are already feeling the severe pain of higher energy prices and increased mortgage payments.

If a Conservative government with a sizeable majority – in a time of financial pressure – won’t cut public expenditure to start living within our means, then when on earth will that ever happen?

Parliament is debating Jeremy Hunt’s budget this week. In Monday’s proceedings, a number of Conservative MPs spoke out against it.

Liz’s U-turn on windfall tax

On October 12, two days before she sacked her friend and neighbour Kwasi Kwarteng, she appeared to do a U-turn on ‘no new taxes’ by allowing an announcement for a new levy on green energy firms.

Her ally, then-Business (BEIS) Secretary Jacob Rees-Mogg, defended the move and claimed it was not a windfall tax:

Guido Fawkes reported (emphases his):

The government has announced a new plan to impose a multi-billion pound levy on green energy firms to fund support to consumers. Renewable and nuclear electricity generators in England and Wales will now have their revenues capped after windfall tax-hating Liz Truss seemingly bowed to pressure to limit profits. The announcement came from BEIS last night, which is calling the new policy a “Cost-Plus-Revenue Limit” and spinning that it isn’t in any way a windfall tax “as it will be applied to ‘excess revenues’ as opposed to profits”. If it walks like a tax, swims like a tax and quacks like a tax…

The latest backtracking on free market values by the government comes just 41 days after Liz Truss told party members at the London husting that they could read her lips, and there would be no new taxes under her leadership …

On Today this morning, Rees-Mogg tried performing a Jedi mind trick, saying “this is not a windfall tax…this is rationalising the market”…

Despite the government’s denial that the new revenue limit is a tax, the boss of RWE – the third biggest renewable power generator in Britain – has told The Times the move “is a de facto ‘windfall tax’ on low-carbon generators that, if not designed and implemented correctly, could have severe negative consequences for investment in the renewable and wider energy market and so for the energy transition.”

Guido warned that Labour’s support for the new levy is not a good sign:

Ed Miliband welcoming the policy with open arms should give the government sufficient pause for thought before it buys its own spin…

The mystery of Liz signing UK up to EU’s PESCO

Early in October, Liz did a strange thing, considering she is a staunch Brexit supporter.

She attended the first ever meeting of the European Political Community in Prague. The European Political Community is Emmanuel Macron’s brainchild.

This group is made up of EU member countries, yet, somehow Liz got an invitation. No one knows for certain.

However, she went.

She met with Macron on Thursday, October 6, in an effort to get the Channel dinghy crossing issue resolved.

GB News reported:

Liz Truss hailed Emmanuel Macron as a “friend” on Thursday, as the two countries signalled that a new agreement could be close to tackle small-boat crossings in the Channel.

The pair met at the first summit of the European Political Community in Prague, a gathering pushed for by the French president.

There, the pair said they looked forward to “an ambitious package of measures this autumn” to address issue of migration across the Channel.

And in a sign that Ms Truss hopes to improve relations with Mr Macron, she had no hesitation in labelling him a “friend”, just weeks after refusing to do so …

Mr Macron later suggested it was a “problem” if Britain could not call itself a friend of France.

But Prime Minister Ms Truss adopted a different tone ahead of a meeting with Mr Macron in Prague on Thursday.

She told broadcasters: “I work very, very closely with President Macron and the French government and what we’re talking about is how the UK and France can work more closely together to build more nuclear power stations and to make sure that both countries have energy security in the future.

“We’re both very clear the foe is Vladimir Putin, who has through his appalling war in Ukraine threatened freedom and democracy in Europe and pushed up energy prices which we’re now all having to deal with.”

Asked if he was then a friend, Ms Truss said: “He is a friend.”

The bi-lateral meeting between the two leaders, which took place towards the end of the day, appeared to signal some progress on the issues of migration and energy, both areas Ms Truss had raised as priorities ahead of the summit.

“Thank you for being here,” Mr Macron told the PM when they met.

It also emerged that the two countries have agreed to hold a joint summit next year to “take forward a renewed bilateral agenda”, in a further sign of the desire for warmer relations between the two countries.

On migration, a joint statement said the leaders “agreed to deepen cooperation on illegal migration within the bounds of international law, to tackle criminal groups trafficking people across Europe, ending in dangerous journeys across the Channel”.

But the big, and secret, news was that Liz had signed the UK up to the EU’s PESCO — Permanent Structured Co-operation — which is a military initiative.

Nigel Farage announced the move on his GB News show as soon as he had heard.

On Friday, October 7, The Express said that the move could affect British armed forces by dragging them into an EU army:

The Prime Minister has been warned not to allow the UK to be dragged into an EU Army by accident after she signed a military deal this week at Emmanuel Macron’s European Political Community (EPC) summit in Prague. The decision to go into part of the PESCO has alarmed some Brexiteers who fear it could undermine the UK’s sovereignty.

Former defence minister Sir Gerald Howarth, a leading Brexiteer has led the campaign to resist joining PESCO for many years.

He said: “This is very serious and we must be very careful. The issue around PESCO is that the structures are permanent.

“We must not sign up to anything which undermines our sovereignty and where we do not have a veto.

“Second, we must not do anything that undermines NATO. If we have learnt anything over the last few months is that we need NATO for the defence of western values and Europe against our enemies which at the moment is clearly Russia.”

Even if this has to do with Ukraine, and enables us to move troops and military equipment more easily, it still raises questions:

At the EPC meeting on Thursday, the EU member states voted unanimously to allow the UK to join the the mobility project that would allow the UK to move troops and military equipment more quickly.

The UK Government decided to enter the strand in case Britain is called upon as a NATO ally to defend the Baltic states from a Russian invasion.

However, staunch Brexiteer Mark Francois MP was relaxed about it:

One senior Brexiteer, former Armed Forces Minister, Mark Francois, who now chairs the powerful group of Tory Brexiteers the European Research Group (ERG), said he believes that the move was the right one.

He said: “As we are outside the EU, we can opt in to individual PESCO projects if they have merit and looking at how we could speed up reinforcing the Baltic States from the UK, across internal EU borders, may well have military advantages.

“However, it is NATO that remains the bedrock of our security, especially in deterring further Russian adventurism and we should never forget that.”

On October 9, David Kurten, a former London Assembly member and founder of the Heritage Party, said that signing the UK up to PESCO was a betrayal of Brexit:

One month ago, the aforementioned Sir George Howarth appeared on Farage to say that we still do not know what part of PESCO Liz signed us up to. He was clearly concerned, saying that the implications could be important, especially as none of the countries involved has a veto. The EU calls all the shots:

Today, one month on, we are none the wiser about our involvement in PESCO.

Someone must know what’s going on. In fact, a lot of people probably do know.

Liz’s final week

All of Liz’s opponents, whether on the right or the left, told us that Liz and Kwasi, joined at the hip politically, had to go.

Project Fear started as soon as Kwasi delivered his mini-budget on September 23.

On September 27, Bloomberg told us that UK markets had lost $500 billion in combined value since Liz Truss became PM. Really?

‘Investor confidence’ means international markets, ergo part of the Establishment.

Also at that time, former Conservative Chancellor George Osborne, who served under David Cameron, stuck the boot in.

On September 29, a comment from an UnHerd reader appeared in response to one of their articles, beginning with ‘Is this the end for Liz Truss?’:

https://image.vuukle.com/cd72018a-5f0a-4709-9803-e23f8e87646b-764e1fe1-a6f9-4692-939c-102335eb4ec9

Osborne features heavily in it. The reader quotes him saying, ‘The markets are punishing Liz Truss for failing to balance her budget’.

The UnHerd reader says:

Right.

Of all people, George Osborne knows full well that is not what is happening. We can be sure he knows this — and is therefore engaging in a bout of very useful political lying — because Mr Osborne also dropped higher rate taxes [the 50% rate], on a backdrop of media squealing … and yet the tax receipts after making those cuts … went up.

So Mr Osborne is a classic shill of the modern era …

As to whether Liz would have to go, the reader supplies the answer at the top of his message:

well, if the globalists and left-leaning power brokers who’ve comfortably controlled global affairs for the past few decades still retain control, then yesit is the end for Truss

It doesn’t matter if that thing is related to tax, or to immigration, or to frackingthat’s not the point. The chattering and Davos classes are used to being in charge and controlling the direction of travel no matter who we elect.

Speaking of such people, on Wednesday, October 12, King Charles greeted Liz with, ‘Dear, oh dear’, while the press were still there to record it for posterity:

What did he know and when?

The beginning of the end came two days later on Friday, October 14, when Liz sacked Kwasi and appointed (ahem) Jeremy Hunt as Chancellor. This was the shortest and most painful press conference — she only took four questions — in living memory. She looked like a rabbit in the headlamps or a hostage being forced at gunpoint to read out a message:

As soon as she announced it, we knew Hunt was, at that point, the de facto Prime Minister.

Hours later, The Telegraph reported:

Mr Hunt, a former foreign secretary, took the helm at the Treasury following the sacking of Kwasi Kwarteng over the mini-Budget fiasco. Ms Truss turned to him even though the pair have strongly disagreed on economic policy.

Mr Hunt, also an ex-health secretary, endorsed Rishi Sunak for the Tory leadership after being voted out of the race in July, saying: “This is the wrong time for populist crowd-pleasing and the right time for honesty.”

He will hold huge power over a weakened Prime Minister, raising the likelihood that much of her growth plan will now be axed. Allies said that he would act as her “chief executive”.

Mr Hunt ran for the Conservative leadership on a platform of slashing corporation tax to 15 per cent to boost growth but also opposed cuts to personal levies such National Insurance and income tax, with which Ms Truss still intends to press ahead.

His appointment was announced moments before the Prime Minister unveiled her U-turn on corporation tax at a press conference. She ditched what had been a core leadership pledge, meaning the rate companies pay on their profits will go up from 19 to 25 per cent in April. It means she has reverted to the plan put in place by Mr Sunak when he was chancellor.

Quelle surprise!

Conservative Party members had voted Liz Truss in largely on her economic policy.

The elites took out her Chancellor. Soon afterwards, they came for her in the form of Conservative MPs and the 1922 Committee. It was a grand game of political chess, not seen since Margaret Thatcher was removed from office in 1990.

To be continued on Friday.

While this is a change to the previous schedule of analysing Liz Truss’s premiership, more about which next week, there are references below as to why hers and Kwasi Kwarteng’s plan was the right one for the UK.

Chancellor Jeremy Hunt delivered his Autumn Statement — a Labourite Conservative budget — on Thursday, November 17, 2022.

Compared with Kwasi Kwarteng’s fiscal event of September 23, this will be a disaster for most middle class Britons.

It was clear that Hunt designed this budget to placate the all-hallowed — for whatever reason — OBR (Office for Budget Responsibility) and the markets. Stability is their watchword. Growth, regardless of what Hunt said yesterday, plays little part in our economy for the foreseeable future.

Unlike Kwarteng’s, which did focus on growth, Hunt’s statement had little to no consideration of the British taxpayer in a cost of living crisis.

What Hunt said

Before going into Hunt’s address, Guido Fawkes has a brief summary and the full detail from the Treasury, a 70-page document.

Below are excerpts from Hunt’s Autumn Statement to the House of Commons (emphases mine):

… today we deliver a plan to tackle the cost of living crisis and rebuild our economy. Our priorities are stability, growth and public services. We also protect the vulnerable, because to be British is to be compassionate and this is a compassionate Conservative Government.

Remember when then-Chancellor Rishi Sunak told us we did not have to worry about the cost of borrowing and borrowing itself during the pandemic? Well, now we have to worry:

Most countries are still dealing with the fallout from a once-in-a-century pandemic. The furlough scheme, the vaccine roll-out and the response of the NHS did our country proud, but they all have to be paid for.

Hunt paid homage to the Bank of England and had a poke at Kwarteng for not doing so:

So the Bank of England, which has done an outstanding job since its independence, now has my wholehearted support in its mission to defeat inflation and I today confirm we will not change its remit. But we need fiscal and monetary policy to work together, and that means the Government and the Bank working in lockstep.

He delivered a deeper attack on Kwarteng:

I understand the motivation of my predecessor’s mini-Budget and he was correct to identify growth as a priority, but unfunded tax cuts are as risky as unfunded spending, which is why we reversed the planned measures quickly. As a result, Government borrowing has fallen, the pound has strengthened and the OBR says today that the lower interest rates generated by the Government’s actions are already benefiting our economy and public finances. But credibility cannot be taken for granted and yesterday’s inflation figures show we must continue a relentless fight to bring it down, including a rock solid commitment to rebuild our public finances.

He bowed before the all-powerful OBR, whose forecasts have not been terribly accurate over the past few years. Let us see if these come true in the coming months:

Richard Hughes and his team at the OBR today lay out starkly the impact of global headwinds on the UK economy, and I am enormously grateful to him and his team for their thorough work. The OBR forecasts the UK’s inflation rate to be 9.1% this year and 7.4% next year. It confirms that our actions today help inflation to fall sharply from the middle of next year. It also judges that the UK, like other countries, is now in recession. Overall this year, the economy is still forecast to grow by 4.2%. GDP then falls in 2023 by 1.4%, before rising by 1.3%, 2.6% and 2.7% in the following three years. The OBR says higher energy prices explain the majority of the downward revision in cumulative growth since March. It also expects a rise in unemployment from 3.6% today to 4.9% in 2024, before falling to 4.1%.

This is Hunt’s strategy, with the blessing of the OBR and borrowing Sunak’s morality from the August leadership campaign about leaving debts to the next generation:

I also confirm two new fiscal rules. The first is that underlying debt must fall as a percentage of GDP by the fifth year of a rolling five-year period. The second is that public sector borrowing over the same period must be below 3% of GDP. The plan I am announcing today meets both rules.

Today’s statement delivers a consolidation of £55 billion, and means inflation and interest rates end up significantly lower. We achieve this in a balanced way. In the short term, as growth slows and unemployment rises, we will use fiscal policy to support the economy. The OBR confirms that, because of our plans, the recession is shallower and inflation is reduced. Unemployment is also lower, with about 70,000 jobs saved as a result of our decisions today. Then, once growth returns, we increase the pace of consolidation to get debt falling. This further reduces the pressure on the Bank to raise interest rates, because as Conservatives we do not leave our debts to the next generation.

So this is a balanced path to stability, tackling inflation to reduce the cost of living and protect pensioner savings, while supporting the economy on a path to growth. But it means taking difficult decisions.

Hunt then discussed the fiscal drag elements of the budget. Fiscal drag means drawing the unsuspecting into paying new and more tax:

I start with personal taxes. Asking more from those who have more means that the first difficult decision I take on tax is to reduce the threshold at which the 45p rate becomes payable from £150,000 to £125,140. Those earning £150,000 or more will pay just over £1,200 more in tax every year. We are also taking difficult decisions on tax-free allowances. I am maintaining at current levels the income tax personal allowance, higher rate threshold, main national insurance thresholds and the inheritance tax thresholds for a further two years, taking us to April 2028. Even after that, we will still have the most generous set of tax-free allowances of any G7 country.

I was amazed he could talk about 2028 with a straight face. By then, we will probably have a Labour government. Oh well, he’s done their work for them.

Continuing on tax rises, he said:

I am also reforming allowances on unearned income. The dividend allowance will be cut from £2,000 to £1,000 next year, and then to £500 from April 2024. The annual exempt amount for capital gains tax will be cut from £12,300 to £6,000 next year, and then £3,000 from April 2024. Those changes still leave us with more generous allowances than countries such as Germany, Ireland, France, and Canada.

Because the OBR forecasts that half of all new vehicles will be electric by 2025, to make our motoring tax system fairer, I have decided that from then electric vehicles will no longer be exempt from vehicle excise duty. Company car tax rates will remain lower for electric vehicles, and I have listened to industry bodies and will limit rate increases to 1 percentage point a year for three years from 2025.

At least he kept one thing from Kwarteng’s statement:

The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-Budget will remain in place but only until 31 March 2025. After that, I will sunset the measure, creating an incentive to support the housing market, and the jobs associated with it, by boosting transaction during the period when the economy most needs it.

He won’t even be Chancellor then.

Moving on to businesses:

I now turn to business taxes. Although I have decided to freeze the employers national insurance contributions threshold until April 2028, we will retain the employment allowance at its new higher level of £5,000. That means that 40% of all businesses will pay no NICs at all. The VAT threshold is already more than twice as high as the EU and OECD averages. I will maintain it at that level until March 2026.

Then came the windfall tax:

Can I just say that any such tax should be temporary, not deter investment and recognise the cyclical nature of energy businesses? So, taking account of that, I have decided that from 1 January until March 2028 we will increase the energy profits levy from 25% to 35%. The structure of our energy market also creates windfall profits for low-carbon electricity generation, so we have decided to introduce, from 1 January, a new, temporary 45% levy on electricity generators. Together, those measures will raise £14 billion next year.

Business rates have been a thorn in the side of those enterprises on our high streets. Here, it would seem, Hunt offered some relief:

Finally, I turn to business rates. It is an important principle that bills should accurately reflect market values, so we will proceed with the revaluation of business properties from April 2023, but I will soften the blow on businesses with a nearly £14 billion tax cut over the next five years. Nearly two thirds of properties will not pay a penny more next year and thousands of pubs, restaurants and small high street shops will benefit. That will include a new Government-funded transitional relief scheme, as called for by the CBI, the British Retail Consortium, the Federation of Small Businesses and others, benefiting around 700,000 businesses.

Then he turned to people on benefits, proving that Sunak’s furlough scheme during the pandemic was more than adequate:

… I am proud to live in a country with one of the most comprehensive safety nets anywhere in the world. But I am also concerned that we have seen a sharp increase in economically inactive working-age adults of about 630,000 people since the start of the pandemic. Employment levels have yet to return to pre-pandemic levels, which is bad for businesses who cannot fill vacancies and bad for people missing out on the opportunity to do well for themselves and their families, so the Prime Minister has asked the Work and Pensions Secretary to do a thorough review of issues holding back workforce participation, to conclude early in the new year.

Alongside that, I am also committed to helping people already in work to raise their incomes, progress in work and become financially independent. So we will ask over 600,000 more people on universal credit to meet with a work coach so that they can get the support that they need to increase their hours or earnings. I have also decided to move back the managed transition of people from employment and support allowance on to universal credit to 2028, and will invest an extra £280 million in the DWP to crack down on benefit fraud and error over the next two years. The Government’s review of the state pension age will be published in early 2023.

He then discussed foreign spending:

… I salute the citizens of another country right on the frontline … the brave people of Ukraine. The United Kingdom has given them military support worth £2.3 billion since the start of Putin’s invasion, the second highest contribution in the world after the United States, which demonstrates that our commitment to democracy and open societies remains steadfast. In that context, the Prime Minister and I both recognise the need to increase defence spending. But before we make that commitment, it is necessary to revise and update the integrated review, written as it was before the Ukraine invasion. I have asked for that vital work to be completed ahead of the next Budget and today I confirm that we will continue to maintain the defence budget at at least 2% of GDP to be consistent with our NATO commitment.

I was pleased to hear that overseas aid will stay at 0.5%:

Another important international commitment is to overseas aid. The OBR’s forecasts show a significant shock to public finances, so it will not be possible to return to the 0.7% target until the fiscal situation allows. We remain fully committed to that target, and the plans I have set out today assume that official development assistance spending will remain around 0.5% for the forecast period. As a percentage of GNI, we were the third highest donor in the G7 last year, and I am proud that our aid commitment has saved thousands of lives around the world.

Net Zero is still going ahead:

I also confirm that, despite the economic pressures, we remain fully committed to the historic Glasgow climate pact agreed at COP26, including a 68% reduction in our own emissions by 2030.

He discussed schools, beginning with those in England:

we have risen nine places in the global league tables for maths and reading in the last seven years.

… as Chancellor I want to know the answer to one simple question: will every young person leave the education system with the skills they would get in Japan, Germany or Switzerland? So, I have appointed Sir Michael Barber to advise me and my right hon. Friend the Education Secretary on the implementation of our skills reform programme.

Some have suggested putting VAT on independent school fees as a way of increasing core funding for schools, which would raise about £1.7 billion. But according to certain estimates, that would result in up to 90,000 children from the independent sector switching to state schools, giving with one hand only to take away with another.

So instead of being ideological, I am going to be practical: because we want school standards to continue to rise for every single child, we are going to do more than protect the schools budget—we are going to increase it. I can announce today that next year and the year after, we will invest an extra £2.3 billion per annum in our schools.

He has asked a former Labour MP, Patricia Hewitt, to help him reform the NHS. Oh, my days:

I have asked the former Health Secretary and chair of the Norfolk and Waveney integrated care system, Patricia Hewitt, to help me and the Health Secretary to achieve that by advising us on how to make sure that the new integrated care boards, the local NHS bodies, operate efficiently and with appropriate autonomy and accountability. I have also had discussions with NHS England about the inflationary pressures on their budgets.

More money will be pumped into the system:

With £3.3 billion for the NHS and £4.7 billion for social care, there is a record £8 billion package for our health and care system. That is a Conservative Government putting the NHS first.

Barnett consequentials, which come from the hard-pressed English taxpayer, will also increase:

The NHS and schools in Scotland, Wales and Northern Ireland face equivalent pressures, so the Barnett consequentials of today’s decisions mean an extra £1.5 billion for the Scottish Government, £1.2 billion for the Welsh Government, and £650 million for the Northern Ireland Executive. That means more resources for the schools and hospitals in our devolved nations next year, the year after and every year thereafter.

A new energy strategy will be forthcoming from the Business Secretary.

These are Hunt’s infrastructure commitments:

… today I can announce that I am not cutting a penny from our capital budgets in the next two years, and I am maintaining them at that level in cash terms for the following three years. That means that although we are not growing our capital budget as planned, it will still increase from £63 billion four years ago to £114 billion next year and £115 billion the year after, and will remain at that level—more than double what it was under the last Labour Government.

Smart countries build on their long-term commitments rather than discarding them, so today I confirm that because of this decision, alongside Sizewell C, we will deliver the core Northern Powerhouse Rail, HS2 to Manchester, East West Rail, the new hospitals programme and gigabit broadband roll-out. All these and more will be funded as promised, with over £600 billion of investment over the next five years to connect our country and grow our economy.

Our national Conservative mission is to level up economic opportunity across the country. That, too, needs investment in infrastructure, so I will proceed with round 2 of the levelling-up fund, at least matching the £1.7 billion value of round 1. We will also drive growth across the UK by working with the Scottish Government on the feasibility study for the A75, supporting the advanced technology research centre in Wales and funding a trade and investment event in Northern Ireland next year.

He is bringing devolution to England in the form of mayoralties:

Our brilliant [Conservative] Mayors such as Andy Street and Ben Houchen have shown the power of civic entrepreneurship. We need more of this inspirational local leadership, so today I can announce a new devolution deal that will bring an elected Mayor to Suffolk, and deals to bring Mayors to Cornwall, Norfolk and an area in the north-east to follow shortly. We are also making progress towards trailblazer devolution deals with the Greater Manchester Combined Authority and the West Midlands Combined Authority, and soon over half of England will be covered by devolution deals. Taken together, that £600 billion investment in our future growth represents the largest investment in public works for 40 years, so our children and grandchildren can be confident that this Conservative Government are investing in their future.

Hunt is altering the Truss-Kwarteng investment zones to be more in line with Michael Gove’s aspirations for levelling up:

I will also change our approach to investment zones, which will now focus on leveraging our research strengths by being centred on universities in left-behind areas, to help to build clusters for our new growth industries. My right hon. Friend the Levelling Up Secretary will work with Mayors, devolved Administrations and local partners to achieve this, with the first decisions announced ahead of the spring Budget.

The Truss-Kwarteng energy support plan remains in place until the end of March 2023:

I pay tribute to my predecessor, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), and to the former Prime Minister, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), for their leadership in this area. This winter, we will stick with their plan to spend £55 billion to help households and businesses with their energy bills—one of the largest support plans in Europe. From April, we will continue the energy price guarantee for a further 12 months at a higher level of £3,000 per year for the average household. With prices forecast to remain elevated throughout next year, this will mean an average of £500 of support for every household in the country.

There is more help for the most vulnerable:

At the same time, for the most vulnerable, we will introduce additional cost of living payments next year of £900 to households on means-tested benefits, £300 to pensioner households and £150 for individuals on disability benefit. We will also provide an additional £1 billion of funding to enable a further 12-month extension to the household support fund, helping local authorities to assist those who might otherwise fall through the cracks. For those households that use alternative fuels such as heating oil and liquefied petroleum gas to heat their homes, I am today doubling the support from £100 to £200, which will be delivered as soon as possible this winter. Before the end of this year, we will also bring forward a new targeted approach to support businesses from next April.

But I want to go further to support the people most exposed to high inflation. Around 4 million families live in the social rented sector—almost one fifth of households in England. Their rents are set at 1% above the September inflation rate, which means that on current plans they are set to see rent hikes next year of up to 11%. For many, that would just be unaffordable, so today I can announce that this Government will cap the increase in social rents at a maximum of 7% in 2023-24. Compared with current plans, that is a saving for the average tenant of £200 next year.

Labour started a commotion at this point. Hunt then announced a rise in the minimum wage:

This Government introduced—[Interruption.] I thought they cared about the most vulnerable! This Government introduced the national living wage, which has been a giant step in eliminating low pay, so today I am accepting the recommendation of the Low Pay Commission to increase it next year by 9.7%. This means that, from April 2023, the hourly rate will be £10.42, which represents an annual pay rise worth over £1,600 to a full-time worker. It is expected to benefit over 2 million of the lowest-paid workers in our country, and it keeps us on track for our target to reach two thirds of median earnings by 2024. It is the largest increase in the UK’s national living wage ever.

Benefits will increase by the rate of inflation:

today I commit to uprating such benefits by inflation, with an increase of 10.1%. That is an expensive commitment, costing £11 billion, but it means that 10 million working-age families will see a much-needed increase next year, which speaks to our priorities as a Government and our priorities as a nation. On average, a family on universal credit will benefit next year by around £600. To increase the number of households that can benefit from this decision, I will also exceptionally increase the benefit cap by inflation next year.

Finally, I have talked a lot about the British values of compassion, hard work, dignity and fairness, but there is no more British value than our commitment to protect and honour those who built the country we live in, so to support the poorest pensioners I have decided to increase pension credit by 10.1%, which is worth up to £1,470 for a couple and £960 for a single pensioner in our most vulnerable households, but the cost of living crisis is harming not just our poorest pensioners but all pensioners.

The triple-lock stays:

Because we have taken difficult decisions elsewhere today, I can also announce that we will fulfil our pledge to the country to protect the pension triple lock. In April, the state pension will increase in line with inflation, an £870 increase, which represents the biggest ever increase in the state pension. To the millions of pensioners who will benefit from this measure, I say: “Now and always, this Government are on your side.”

Hunt did not receive a jubilant reception from Conservative MPs, some of whom had concerns.

Dr Liam Fox asked about quantitative easing and interest rates:

I congratulate my right hon. Friend on a balanced and skilful statement prioritising fiscal stability. He will be aware that some of us believe that the Bank of England maintained monetary conditions that were too loose for too long, but that it would also be a mistake to maintain monetary conditions that are too tight for too long. Can he therefore confirm that the anti-inflationary measures that he has taken today will mean that the pressure to raise interest rates will be minimised, and that there is a much greater chance that they will fall earlier than would otherwise have been the case?

Hunt replied:

My right hon. Friend is absolutely right to focus on this issue, because every 1% increase in interest rates is about £850 more on the average mortgage, so it is hugely important to families up and down the country. The OBR has said that the measures that we have taken today will mean that inflation is lower than it would otherwise have been. That means that the Bank of England is under less pressure to increase interest rates, which for reasons that he knows are such a worry for so many families.

Sir William Cash was concerned about the ever-increasing costs of the HS2 rail project:

My right hon. Friend argued for sound money and sound foundations. Would he be good enough to explain how it is that High Speed 2 will continue beyond Birmingham at a verifiable cost of at least £40 billion, when every independent report on HS2 condemns the project and confirms that phase 2 will make rail services to all west coast destinations north of Birmingham much worse? I ask him to make a clear commitment to keep this matter under review at all costs; it is in the national interest.

Hunt said:

My hon. Friend is right that the increases in the budget for HS2 are disappointing, but a strong economy needs to have consistency of purpose, and that means saying we will make sure that we are a better connected country. The lack of those connections is one of the fundamental reasons for the differences in wealth between north and south, which we are so committed to addressing. There is a bigger issue about the way that we do infrastructure projects: it takes too long, and the budgets therefore get out of control. We are just not very good at it, and we have to sort it out.

Theresa Villiers rightly asked how soon we could move to a lower-tax economy if the forecasts are wrong. For me, this was the question of the day:

I thank the Chancellor for the announcement on schools funding, which, as he knows, is something that I raised with him as being crucial. Can he also confirm that, if current forecasts about economic recovery and inflation prove to be overly pessimistic, we will move more quickly than he has announced today towards delivering a lower-tax economy?

Hunt was non-committal:

My right hon. Friend is an immensely experienced colleague. She is right to point out that there is always inaccuracy in any forecast, and there is always variation from fiscal event to fiscal event, so we keep all those decisions under review in the round. I think it is still important to have forecasts—that is better than not to have them—but we keep all those decisions under review.

Virginia Crosbie from Ynys Môn in Wales asked how soon the new nuclear programme would begin:

This Government’s commitment to Sizewell C and large-scale nuclear is welcome, and it was noted that Labour’s shadow Chancellor failed to mention nuclear. When will the launch of Great British Nuclear be announced, and will its scope include large-scale gigawatt nuclear at sites such as Wylfa in my constituency, as well as small modular reactors?

Hunt was encouraging:

There is no more formidable advocate for big nuclear investment on Ynys Môn than my hon. Friend. Indeed, when I went on a family holiday to Ynys Môn this summer, she tried to persuade me to visit the potential site of a nuclear power station with my children. I apologise that I did not take her up on the offer, but it shows her commitment. My right hon. Friend the Business Secretary will be making an announcement soon on things such as the launch of Great British Nuclear—I hope before Christmas, but if not just afterwards—because we want to crack on with our nuclear programme.

Richard Drax was concerned about the burden on the taxpayer, another excellent question:

I have huge sympathy for my right hon. Friend. We are facing severe financial challenges for the reasons he explained so well, but Members on both sides of the House are promising to spend billions and billions more pounds. I remind the House that it is the private sector, and hardworking people through their taxes, who pay for Government expenditure. Does my right hon. Friend agree that raising taxes on both risks stifling the growth and productivity that he and I both want, and that would counter the recession we are now in?

Hunt defended his budget:

My hon. Friend is right to make the case for a lightly taxed dynamic economy, and I would like to bring taxes down from their current level. We are faced with the necessity of doing something fast to restore sound money and bring inflation down from 11%, which is why we have made difficult decisions today. But yes, my hon. Friend is absolutely right: there is no future for this country unless we get back on the path to being a lower taxed economy.

Mark Pawsey asked about small businesses:

My constituents in Rugby and Bulkington will not enjoy the tough decisions that the Chancellor has had to make today, but they will understand the need for sound finances after the huge expenditure that the country has made on the pandemic and supporting people with their energy costs as a consequence of the war in Ukraine. They will also want to know that businesses will continue to invest to grow and to create jobs. Will he speak about the incentives that still exist for businesses to do exactly that?

Hunt pledged his support:

I am happy to do that. My hon. Friend is quite right to raise those issues. We are doing a lot of short-term things, including help with energy bills as well as business rates. As we move to a new business rates system, we are freezing the levels at which business rates can increase and introducing a 75% discount next year for retail, hospitality and leisure businesses. Fundamentally, as a Conservative Government, we know that we cannot flourish as an economy without flourishing small businesses, and we will back them to the hilt.

Greg Smith asked what Hunt was doing about reducing fuel duty:

I absolutely agree with my right hon. Friend when he talks about the inflationary pressures coming from the aftershocks of the pandemic and the war in Ukraine. We see that at the fuel pumps and, more significantly, our haulage and logistics sector sees it with the enormous level of taxation on diesel in particular driving inflation to get food and goods on to our shelves. As he prepares for the March Budget, will he look at the inflationary impact of fuel duty on top of the high cost of diesel and see whether we can reduce it?

Hunt said he was looking at the issue:

I assure my hon. Friend that I will absolutely do that. We have a little time, and I know that fuel duty is an important issue to him and many other colleagues.

March 2023 — fuel duty hike

Hunt’s answer to Greg Smith on the fuel duty hike sounded reassuring, but GB News’s economic editor Liam Halligan uncovered a planned fuel duty hike of 23% for March 2023 from the OBR forecast. It would be the first since 2011:

Here’s Liam Halligan talking about it:

Forbes noticed it, too, bringing the news to an even wider international audience:

https://image.vuukle.com/8d46442a-2514-45e7-9794-98dfc370ce1b-94c4922a-473b-4f2c-bf6c-332bb8ccac4e

Fiscal drag

The Times had an article on the upcoming fiscal drag following Hunt’s budget:

Disposable incomes, after adjusting for inflation, will fall by 4.3 per cent in 2022-23, which would be the largest fall since records began in the 1950s. It is set to be followed by the second largest fall — in 2023-24 — of 2.8 per cent.

… Despite the aspirations of Rishi Sunak to create a low-tax economy, Britain is on course for its biggest ever tax burden as hundreds of thousands of workers are dragged into higher income tax bands by the freezing of thresholds and allowances while businesses also face a jump in levies, including employment taxes.

The tax burden is set to rise to 37.5 per cent of GDP in the financial year ending 2025, reaching the highest level since records began shortly after the Second World War.

The level of taxation as a share of the national income will rise to 36.4 per cent of GDP this year and 37.4 per cent in the financial year ending 2024, breaking the previous record.

Recovery is not likely to begin until 2025, several months after the next general election. This is accurate only if Conservatives are still in power by then:

GDP is expected to rise by 4.2 per cent this year before falling by 1.4 per cent next year, only returning to pre-pandemic levels by the end of 2024. However, growth is expected to pick up to 2.6 per cent the following year and 2.7 per cent in 2026, following a recovery in real incomes, consumption and investment.

The Telegraph also had an article on fiscal drag:

Nearly a quarter of a million workers will be dragged into paying the 45p rate of income tax after Jeremy Hunt slashed the threshold at which it is charged.

The salary on which the additional rate is payable will be reduced from £150,000 to £125,140 effective next April, Chancellor Jeremy Hunt announced in the Autumn Statement, and frozen until 2028, forcing 232,000 workers into paying the top rate of tax for the first time and costing these quarter of a million taxpayers £620 on average, according to wealth manager Quilter.

The number of workers paying 45pc has more than doubled since the rate was first introduced in 2010 – rising from 236,000 to 629,000 today – as wage inflation has pushed more taxpayers into the highest income tax band.

Lowering the threshold will cost the 629,000 workers earning over £150,000 who are already impacted by the 45pc tax an additional £1,250 …

Just two months ago, then-Chancellor Kwasi Kwarteng promised that the top rate would be abolished altogether. But now the Government is hoping to earn £420m in 2023-24 by catching more taxpayers in the 45pc net, and almost double that – £855m – in 2027-28.

Neela Chauhan of accountancy firm UHY Hacker Young said the move was “a major attack” on higher earners.

She added: “It’s going to bring in people into the upper rate who feel that they are far from being rich.”

Tax firm RSM said that there are also unexpected consequences of slashing the additional-rate threshold and the Chancellor had opened the door to a new 67.5pc tax rate.

Taxpayers earning over £100,000 lose their personal allowance at a rate of £1 for every £2 of income.

This means for every £100 they earn between £100,000 and £125,140, a worker takes home just £40 – because £40 is lost to income tax and another £20 to the tapering of the personal allowance – creating a 60pc tax trap.

Dismal headlines

The Guardian has a breakdown of last Friday’s front pages, which were bleak.

The Telegraph noted the austerity of George Osborne, Chancellor when the Conservative-Lib Dem coalition took over from in 2010, and the Labourite policies of his predecessor Gordon Brown. At the bottom of the page is an analysis from Lord Frost:

Lord Frost’s analysis is pro-Truss/Kwarteng

Lord Frost points out that the OBR are predicting what Liz Truss did just a few weeks ago:

This was a very curious Autumn Statement. For the last month, we have been told that Britain needed to re-establish the confidence of the markets and put in place renewed fiscal discipline, supposedly so carelessly squandered by Liz Truss. “Eye-wateringly painful decisions” were coming for all of us …

… public spending will be at its highest since the 1970s and taxation the highest since the Second World War. Both only start to fall, gently, in the late 2020s, and then only because of some pretty heroic assumptions about growth. Indeed, under Liz Truss we were told that 2.5 per cent growth was impossible – yet the Office for Budget Responsibility (OBR) is predicting exactly that for 2025 and 2026.

How do we explain this?

To do so, I think, we have to go back to that extraordinary week in mid-October, when Truss’s government blew up on the launch pad

She was levered out of Downing Street with the argument that she had been careless about the public finances, casual about fiscal discipline and had lost market confidence. An emergency correction was needed – tax rises or spending cuts, and probably both.

Yet on taking office, our current government will have found – as the OBR has now acknowledged – that we were already into a deepening recession. Tightening fiscal policy with growth collapsing and interest rates increasing globally would clearly have been an insane policy, one at variance with what virtually every economist would suggest. But, having destroyed the Truss administration for being insufficiently fiscally disciplinarian, the Government could hardly overtly change course itself.

That is why we got what we got. Keep growing spending, raise taxes now on unpopular groups, defer deficit reduction and everything else until 2025, and meanwhile talk a lot about austerity and discipline to disguise the reality that this is likely a similar fiscal policy to what Truss’s would have been, just at higher levels of tax and spend. Then, after the election, if the Conservatives are still in power, it can all be looked at again …

… Taxes on business wreck investment and growth. Taxes on the (not very) rich destroy incentives. Britain’s hard-won reputation for being a low tax country is permanently lost. And we all have less of our own money and are less free.

Another defence of Trussonomics

The Mail reminds us that the Truss plan was to cap energy prices for two years. Hunt has reduced this to the end of March 2023:

Average energy bills will rise to £3,000 a year from April as Chancellor Jeremy Hunt confirmed he was scrapping previous Government plans.

In his Autumn Statement to the House of Commons, Mr Hunt revealed changes to the ‘Energy Price Guarantee’ would leave Britons facing higher gas and electricity payments next year.

When former prime minister Liz Truss first announced the cost of living support in September, she outlined how average energy bills would be frozen at £2,500 a year for the next two years

Delivering details of an altered plan today, Mr Hunt revealed the Energy Price Guarantee would now be set at a higher level of £3,000 a year for average households until April 2024.

Of course, those who use less energy at home might have less to pay:

The plan only caps the cost per unit that households pay, with actual bills still determined by how much is consumed.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said:

The fact that this comes on top of so many other price rises means life is going to get even tougher next spring.

More Trussonomics

The Spectator‘s editor Fraser Nelson wrote an analysis of the budget for The Telegraph, ‘This could turn out to be the week that the Tories lost the next election’.

I noted above that some of what Hunt said points far into the future.

Fraser Nelson also observed that fact:

Suspiciously, almost all of this austerity is due to take place after April 2025, after the election. The Tory benches were very quiet during Hunt’s speech, perhaps because they were piecing all this together. It was not just an Autumn Statement being written, but the next Conservative manifesto, too – with all the bad stuff saved for after the vote. Hardly the behaviour of a party expecting to win.

As one minister put it: “This was the day we lost the election.” This is how some Tories see the Autumn Statement: a suicide note, wrapping a poison pill for a Keir Starmer government to swallow.

This is the alarming rate of borrowing today. Factor in the previous QE and the generous Sunak pandemic programmes when he was Chancellor:

Even now, the Government is borrowing £485 million a day – or £20,000 by the time you finish this sentence. It all needs to be repaid. And the interest we all have to pay for such debt is, broadly, treble what it was a year ago.

The new forecasts show a UK Government expecting to pay £484 billion in debt interest over the next five years – almost £300 billion more than was expected this time last year. This year alone it’s £120 billion, twice last year’s sum.

This extra £60 billion has had to come from somewhere. It’s enough to double the size of the military, treble the police force or rebuild every school or hospital. But instead it is dead money, servicing an old debt – and things need to be squeezed to make room for it. For years, Tories wrote cheques, for HS2 and more, barely thinking about the cost. Now the bill has landed.

Nelson doesn’t mention the number of times long-serving Conservative backbenchers warned Sunak over the past two years that the bill would come due, but I saw them in parliamentary debates being duly ignored. To Sunak, those men were mere Thatcherites, so last century. Rishi told us we could borrow with little consequence. Not so.

He created a lot of our current problems and campaigned in August that he would be the candidate to get us out of this situation.

Now he is No. 10, just as he wanted to be from the beginning:

Sunak can’t be blamed for the debt interest. But he might have been expected to have better ideas of how to get out of the mess.

Of the Autumn Statement, Nelson writes:

Liz Truss said her message was “growth, growth, growth,” but Sunak’s seems to be “brace, brace, brace”. A massive fiscal impact lies ahead, he says – and our mission is to recognise it, make our peace with it, and accept that talk about a low-tax future is futile. So his Autumn Statement did not kick-start a recovery. It was, instead, a requiem for growth.

Of the August leadership campaign, he reminds us:

During the leadership debate, Truss was asked what advice she would give to Sunak. Don’t be so fatalistic, she told him. Don’t go along with narratives of decline. She had a point. Groundless optimism ended her premiership very quickly, but groundless pessimism can also be deeply damaging.

Nelson wonders how a government can so quickly discount its people:

A million more Brits, for example, are expected to join the 1.7 million already claiming disability or health-related benefits over the next five years. They will, in turn, join the 3.5 million others on out-of-work benefits. Was it so unreasonable to hope that this number might go down, with people helped back to work? We’ve been promised a review into all this, but not much else.

Another assumption is that most of the 400,000 who have dropped out of the economy since the pandemic started, citing long-term sickness, will never work again. It’s hard to find many other countries giving up so readily on such a stunningly large chunk of the population.

Is a uniquely British malady at work here? Or is the real problem a kind of Tory fatalism, where an exhausted governing party thinks the country is now too old, too sick or simply too workshy to get back to where it was in January 2020?

Many conservative voters said at the time that Rishi’s furlough scheme was a bit too helpful — and we were paying for it.

Now we are paying even more for it.

Nelson concludes:

the risk is that voters make up their mind now – and associate Toryism with chaos, broken promises and a general counsel of despair. Labour just needs to promise to do things better. As things stand, it’s not a very high bar.

Feeling fleeced yet?

The Telegraph‘s editorial warned, ‘Hard times ahead for British taxpayers’:

Unlike the tumultuous response to Kwasi Kwarteng’s unfunded growth measures in September, the market reaction was muted, which is precisely what Mr Hunt hoped for, even if the pound fell against the dollar amid forecasts of a year-long recession …

… benefits and the old age pension will rise in April by 10.1 per cent, the inflation rate in October.

This continues a trend of recent years whereby working people are expected to pay more in tax to protect social programmes that successive governments have been reluctant to reform. Although headline tax rates have not risen, the extended freeze on allowances at a time of double-digit inflation is a serious hit to the incomes of millions who will be dragged into higher bands. Some three million earners will pay income tax for the first time.

This year will see the sharpest fall in living standards on record, while the tax burden rises to its highest level as a share of GDP in decades. More than 47 per cent of national income will be spent in the public sector. In fact, spending will actually rise in real terms. The cuts are to planned budgets.

Rishi Sunak and Mr Hunt consider this social democratic approach to be fair and compassionate, closing off attack lines from Labour as a general election approaches. But there are consequences for the long-term well-being of the country if working people and businesses feel they are being fleeced to prop up failing public services and a benefit system in need of a drastic overhaul.

Essentially, the productive part of the economy is being squeezed to prop up the unproductive. The problem Mr Sunak faces is that, by 2024, the Conservatives will have been in office for 14 years and they need to offer voters a better slogan than “Labour will be worse”. In fact, Labour would support many of the measures in the Autumn Statement, from loading more tax on the wealthy to increasing windfall taxes on the energy companies.

ministers need to prepare for the worst and could proactively address the biggest drags on the economy, above all the NHS, social care and welfare benefits. The health service continues to soak up huge sums – with another £6 billion announced yesterday – and yet produces worse outcomes. Its shortcomings are causing problems throughout the economy, with treatment backlogs contributing to acute manpower shortages which the Government intends to fill by increasing immigration.

The Spectator‘s political editor James Forsyth, a close friend of Rishi Sunak’s, explained in The Times why this recession is different to previous ones and why we need more people in the workforce. I hope his friend pays attention to this:

One bright spot amid the gloom is the unemployment rate, which is just 3.6 per cent, down from 3.8 per cent this year. This is close to historic lows. But even this glimmer is tarnished. The low unemployment number disguises how many people have left the labour force: one in five working-age Brits are economically inactive, meaning they are neither in work nor looking for it. More than five million are claiming out-of-work benefits.

The recession may last a year, perhaps two — but it will be different. Unemployment, as formally defined, won’t exceed 5 per cent even during the worst of the downturn — in the 1980s it went into double digits. Seldom have there been more vacancies in the economy. It’s an odd form of recession where almost anyone who wants a job can find one, but that’s the situation we’re in. Almost every month, the number of those not looking for work grows: it jumped by 169,000 in the three months to August. That is more than the population of Oxford.

This has consequences. The OBR thinks the cost of health and disability benefits will rise by £7.5 billion — quite a sum. A shrinking labour market is also one of the reasons why the Bank of England thinks potential growth is now a mere 0.75 per cent even in 2024-25. The Tories desperately need to get back to moving people from welfare into work — not just to reduce the welfare bill but also to boost the economy

Alongside those not in work nor looking for it, there are 970,000 people on Universal Credit who are working very limited hours in an economy where employers are offering shifts. Hunt announced that about 600,000 of them will now be required to meet a work coach to try to increase their hours. This signals a return to Tory welfare reform …

to ensure taxes don’t need to keep going up indefinitely, two things are needed. The first is a renewed emphasis on public-sector reform. The Tory mantra used to be more for less from public services. But in recent years, it has felt like the opposite is the case. As the Institute for Fiscal Studies pointed out this week, the NHS has more money and more staff than it did before Covid yet is treating fewer people on the waiting list. This needs reversing if the tax burden is not to continue climbing ever higher.

The second is the economy needs to grow. Meat needs to be put on the bones of the growth agenda that Sunak and Hunt set out this week, with further incentives for businesses to invest.

After the debacle of the mini-budget, this autumn statement was always going to be about steadying the ship. Yet satisfying the markets is a necessary but not sufficient condition for a successful government. Sunak and Hunt must now deliver on public service reform, moving people from welfare into work and getting more out of the health and education budgets.

The Telegraph had more on the parlous state of the NHS, despite more taxpayer money being dumped into it, all for nought:

An analysis by the Institute for Fiscal Studies shows the health service in England carried out 600,000 fewer procedures in the first nine months of 2022, compared with the same period in 2019.

The NHS’s budget rose from £123.7 billion in 2019-20 to £151.8  billion in 2022-23, with the extra funding tied to a target of increasing elective hospital activity by 30 per cent compared with pre-pandemic levels. This will not only be missed but matters have worsened. Why is no one being held to account?

Record sums have been poured in for years, yet there is now a waiting list of more than seven million patients. Working practices remain stuck in the past, with consultants complaining that hospitals are “like the Mary Celeste” at weekends, while most GP surgeries are only open on weekdays, pushing patients to overstretched A&E services.

The NHS unions are not helping in their demands for more money.

The article concludes:

There is something fundamentally wrong with the NHS which politicians must confront before it crashes and brings the rest of the economy down with it.

Hunt puts economic hope in migrants

It seems the OBR, a quango started by the Conservative Chancellor George Osborne and staffed by Labourites, has convinced Jeremy Hunt that he should increase our already heavy migration levels to boost the economy.

That’s a left-wing idea that has never worked.

Home Secretary Suella Braverman will oppose that, but can she succeed? Only a few weeks ago, a 90-minute argument with Liz Truss and Hunt resulted in Braverman’s resignation. Her security violations were a likely smokescreen for what really happened.

The Telegraph reported:

Jeremy Hunt is relying on a surge in net migration to more than 200,000 people per year to help deliver economic growth as he oversees a sharp rise in the tax burden to its highest ever peacetime level.

The Office for Budget Responsibility (OBR) predicted net migration – the numbers entering the UK minus those leaving – will be 224,000 next year, before gently declining to settle at 205,000 a year from 2026 onwards.

This is dramatically higher than the OBR’s March estimate, when it predicted that net migration would be between 139,000 and 129,000 in the same years, some 80,000 lower.

It is also significantly higher than the long-term “ambition” of Suella Braverman, the Home Secretary, to reduce net migration to below 100,000 – similar to the target of Theresa May, one of her predecessors in the post.

The increase in migrant labour will help to buttress Britain’s economy as Mr Hunt imposes higher taxes on earnings, jobs and investment. The OBR said that an increase in migration would help add to the potential size of the economy.

However, rising costs from tax are creating “growing disincentives to work”, reduce business investment and depress wages, according to the OBR itself.

Business groups were even more damning. The Chancellor talked a lot about “hard work” and “fairness” in his Autumn Statement. But workers, entrepreneurs and businesses have been left to pick up the bill to keep Britain’s welfare state on the road.

The OBR are being deeply irresponsible in advocating city-sized populations coming from abroad each year.

Where will these people live? How is our infrastructure — medical facilities, schools, water supply — increase to meet this demand year upon year?

Anyone travelling by Tube can pick up a copy of the Evening Standard to read about how many British twenty-somethings in London cannot find a room to rent. In many cases, there are 100 of them chasing every available room. The Standard interviews them. Their stories are heart-breaking. These young people are signed up to every rental app, to no avail.

Council tax increasing

On top of all of this, The Times reported that Hunt has given the green light to councils to increase council tax:

… the chancellor announced “more council tax flexibilities”, enabling councils in England to raise council tax by 3 per cent a year (up from 2 per cent) from April 2023 and increase the adult social care precept by 2 per cent a year (up from 1 per cent) without having to hold a referendum — leaving councils free to raise the tax by up to 5 per cent next year.

Their article has charts of various council tax rates and offers this example:

If they decide to increase council tax by the full 5 per cent, council tax band D payments would rise by £115 from £2,300 to £2,415 a year in Rutland in the East Midlands — the local authority with the most expensive tax bills in England — while in Westminster in central London, the cheapest authority, they would increase by just £43 from £866 to £909 a year.

Short takes

The Telegraph has an article on winners and losers from the Autumn Statement. There are only two groups of winners: housebuyers and pensioners/benefits claimants.

The Guardian interviewed some of Hunt’s constituents in leafy South West Surrey. They are unhappy with him as MP and are equally unhappy with the Government.

Guido Fawkes’s sketchwriter summed up Hunt’s announcement as follows:

What was the job of the day? To persuade the markets that all was under control. That debt-to-GDP would fall in reasonable time, that things would get back to normal in his cool, technocratic, managerial hands.

It’s what we all need, to believe that someone knows how things work and that they know what they’re doing. That there is such a thing as “sound money”. That the great, communal hallucination of financial reality may be preserved.

In Guido’s view, the Chancellor did exactly that. (Pound crashes, housing market collapses, the global financial architecture disappears into the Pacific Trench)

The readers’ comments near the end of that post have to do with the raw deal Liz Truss got. Here’s the exchange:

I find it impossible to believe that Liz Truss did so much damage in a couple of weeks with a mini budget which was never even enacted to require today’s grotesque socialist budget. Hunt and Rishi must be following an ideological policy and using Truss as their excuse.

Yes, she’s been made a convenient scapegoat by the WEF shills, to cover all their earlier and current mistakes and wrongdoings.

She went too far too fast and, by doing so, gave the one nation Tories and SunakHunts the opportunity to bring her down. The real villains are Sunak and Bailey [Bank of England governor] with their money printing and inflation denial. We are paying for their mistakes.

She didn’t go too far too fast. That is the Conservative spin. The Socialist spin is that she crashed the economy. It was cautious and a promising start, a direction of travel being set, nothing more – except for that huge two year package on the gas bills which was pure socialism and not mentioned by anyone.

The true Conservative spin is that, as an experienced Cabinet minister, she didn’t scan the political and financial hinterlands and underestimated the faux Conservative forces ranged against her. Once she u-turned she was done for.

On another of Guido’s posts, a reader posited that this is all about reversing Brexit:

The champagne socialist billionaire Rishi Sunak and arch remainer narssisist Jeremy Hunt have nailed the final nails in the socialist party AKA as the Conservative party coffin. They will be wiped out at the next GE for a generation. They want to tank the economy and make everyone feel financial pain so they can say BREXIT didn’t work. They will then seem to come to the rescue with every excuse on the planet and join us up first to the single market and customs union. Then kicking and screaming back into the EU. Why do you think they staged this remainer coup and got rid of Truss? The Truss budget of low tax, high wages, high growth, low government spend and the scrapping of the 2300-3000 EU laws retained on the UK statue book would have taken advantage of BREXIT and boosted the economy. They could not allow that to happen. They want to ditch plans to scrap the EU laws as that will make it harder to leave. They have folded on the NI Protocol and leaving the Jurisdiction of the ECHR. Why? Because they want to rejoin. We now are having forced on us a low wage, high tax, low growth, high government spend economy that will cripple most people financially and small businesses. Who wants to invest in the UK now?

On that note, another reader posted a photo of Hunt and Sunak sharing a laugh, with this fictitious caption:

Hunt: Told you you didn’t need the support of the members.

Sunak: Yes, it was so easy to stab Truss in the back, too. Who needs democracy?

What taxpayers can do

All is not lost for taxpayers. There are ways to mitigate the effects from Hunt’s statement.

Anyone who needs to cut back on food costs, protein in particular, should start eating eggs, which are cheap and the best source of protein around. Supposedly, they’re in short supply, but I bought a dozen only yesterday.

The Telegraph has an excellent article on various egg preparations, whether sweet or savoury. It’s well worth reading.

The paper also has a helpful article about what taxpayers can do to mitigate Hunt’s raid on their money. Some will require advice from a financial planner. The most important tip is to get one’s capital gains in order and start liquidating shares or funds to put into an ISA — a process called ‘bed and ISA’ — without exceeding the CGT thresholds. This has to be started well before the end of the 2022-23 tax year in April, when the current capital gains threshold of £12,300 expires and becomes £6,000 for one year, then £3,000 the year after that.

Good luck!

As I need something positive to think about while awaiting Chancellor Jeremy Hunt’s awful budget on Thursday, November 17, here is a retrospective on Liz Truss’s rise to power, however short-lived.

The Conservative Party leadership campaign dominated the latter half of July and all of August.

By Tuesday, August 16, like the Telegraph‘s Tim Stanley, I, too, had watched every hustings up to that point.

Who could have guessed that, in an extraordinary turn of events, both she and Rishi Sunak would be in No. 10 within weeks of each other?

Reporting on what happened north of the border in Perth, Stanley wrote:

The hustings had become so repetitive, I know the speeches by rote. Rishi grew up in a pharmacy, Liz sat on a planning committee. My only pleasure has been waiting for the day they cross their wires and Rishi announces he grew up on a planning committee and Liz that she sat on a pharmacy.

But on Tuesday we were in Scotland, so the script was rewritten. Lots of references to whisky, gas and Nicola Sturgeon, who Liz once said we should ignore, so Rishi said: “I don’t just want to ignore [her], I want to take her on and beat her!” Big clap for that …

“I grew up in a small business,” he said. And the cream for your burn, sir, can be found on the fourth aisle.

Liz did a much better job of showing that she knew she was in Scotland, referencing Adam Smith, JK Rowling and salmon fishing – and reminding us that she understood what poverty was because she grew up in a recession in Paisley in the 1980s (when the Tories were in power) and later in Leeds in the 1990s (ditto). 

In fairness to Liz, she meant local councils, not the Government.

The Mail highlighted the disagreement Liz and Rishi had on taxes:

Miss Truss has pledged to reverse the national insurance hike to help struggling families, but has not ruled out offering further support. But Mr Sunak said the right way to help people with higher energy bills is through direct support.

He told the hustings: ‘The tax cuts that Liz is proposing are worth about £1,700 to someone on her income. For someone working very hard on the national living wage, it’s worth about a quid a week …’

On Wednesday, August 17, the duo were in Northern Ireland, where, yes, there is a Conservative Party. It has around 600 members. I had no idea.

The Guardian had unearthed an old video of her saying that the British weren’t very good workers. The Mail said that she defended her remarks to the press in Northern Ireland:

Pressed by reporters in Northern Ireland today whether she believes British workers are not working hard enough, Ms Truss replied: ‘What I believe is that we need more skills in our country, we need more capital investment in our country, we need more opportunity in our country. That is what I would deliver as prime minister …

She added : ‘I’m fundamentally on the side of people who work hard, who do the right thing. Those are the people I want back.’

Conservatives did not object to Liz’s views (emphases mine):

Despite the furore, Ms Truss was delivered a major boost today with the latest ConservativeHome poll showing she is firmly on track for victory on September 5. She was 60 per cent to 28 per cent ahead of Rishi Sunak in a survey of activists.

The Belfast hustings was the only uncomfortable one of the campaign. It was clear neither candidate had any grasp of Northern Ireland or people’s concerns:

The furthest Liz could connect with the small group of Conservative members was to say that she knew that a ‘woman is a woman’, for which she received applause (somewhere around the 12-minute mark). Near the end of her Q&A, a man expressed concern about abortion, which was foisted on them by Westminster. He asked about the fairness of that, since Northern Ireland has its own Assembly. She bristled at the question and brusquely replied that all the devolved nations had to have the same health policies (somewhere between 32 and 35 minutes in).

Rishi’s intro and Q&A followed Liz’s.

The London Evening Standard had an excellent report from Rebecca Black following the hustings at the Culloden Hotel on the outskirts of Belfast:

The Brexit protocol, the Stormont Assembly, the health service, abortion, foreign policy and support for the party in Northern Ireland were among the issues raised …

Martin Craigs said he remained undecided after hearing their pitches.

He said he felt their content in terms of Northern Ireland had been “very weak”.

“They’re sitting on the fence, this isn’t the audience they’re playing to, the audience they’re playing to are the 160,000 Conservative members, and there are very few of them in Northern Ireland, but they obviously have to go to all corners of the UK to be seen to be democratic,” he told the PA news agency.

“I might actually not vote at all because I think the performance has been so poor.”

Matthew Robinson, chairman of the Northern Ireland Conservatives, welcomed the candidates’ visit and paid tribute to the commitment they were showing to the region.

He said he had been holding back on deciding who to vote for, but based on what he heard at the hustings he would back Ms Truss.

“I think she outlined an unwavering commitment to what we do locally here as a political force,” he said.

“I’m not just encouraged but excited about what we can achieve together during her hopeful premiership.”

David Trimble’s widow said that, just before he died, he wanted to make sure he voted for Liz. Lord Trimble had originally been a member of the Ulster Unionist Party (UUP) but became a Conservative in 2007. The following year, a voting alliance was created between the UUP and Conservatives in Northern Ireland.

The Standard reported on Lady Trimble’s article in the Telegraph in which she supported Liz. The Stormont Assembly has not been meeting for several months now:

The powersharing structures Lord Trimble helped create in the landmark 1998 agreement are currently in limbo, with the DUP blocking the creation of a governing executive in protest at Brexit’s Northern Ireland Protocol.

Lady Trimble wrote: “I believe that in this contest, Liz Truss has the best record and a viable plan to protect our Union and Northern Ireland’s integral place within it.

“I know David thought the same.

“One of the last things he did before we lost him was to ask his son to collect his voting papers so he could vote for Liz.

“He was adamant that she was what the country needed and I agree.

“She has already proven her resolve and bravery in the face of opposition to our most valuable asset, and I am confident that my husband’s legacy, peace in Northern Ireland, will be safe with her.”

Lady Trimble, born Daphne Orr, is an academic who served as a member of the Equality Commission for Northern Ireland and the Northern Ireland Human Rights Commission.

Another article in the Standard showed that Liz understood the difficulty with the post-Brexit Protocol:

The Foreign Secretary also said she would not accept any compromises on a renegotiated Northern Ireland Protocol as prime minister if it meant key UK demands were not met.

She made the comments during a visit to Belfast, where she and Rishi Sunak were quizzed by Tory members during a hustings event.

She told party members that until the Northern Ireland Protocol is sorted, Stormont will not be back up and running.

The Standard‘s Rebecca Black wrote a separate article on the abortion question:

Abortion laws in the region were liberalised in 2019 in laws passed by Westminster at a time when the power-sharing government at Stormont had collapsed.

During a Conservative Party leadership hustings event at the Culloden Hotel on the outskirts of Belfast, Ms Truss was asked if she would abolish abortion in Northern Ireland, “ending infanticide”, or let the people of the region have their say on the issue.

She responded to applause [for the man, not her]: “I’m afraid I don’t agree with you.

“We are a United Kingdom and we need all of our laws to apply right across the United Kingdom – that is what being a union is.”

Rishi’s highlight of the hustings was about Liz’s £50 billion black hole:

Rishi Sunak has warned that Tory leadership rival Liz Truss’s tax plans would add £50 billion to borrowing while failing to give direct support to the most vulnerable in society, as the cost-of-living crisis deepened.

The former chancellor said the Foreign Secretary would be guilty of “moral failure” if she does not focus on the nation’s poorest, and warned her policies could further stoke inflation.

Ms Truss instead insisted “taxes are too high and they are potentially choking off growth”, as she promised an emergency budget to tackle the situation.

On Thursday, August 18, the eminently sensible Lord Moylan told GB News that he was voting for Liz because Rishi’s economic plans did not make sense:

On Saturday, August 20, Sir John Redwood MP criticised the pro-Rishi media:

Redwood laid out his Thatcherite economic plan for Liz in that day’s Telegraph:

Britain’s fiscal rules should be ripped up by Liz Truss if she wins the Conservative leadership race, one of her key allies has said.

Sir John Redwood, who served as the head of Margaret Thatcher’s Downing Street policy unit and is tipped to return to government if Ms Truss wins, said she should abandon the practice of targeting a set percentage of GDP for national debt and the deficit.

He also called for a review of both the Bank of England and Office for Budget Responsibility (OBR), and suggested the Foreign Secretary should be inspired by Mrs Thatcher in removing utilities and transport from state control.

Since 1997, fiscal rules have been announced by chancellors during Budget statements in an attempt to control government spending.

They usually set a restriction on the proportion of national debt or deficit as a percentage of economic output.

But in an interview with The Telegraph, Sir John said the practice is a hangover from EU fiscal regulation agreed between member states at the Maastricht conference in 1992, and does not encourage economic growth or limit inflation.

“I think having a fiscal rule, which is a variant of state debt as a percentage of GDP, and the public deficit as a percentage of GDP in any given year, is not really the right couple of rules for the two targets you’re trying to meet,” he said.

The Tory backbencher said ministers should maintain “sensible controls over growth in public spending and in public debt” by instead monitoring the amount of money paid by the Treasury to lenders in interest payments.

In a coded rebuke to Rishi Sunak, who was the chancellor until last month, he added: “You have to elect governments that take controlling public finances seriously, and they then have to take them seriously.

“If you have a government that doesn’t take controlling public finances seriously, it won’t matter what your fiscal rules say, as we know from recent past experience,” he said.

Sir John is expected to be appointed as a Treasury minister in Ms Truss’s government and is understood to have helped shape her thinking on economic issues during the campaign

Sir John said he had not had “any discussions” with Ms Truss about taking a role if she wins the contest, but told The Telegraph he would accept a job if he was offered one.

The Times also thought that Liz would give Redwood a role. One campaign source said:

“There are a lot of crumpled up bits of paper. I’ve been in three meetings about the cabinet and it keeps changing.”

Among the names on the pieces of paper: Iain Duncan Smith, who is heading back to cabinet, and John Redwood, who was last a minister 27 years ago and is earmarked for a junior Treasury post.

This weekend Truss will take a team of her senior aides to Chevening, the grace and favour home in Kent which she enjoys as foreign secretary, with the aim of getting people and policies more firmly nailed down.

In the past few days she has repeatedly told her team “no complacency”. As an ally puts it more prosaically: “No f***-ups, basically.”

Sadly, Liz never offered Redwood a role. If she had, she might still be Prime Minister today.

The Times was also wrong about Iain Duncan Smith, who was not part of Liz’s Cabinet, either.

Also on August 20, the Mail‘s Dan Hodges wrote that Rishi’s campaign was effectively over because of his mansplaining:

It was the moment Rishi Sunak‘s leadership campaign started to unravel. Actually, it was one of 20 moments. ‘Please let me respond,’ Liz Truss chided, as her opponent butted in during their first head- to-head TV debate. ‘Absolutely, let Liz Truss respond,’ the BBC‘s moderator Sophie Raworth was forced to interject.

Sunak didn’t. Time and again he talked over his rival, interrupting and silencing her. It was a strategy his team seemed to think would put Truss on the defensive.

They were wrong

the damage was done. Sunak was branded a ‘Mansplainer’.

To some, this episode provided further evidence of Sunak’s poor political tradecraft. But he’d actually fallen into a well-prepared trap.

‘We were ready for him!’ one Truss campaign ally told me. ‘For years, Liz has been patronised by men who are a bit full of themselves. She’s not going to just stand there and take it.’

In 15 days’ time, Britain will have our third woman Prime Minister. And unlike her predecessors, Liz Truss isn’t going to be shy of reminding people of it.

Let us recall that only the Conservatives have had female Party leaders, all of whom were Prime Minister.

By contrast, Labour have yet to elect a woman leader.

On August 21, The Sunday Times told us what Labour-to-Conservative voters in Oldham thought of the two candidates:

If Rishi Sunak (the ferret) and Liz Truss (the budgie) had put a glass to the wall of the room in Oldham where ten swing voters gathered by Public First, all of whom voted Conservative in the last general election, were sharing their impressions of the Tory leadership hopefuls, they would have blushed. But mostly not with pride.

They had been asked to say which animal, item of clothing or single word would best describe each of the candidates (Truss was also a “bunny rabbit”, for the record). As someone who has posed for photos atop a tank and astride a motorbike during her cabinet career, she might have been surprised to hear herself described as “mumsy”, “dull as dishwater”, a “cardigan”, “Jemima Puddle-Duck” and, possibly worst of all, an “unknown”.

Sunak would have heard that he was a “suit” a “backstabber” and a “traitor” (to Boris Johnson, that is) and he would have certainly regretted wearing a pair of £490 suede Prada shoes to visit a Teesside building site as he did last month. This did not go down well at all with many of these C2DE (aka working class) voters. It suggested, said Rachel, 33, a bar worker, that he was so rich he had “no respect for money”; after all a building site, she said, is going to be messy. She said “quite a lot of people were upset” by it, especially those struggling to make ends meet. “I certainly couldn’t afford to buy a £500 pair of shoes,” she said.

Matthew, 40, who works in the oil trade, asked how Sunak could possibly relate to low-wage people. The group wondered what his PR advisers were thinking, allowing it to happen. It was quite simple, said Mandy, an educator in a prison: “If you are going to an area where . . . people are on the minimum wage, don’t wear £500 shoes.”

But there was happier news for Sunak when it came to which of the two leadership candidates they preferred. Five chose Sunak, compared with three for Truss while two didn’t know, though by the end of the discussion a couple had changed to “don’t know”.

Sunak, according to those who picked him, had a higher profile due to the furlough scheme during lockdown. Jodie, 33, a school administrator, said she associated him with helping people during that period. “I had never heard of Liz Truss before this race, but Rishi Sunak . . . we’ve seen him in action. He’s helped out, like, working class people.”

Mandy, however, who chose Truss, said the foreign secretary had been growing as a force in the “background” for some time now. She mentioned the “scandals” involving Sunak. This was a reference to a recent video in which he boasted to Conservative party members in Kent of taking money from deprived urban areas in order to give it to other parts of the country

That day, Guido Fawkes revealed that Rishi’s team broke down Liz’s £50 billion black hole, which is actually tax savings.

Even now, with Thursday’s Rishi-Hunt budget in view, Guido still appears to be correct in his assessment:

Guido also thought that the Conservatives would win the next general election:

Guido’s post has Rishi’s breakdown of Liz’s black hole. This is Guido’s analysis of Liz’s savings for the taxpayer (emphases his):

According to figures just released by the Rishi campaign, taxpayers will get a net saving of £48.3 billion in reduced taxes under Liz as Prime Minister compared to Rishi. This is a similar figure to calculations made by the Guardian newspaper. This is intended to be an attack line, the argument Rishi is making is that Liz will have to choose between tax cuts or handouts. When you consider that this is equivalent to some £2,000 per taxpayer you will understand what Liz means when she says she wants to “help people in a Conservative way”

In the Rishi campaign’s press release the tax savings are described as “costs”. This approach hasn’t been seen since 2010, when Gordon Brown would point to any tax saving proposed by the opposition and demand to know from Cameron and Osborne what spending would be cut. It is a mindset that considers the public’s money to belong to the government and any income not taxed to be a “cost”. Guido’s not sure why Liam Booth-Smith, Rishi’s policy guru, ever thought this orthodox Brownian line of attack would appeal to Tory members…

By Monday, August 22, with a week and a half left to go in the seemingly endless campaign, Rishi’s poll ratings were tanking.

The Guardian warned that Labour found that Liz could boost the Conservatives in the polls, which Labour had been leading for several months by that point. They still are in the lead.

However, the paper said that any poll boost would be short lived:

Tory leadership frontrunner Liz Truss could give the government a double-figure bounce in the polls once she is installed in No 10, according to internal Labour analysis.

A memo drawn up by Keir Starmer’s director of strategy, Deborah Mattinson, claimed the foreign secretary could dramatically improve Conservative fortunes.

The document, dated 18 August and leaked to the Guardian, comes amid speculation that Truss could be tempted to capitalise on the upswing and call a snap general election.

However, the research also suggests that any improvement in the government’s position could be very short-lived, with voters already concerned about aspects of Truss’s character.

“Our focus groups suggest that as voters get to know Truss better they like her less,” it says. “Serious negatives – untrustworthiness, inauthenticity, U-turns, lack of grip – are starting to cut through suggesting that any bounce may be very short-lived.”

Meanwhile, Rishi allegedly scoffed at the idea he would take a post in Liz’s Cabinet. That day, The Times reported on his interview with BBC Radio 2:

Truss has said that she would offer Sunak a cabinet job if she were to win. The Times reported at the weekend that she is considering asking him to become health secretary.

Sunak appeared to scoff at the prospect today, however, suggesting he did not want to serve in a cabinet in which he and the prime minister would disagree on “the big things”.

Liz’s poll results were buoyant. An Italian firm, Techne, cut their teeth in the UK on this campaign:

In the end, the result was much closer, although Liz still had a clear majority.

However, on the same day, a GB News Peoples Poll (Peoples Poll being the name of the polling organisation) showed that Britons overwhelmingly prefer Labour’s Keir Starmer as the next Prime Minister, viewing Liz Truss as ‘untrustworthy’:

A poll exclusively commissioned by GB News has found that British people would prefer Keir Starmer to be Prime Minister over both Rishi Sunak and Liz Truss.

41 percent of the 1,235 Brits polled said they would be more likely to vote for a Labour Party led by Keir Starmer than the Conservatives led by Liz Truss, who received 22 percent of the vote.

And Rishi Sunak, also standing to become the next Tory leader and Prime Minister, only fared one percent better than Ms Truss when compared with Sir Keir, who received a share of 40 percent of the poll.

In both cases, 28 percent of people said they didn’t know who they would prefer, with nine percent preferring not to say.

The results raise questions about the popularity of both candidates, with the Conservatives faring better in a straight contest with Labour.

When asked which party they would vote for if there was a General Election tomorrow, Labour came out on top with 31 percent.

But the margin between the two parties was a lot smaller than between the leaders, with 20 percent voting Conservative

When asked to give one word they associated with Liz Truss, Brits’ top answer was “untrustworthy”.

Unfortunately for Ms Truss, second most popular answer was “useless”, with the even less flattering “idiot” in third.

On Monday, August 29, the anti-Liz media went into a tizz when she declined an interview with the BBC’s Nick Robinson.

The Telegraph reported:

Liz Truss has pulled out of a BBC interview with Nick Robinson because she can “no longer spare the time”.

Ms Truss, the Tory leadership front-runner, committed to the primetime sit-down interview with Mr Robinson, who presents the Today programme, on Aug 18.

But the Foreign Secretary now appears to have changed her mind as the race to succeed Boris Johnson enters its final week. Rishi Sunak, her leadership rival, was interviewed by Mr Robinson on Aug 10 …

Mr Sunak has taken part in nine one-on-one broadcast interviews throughout the leadership campaign, including three appearances on the Today programme.

Ms Truss has done two such interviews, including the Today programme, when she was interviewed at the start of the head-to-head stage of the contest, and the People’s Forum show on GB News.

A bigger controversy that day was that Liz was preparing to cut VAT. She never did, but someone should, because VAT is an EU law. Here is smoked salmon king Lance Forman’s wise opinion, saying that the people who object to a VAT cut are on the Left:

On the penultimate day of Conservative Party member voting, Liz pledged to revive Conservative grassroots activism, but readers of ConservativeHome were unimpressed.

One of the comments read:

This and other similar pieces of rhetoric just prove to me that it’s all about strategies to win elections rather than a coherent, well thought-out set of policies that will benefit the country in both the short- and long-term, much the same as some of the statements made by both candidates in this “leadership” election.

Surely we are capable of better?

Yes, we are capable of better.

On the last day of members voting, Wednesday, August 31, The Telegraph asked readers who should be in and out of Liz’s Cabinet.

Interestingly, everyone the readers wanted out are in Rishi Sunak’s Cabinet. Priti Patel is the only exception. And, Alok Sharma is still COP26 president, although he is not in Cabinet.

In conclusion, within weeks, we went back to the same old, same old thing.

I still have a few more items about Liz Truss to cover. Stay tuned.

November 17, 2022 will be a day of doom for the UK as the Chancellor of the Exchequer, Jeremy Hunt, lays out his and Rishi Sunak’s new economic plan.

This plan is likely to increase taxes dramatically for the foreseeable future — years, rather than months.

When Kwasi Kwarteng was Chancellor I had hope for our economic future. Regardless of what Jeremy Hunt says next week, Kwasi’s plan will be proven in the years ahead to have been the right one for the UK.

An economist explains

In an October 16 article for the Telegraph, Liam Halligan, an economist, journalist and broadcaster, explains why the Truss-Kwarteng plan was good.

Its title is ‘The trashing of Truss’s mini-Budget is an economic tragedy’.

Excerpts follow, emphases mine:

The financial and political meltdown of recent weeks has seen Kwasi Kwarteng’s proposals dubbed “radical”, “libertarian” – even “grossly irresponsible”. But that’s demonstrably untrue.

Back in September, the then-Chancellor proposed lowering the top rate of income tax from 45pc to 40pc – the level it was for almost the entire period New Labour was in office under Tony Blair and then Gordon Brown – hardly “libertarian” Prime Ministers.

Kwarteng also pledged to reverse former Chancellor Rishi Sunak’s 1.25 percentage point rise in national insurance contributions – allowing 28m people to keep, on average, an extra £330 of their earnings each year. This largely non-controversial proposal was also endorsed by Keir Starmer’s Labour party.

His Majesty’s Opposition backed Kwarteng’s mini-Budget plan to cut the basic rate of income tax from 20p to 19p in the pound from 2023, a year earlier than Sunak proposed but, again, hardly a radical move.

That means Labour fully agreed with two of the three main measures tabled by Kwarteng, amounting to £24bn out of a tax-cutting package worth around £43bn. But Starmer’s party did oppose Tory plans to keep corporation tax at 19pc, rather than increasing it to 25pc next April – a rise previously enacted by Sunak.

So the only major “irresponsible Tory tax cut” Labour didn’t support wasn’t an actual cut, but a freeze in taxation. Yet that didn’t stop Starmer relentlessly referring to “a Tory crisis, a crisis made in Downing Street”. Labour’s Treasury team, in fact, having backed almost all Kwarteng’s main measures, now wants “this entire mini-budget to be reversed”.

Well, Labour got its wish.

Since mid-October, Labour have repeatedly accused Truss and Kwarteng of ‘crashing’ the economy.

Halligan readily accuses Truss and Kwarteng of poor communcation in presenting and defending their short-lived economic plan, which they called a ‘fiscal event’, as it was not a full budget. However, he says that the policies themselves were responsible.

Halligan says:

… what was a bold, but far from irresponsible set of policy proposals has – through a combination of bad timing and woeful communication – sparked serious financial turmoil, roiling the UK gilts market, pushing up broader borrowing costs and spreading mortgage and pension panic.

It’s vital to grasp, though, that this chaos was triggered by the Government’s inept handling of its policy measures, not the measures themselves.

He makes it clear that the fiscal event was not in itself the underlying cause of the economic turmoil which followed:

while the Truss government’s actions as a whole – the policies and their disastrously botched presentation – were the catalyst behind recent gyrations of sterling and the upward movement of borrowing costs, they were not the underlying cause. To suggest otherwise is politically disingenuous. It is also fundamentally to misunderstand what is happening across global markets and why.

This mini-Budget, in total, amounts to an attempt – after a two-decade upward trend of rising UK taxation – to lower the Government’s tax take from 36.5pc to 36pc GDP.

With the state’s share of national income heading for sustained levels not seen in the 70 years since World War Two, Kwarteng and Truss were trying to put that tax share back where it was in 2021.

Halligan rightly blames the worldwide excess of QE, quantitative easing, so prevalent over the past 15 years:

What we’ve actually seen over recent weeks is just the latest stage in the long-term global shift away from a decade and more of ultra-low interest rates and excessive quantitative easing (QE). Many of the major economies, not least the UK and US, have indulged in irresponsibly loose monetary policy since the 2008 financial crisis. Initially necessary emergency measures were allowed to ossify into a lifestyle choice.

Endless QE juiced up stock and bond markets, making the rich richer while pushing the price of assets such as housing further out of reach for ordinary families. Such “extraordinary measures”, cheered on by groupthink economists, kept state borrowing costs low, paying for lockdown and allowing governments to gorge themselves on debt.

Now we are finally paying the piper for the always obvious excesses, dangers and utter stupidity of these policies. Interest rates are starting to spring back, with indebted governments, households and firms forced painfully to retrench.

Just days after Kwarteng said that the top tax rate of 45% — introduced by Gordon Brown around 20 years ago — would be removed, the media and ‘experts’ said it had to stay. Truss announced a U-turn just before the Conservative Party conference began:

That set up the chance of generating a lucrative “doom loop”, selling the pound short, then turning more profit as media outrage caused the currency to fall even more.

Halligan takes Kwarteng and Truss to task for not explaining where their economic growth would come from, which made matters worse. Recall the noise from their opponents about ‘unfunded tax cuts’.

Unfortunately, sterling is vulnerable at this time:

Britain has a big balance of payments deficit and is a significant energy importer with scant storage capacity at a time of geopolitical peril.

We have only to look at what then-Chancellor Rishi Sunak spent during the pandemic and the war in Ukraine which followed just as we thought we’d get a breather.

Halligan wrote his article the day after Truss sacked Kwarteng and replaced him with the Establishment-minded Jeremy Hunt, who immediately began rolling back Kwarteng’s reforms:

Jeremy Hunt’s tour of the TV studios on Saturday morning was a further attempt to pour oil on troubled waters as the new Chancellor raised the prospect of further tax increases and spending cuts. Its effectiveness remains to be seen.

It’s also alarming that the latest policy sacrifice has been to go ahead with a previously scrapped rise in corporation tax from 19pc to 25pc.

For tens of thousands of small and medium-sized enterprises, this is disastrous.

These companies account for over half of Britain’s GDP and two thirds of employment. They’re the engine of our economy. They were hammered during lockdown and Truss has just taken 6pc off their often thin profit margins. Many will struggle to survive.

By hiking corporation tax, Truss is harming the prospects of small businesses and alienating millions of them, many run by and employing natural Conservatives. She is also scuppering the best chance she has of rapidly achieving her “plan for growth”.

A ‘very British coup’

On Sunday, October 17, the Telegraph‘s Tim Stanley wrote ‘I resent this “very British coup”. Any Tory who welcomes it is a fool’.

Any true conservative should keep this in mind when they watch Hunt deliver his budget next week. Stanley’s subtitle reads:

Deviate from orthodoxy, and you’ll be crushed by the Remainer, ‘expert’-driven establishment

He is not wrong.

Although he did not approve of Kwarteng’s plan for its ‘policies and philosophy’, we face a perilous time ahead, especially with regard to Brexit:

Reputationally, the Conservatives are sunk. Labour will win the next election; Brexit is imperilled. Hitherto the argument against Brexit was emotional, but watch as it becomes technocratic: “in light of our political and economic turmoil”, the grey men will say, “it’s not something we can afford.”

Truss was made a whipping girl for what happened after Kwarteng’s fiscal event. Cast your minds back over the past month. What Stanley predicted happened:

… make no mistake, those hollow-men are back in charge. The imposition of Jeremy Hunt as chief executive to Truss’ chairman of the board – the language is theirs, not mine, and tells you everything you need to know about their ghastly worldview – is a reassertion of orthodoxy, revenge of the Remainers, capture by experts. British policy, you see, must always operate within certain parameters; anyone who dares to step an inch too far to the right or the left will feel the full force of the establishment. Not by sending in the army, that would be unBritish and, besides, we haven’t got an army to send – but by the removal of confidence, via the markets, the Bank, the IMF or our good friend, Uncle Sam.

Stanley rightly blames Andrew Bailey, who heads the Bank of England:

The Bank kept interest rates ridiculously low while pumping our economy with cheap money, fuelling an inflationary spiral that it now believes is the sole job of the Treasury to cure. It was Andrew Bailey, widely criticised for poor judgement, who finished off the arrogant Mr Kwarteng when, last Tuesday, he informed pension funds that he’d stop bailing them out on Friday.

Stanley perceives an anti-democratic trend that emerged in 2022:

After a few, bright years of grassroots activism and open debate – the essence of Brexit – there is pushback against democracy. This year, the Conservatives have kicked out a PM who won a landslide and then effectively imprisoned a second PM who, for all her faults, was at least elected by the members. Mr Hunt, by contrast, was beaten solidly by Boris in 2019 and didn’t even make it past the first round against Truss. He has no popular mandate.

… Comrades, we’re in for two years of painful austerity …

At least two years. I predict more.

Stanley concludes:

I am not saying there is a conspiracy afoot. There’s no need. Our system is ancient, sophisticated and surprisingly transparent. We have a way of doing things, old bean, and we make it gently inconceivable to do it any other way. This is the dictatorship of consensus.

The Establishment view

Writing for the Telegraph on the day that Truss sacked Kwarteng, October 15, Jeremy Warner said, ‘Project Fear was right all along’.

He began with this condemnation of Brexit:

Call it revenge of the Remainer Establishment, if you like. The revolution in the British economy promised by Leave campaigners six years ago finally seemed to go the way of all revolutionary movements this week: it ended up eating itself.

Downbeat predictions by the Treasury and others on the economic consequences of leaving the EU, contemptuously dismissed at the time by Brexit campaigners as “Project Fear”, have been on a long fuse, but they have turned out to be overwhelmingly correct, and if anything have underestimated both the calamitous loss of international standing and the scale of the damage that six years of policy confusion and ineptitude has imposed on the country …

Perhaps I exaggerate, but not since the humiliation of the International Monetary Fund bailout in 1976 have we seen an unravelling quite as spectacular. This too from a Tory Government with a substantial overall majority. It is scarcely believable.

Hmm …

Warner blamed ‘unfunded tax cuts’, saying that a cut in corporation tax was derisory and that, ultimately, Liz Truss would have to go:

… the fact is that Truss was in lockstep with Kwarteng in challenging “economic orthodoxy” and the institutions that were its standard bearers. On the campaign trail she was, if anything, even more of a zealot for economic radicalism than Kwarteng.

In any case, she plainly didn’t understand the sometimes destructive way markets interact with policy. It’s been a rude awakening.

Warner is grateful that Andrew Bailey intervened:

In the end, it was Andrew Bailey, Governor of the Bank of England, who brought matters to a head, by insisting that there would be no extension to the bond buying programme he had initiated to counter forced selling by UK pension funds.

This has been widely portrayed as another foot in mouth episode by a Governor with something of a reputation for gaffes. Having failed, despite all the warning signs, to see the surge in inflation coming, the Bank fully deserves whatever criticism is thrown at it. The Bank has failed to conduct itself well in recent times.

Even so, the Governor had little option but to say what he did. It makes no sense at all for a central bank, which is supposed to be tightening policy to fight inflation, to be simultaneously loosening it through resumed asset purchases …

By making the programme time-limited, the Bank was able just about to pass its intervention off as justified on financial stability grounds. It would have been game over had Bailey made the programme open ended.

Warner was clearly glad the Establishment was in charge again:

“Economic orthodoxy” is back in the saddle. But then it never really went away. Instead we had a brief aberration in which the Government, having dispensed with all sensible advice, thought bizarrely that it could defy gravity.

If it had been done differently it might have succeeded, but it was not. We’ll be paying the consequences in reduced standing and prosperity for years, if not decades, to come.

He blames Truss and Kwarteng for a short-lived plan that was never given a chance.

Note that he has nothing in his article about QE, which really will make us pay the consequences for many years to come.

The Bank of England gets revenge

The Bank of England was offended that Kwarteng never consulted them before his fiscal event.

He probably should have done so.

Perhaps he thought they would have said ‘no’.

On Thursday, October 20, The Times reported that Sir Jon Cunliffe, deputy governor for financial stability of the Bank of England, appeared before Parliament’s Treasury Select Committee:

Sir Jon Cunliffe told a hearing of MPs that Kwasi Kwarteng, the former chancellor, did not brief Bank officials before the September 23 fiscal statement, in which he announced more than £40 billion in tax cuts.

Cunliffe said the Bank had been aware of some measures that were pre-announced, but added: “We did not get the normal briefing we would get for a budget . . . This wasn’t a budget. The process was rather different.”

That’s the polite British way of saying that they were miffed.

Cunliffe also said that there were no figures from the OBR — the Office for Budget Responsibility — to back up Kwarteng’s plan. This is the same OBR that cannot predict anything accurately. The OBR were not due to make a projection until November, as I recall:

“When [the Treasury] briefs us normally on the budget, we see the Office for Budget Responsibility costings and that is what we take into account for monetary policy. But there were no OBR costings. It was a different sort of event in many respects,” he told the Treasury select committee.

However, all is well now that Jeremy Hunt is Chancellor:

Cunliffe said he expected the Bank to get a full briefing on the contents of the upcoming medium-term fiscal plan from Jeremy Hunt … The plan is expected to lay out new tax-raising measures, cuts to public spending and the government’s new fiscal rulebook, along with the OBR’s assessment …

It all sounds rather scary. This is a long-term plan to make the middle class poorer, make no mistake.

Meanwhile, global turmoil in world markets

When these articles were written, Western economies were in turmoil.

This had nothing to do with Kwasi Kwarteng or Brexit.

On Thursday, October 14, the Japanese yen had hit a 32-year low against the US dollar and mortgage rates were rising in the US:

On October 15, Germany’s inflation rate reached a 70-year high. We cannot blame Brexit, Kwarteng or Truss for that:

We are in for years of obfuscation ahead.

I am not looking forward to Jeremy Hunt, with his supercilious smile, mansplaining to us the ‘difficult decisions’ he will have to take. He is a successful businessman. He has no idea how ordinary Britons live.

Worst of all, he will lie and lie about the costs of Brexit, of this we can be sure.

As for Rishi? I don’t trust him an inch. He’s already promised billions in climate change reparations this week at COP27. Those won’t be one-off payments, either, even though they’ll be billed as such.

What about the British taxpayer? Answer there came none.

Yesterday’s post introduced the sad saga of Prime Minister Liz Truss and her first Chancellor Kwasi Kwarteng over their fateful fiscal event of Friday, September 23, 2022.

My post ended with the market turmoil and negativity up to Friday, September 30.

Many of us hoped that his plan would work. After all, the market turmoil is global, for different reasons in different Western countries.

What motivates Kwarteng

On Wednesday, September 28, Rachel Sylvester wrote an interesting profile of Kwarteng for The Times, complete with photos of him and Truss from their earlier days as MPs. One from 2013 shows them together at a book awards event and another from 2018 has them enjoying a picnic at that year’s Hay literary festival.

Excerpts follow, emphases mine.

Kwarteng was pleased with his fiscal event and believed the market’s jitters were temporary:

So sure was he of his plan that he smiled as he announced that he was abolishing the cap on bankers’ bonuses introduced by David Cameron in 2014.

Within hours the pound had tanked, but Kwarteng doubled down, promising that he had “more to come”. As the markets reacted to the UK’s biggest tax cuts in 50 years, the pound fell to a record low against the dollar. One senior figure in the City described the fiscal statement to me as “economically reckless”. Yet the chancellor did not blink, with an ally suggesting that this was just “the City boys playing fast and loose with the economy” and insisting, “It will settle.”

Although it is unclear what Kwarteng thinks today, he and Truss were allies dating back at least a decade:

At 47, Kwarteng is the same age as Liz Truss and is one of her closest political allies. Earlier this year, he moved into a house just down the road from her in Greenwich and now they are neighbours in Downing Street. His appointment as chancellor was one of the first decisions she made when it became clear that she was likely to win the Tory leadership contest. Truss and Kwarteng have been working for weeks on their “shock and awe” shake-up of taxes, including changes to stamp duty and the abolition of the top 45p rate of income tax. The blueprint has been in their dreams for years

His allies say his politics have also evolved. In 2012 the chancellor was one of a group of free marketeers – including Truss – who published a pamphlet called Britannia Unchained, which described British workers as “among the worst idlers in the world” and railed against a “bloated state, high taxes and excessive regulation”. He has since distanced himself from the controversial text.

His parents arrived in England from Ghana. Both received a first-class education and had top-flight careers:

An only child, Akwasi Addo Alfred Kwarteng was born in Waltham Forest, northeast London, in 1975. His parents had come to Britain as students in the Sixties. His father, Alfred, an economist for the Commonwealth Secretariat, was educated in Ghana at an Anglican school with a Winchester-educated English headmaster. His mother, Charlotte, a successful barrister, was an admirer of Margaret Thatcher. “It was a self-reliance thing,” Kwarteng once explained. She instilled in her son a ferocious work ethic and education was of fundamental importance to the family.

When his father was posted to Switzerland, Kwasi was sent at the age of eight to board at the fee-paying Colet Court – now St Paul’s Juniors – in southwest London. He admits it was probably too young to be separated from his parents but he not only survived, he thrived. He won a scholarship to Eton where friends recall a “lanky malcoordinated” but hard-working teenager who was determined to make the most of the opportunity he had been given.

Like Boris Johnson, Kwarteng played the wall game – a brutal mixture of football and rugby. “He’s so tall that he was a great addition to any team,” one fellow pupil recalls.

Kwarteng is not attracted to identity politics:

Kwarteng never expressed his desire to be “world king” in the way that Johnson did. “I was slightly surprised when he went into politics,” says a contemporary from Eton and Cambridge. “He wasn’t in a political activist circle at university. People sometimes think one Etonian is just like another, but Boris and Kwasi are very different. Boris wants to rule the world; Kwasi wants to solve problems, rather than just being in power for the sake of it. He’s not going to go out there to break rules. Kwasi does listen to people and wants to discuss ideas” …

Kwarteng’s 2011 book Ghosts of Empire is a far more nuanced analysis than the rose-tinted version of British history favoured by Tory traditionalists. He rejects the “sterile debate” over whether “empire was a good or bad thing” and concludes, “Much of the instability in the world is a product of its legacy of individualism and haphazard policymaking.” According to those who know him well, the chancellor is uncomfortable with “culture war” politics and describes his own philosophy as “relentless pragmatism”. One aide insists, “He is sometimes lazily pigeonholed as a ruthless, black and white free market ideologue. It is true that he is a low-tax Conservative. He’s a free marketeer, but there are occasions when the state does need to intervene.” In 2019, the chancellor told a Tory party conference event: “There’s nothing [better] to convert someone from being a radical free marketeer to seeing the virtues of government action than making them an energy minister.”

He focused on his studies at Trinity College, Cambridge:

“As a student he was charismatic and a bit chaotic,” says a friend from that time. “He was scholarly. The everyday run of things didn’t worry him. He would be immersed in his books.”

He began meeting the great and the good in the Conservative Party:

… the future chancellor was spotted by Dr John Casey, an English fellow and legendary figure among Conservative thinkers, who invited him to his dining club, the Michael Oakeshott Society. There Kwarteng met Tory politicians and journalists such as Norman Lamont, Geoffrey Howe, Norman Tebbit and Charles Moore. Casey insists it was never a political society: “It is devoted to intelligent conversation and strong views don’t go with that.

“He has a first-rate mind and a first-rate personality,” Casey continues. “He is intellectually and personally equipped to be chancellor. He’s a cultured man, an intellectual – there are very few in politics. He’s not like anybody else; he’s himself.”

After Cambridge, Kwarteng won a Kennedy scholarship to Harvard. When he finished his time there, he returned to Cambridge to earn a doctorate in economic history, after which the City of London beckoned:

He then worked as a fund manager at the bank JP Morgan and at Odey Asset Management, run by the Brexit-backing investor Crispin Odey, as well as chairing the Bow Group, a conservative think tank.

His political career began afterwards:

In 2005 he stood as the Conservative candidate for Brent East, coming third, before being elected as MP for the safe Tory seat of Spelthorne in Surrey in 2010, the same year as Truss entered politics. He spent several years on the back benches after criticising coalition policies including the help-to-buy scheme. “He’s genuinely clever, with a very strong academic, scholarly mind,” one old friend says. “But that academic, scholarly mind meant he was happy to speak out against David Cameron and George Osborne and didn’t really worry about the consequences.”

Kwarteng understands the importance of a Prime Minister and Chancellor working closely together:

For now, Kwarteng and Truss are united on economic policy. The chancellor tells colleagues that his role is to support the PM, explaining: “I will facilitate; I won’t emasculate.” One ally says, “Kwasi was completely disillusioned with the battles between No 10 and No 11 under Rishi and Boris. When No 10 and No 11 are at war, nothing works. Kwasi will deliver what the prime minister wants. She is the first lord of the treasury, Kwasi is the second lord of the treasury. That will change the entire mood and approach of government. The institutions will try to break No 10 and No 11 apart, but they underestimate the strength of the relationship between Kwasi and Liz.”

Hmm. Interesting.

British public gaslit

The last week of September was one of news about unfunded tax cuts, the Bank of England stepping in to calm the UK markets, how Kwarteng and Truss didn’t bother to communicate their economic plan and how awful everything was.

On Friday, September 30, Tom Harwood, GB News’s political correspondent and Guido Fawkes alum, put things into perspective, rightly saying that the media were gaslighting Britons:

That day, The Telegraph‘s Matthew Lynn wrote, ‘There’s no such thing as unfunded tax cuts — it’s our money’:

It is hard to imagine that three simple words could be quite so lethal. But over the last few days “unfunded tax cuts” have been held responsible for the potential destruction of the British economy, and, come to think of it, the global financial system as well.

We are told that the Government’s £45bn package of cuts announced last week have crashed the currency markets, sent mortgage rates soaring, and left the stock market to keel over and die. Any government crazy enough to even attempt unfunded tax cuts can expect to be evicted from office within days if not hours. 

Tosh. Although the phrase has become ubiquitous, we should be a lot more cautious about how we use it. In reality, tax cuts don’t need to be funded, for the same reason that staying home instead of going out to dinner doesn’t need to be ‘funded’, and nor does opting to spend Christmas with your parents rather than flying off to Mauritius need to be ‘funded’ either.

It isn’t spending. It is simply taking less of your citizen’s money. It is state spending that needs to be ‘funded’, and not its opposite – and until we get that straight, and change the language we use, we will never be able to have a grown-up debate about how to manage our economy.

If Kwasi Kwarteng had a grand for every time our broadcasters, newspapers, a think tank, or indeed a growing legion of City analysts, used the term “unfunded tax cuts”, or UTCs as we should probably call them, he’d have enough money to wade into the markets and send sterling back over the two dollar mark. The phrase probably has its own emoji by now, just to make it easier to discuss on WhatsApp (some sort of variant of the scowling face, I’d imagine).

Ever since the pound started falling modestly against the dollar on Monday – because after all “crashing” seems a slightly extreme term for a downwards correction of less than 10pcthe phrase has dominated the headlines.

According to just about every think tank, constant broadcasts from the BBC, dozens of newspaper analysts, the IMF, and just about every major City bank, not to mention a small army of retired central bankers, it was the Chancellor’s decision to cut a few taxes without announcing accompanying decisions on reducing spending that led immediately to a dramatic sell-off in sterling and a rise in bond yields that could only be controlled by emergency intervention by the Bank of England. 

A quick Google search yields 28,000 mentions of the phrase, and that is without even counting social media. According to the credit ratings agency Moody’s “large unfunded tax cuts are credit negative” while according to the former Bank Governor Mark Carney “the message of financial markets is that there is a limit to unfunded spending and unfunded tax cuts in this environment.”

And yet, in reality, we should be a lot more careful about the language we use. We can leave aside the point that the “unfunded” parts of last Friday’s fiscal package amount to no more than a few billion pounds, a trivial sum give the size of state spending, and that by far the largest part of it was made up of the energy support package that all sides of the political spectrum had been calling for. The more important point is this: we shouldn’t ever describe tax cuts as “unfunded”.

By definition a tax cut is not spending any money. It is simply a decision to take less from a particular group of people in one particular way

Next, the term ignores the possibility that tax cuts might pay for themselves

Finally, and perhaps most importantly, it concedes the argument before it has even begun. “Unfunded” is a boo word, and even more so when you put the inevitable “reckless” in front of it. The language deliberately skews opinion against a reform of the tax system. Even worse, it is used by banks and broadcasters who pretend they are staying neutral – when in reality they are anything but. 

fundamentally it is only state spending that needs to be funded – not leaving more money in the pockets of long-suffering taxpayers. If we could be a little clearer about that we might be able to have a slightly more sane debate about how much tax the government should be raising and how – instead of hysterical catastrophizing about UTCs.

On Saturday, October 1, The Sun rightly defended the Truss-Kwarteng plan, citing other Western economies’ woes:

https://image.vuukle.com/c4318e5c-ff26-463e-83e3-1b1398dfdcc3-adfb9f20-c294-49de-8b3e-378a6145c251

On Sunday, October 2, GB News’s and The Telegraph‘s Liam Halligan, formerly of Channel 4 News, was on the money when he said that the market meltdown was the fault of quantitative easing (QE):

… This week of financial turmoil has left millions frightened and angry.

While Kwarteng’s statement sparked last week’s alarming debt repricing, it was by no means the underlying cause. There are far bigger forces at play

what we saw last week was just the beginning of a long-term shift away from over a decade of ultra-low interest rates and quantitative easing. We’ve indulged in ultra-loose monetary policy since the 2008/09 financial crisis – a necessary emergency measure, which ossified into a lifestyle choice.

And now, the obvious excesses, dangers – and crass stupidity – of this policy, are coming home to roost.

Since that financial crisis, the Bank of England has created hundreds of billions of pounds of QE money, as have similarly aligned central banks, which have blown huge asset price bubbles in stocks, bonds and property.

QE has helped governments borrow cheaply, while making the rich even richer – which is why, having begun as a £50 billion temporary measure to inject liquidity into bombed-out banks, it has morphed, thirteen years on, into an £895 billion monster.

The early tranches of QE stayed largely within the financial system – so didn’t cause serious inflation. But the Covid-era variant, funding furlough and an avalanche of business support loans, has fed directly into the real economy – helping to explain today’s inflation predicament.

This is an inconvenient truth that no-one wants to admit – certainly not the likes of the International Monetary Fund and central bankers who oversaw QE. Better to blame an incoming Tory government ­– one led by a politically vulnerable Prime Minister, with only lukewarm support from her own MPs.

the idea that this “unfunded cut crashed the pound” is preposterous. Yet that is now the accepted political narrative – that a greed-driven Tory policy collapsed sterling and sent 10-year gilt yield surging as fears swirled of government insolvency, sending higher borrowing costs rippling across the economy, damaging hard-working families and firms.

What I suspect happened is that global currency traders, understanding the top tax cut was politically tin-eared, could see ministers were in for a kicking. With the Government introducing a potentially expensive energy price cap, the moment seemed right to start shorting – that is, betting against – the pound, knowing the media would pile in.

When that happened on Asian markets on Monday, and we woke to a plunging currency, I was astonished that ministers fell silent – given the strength of the arguments on their side

For now, the Bank of England’s intervention on Wednesday – buying gilts to rein in borrowing costsseems to have worked. By Friday, the pound was back where it was pre-statement, the 10-year yield having retreated from over 4.5pc to around 4.0pc.

But the City and Wall Street moneymen, having loaded pension schemes with billions of pounds of debt, yet again have the upper hand – effectively forcing the UK authorities to restart the QE asset-boosting machine. This cannot end well.

“Tory tax cuts”. It’s such an easy and convenient scapegoat. The truth is we’re in for a sustained period of painful adjustment – one which our political and media class must urgently start to explain.

The Times‘s Robert Colvile pointed out the global aspects of market turmoil, driven in part by the United States:

The markets were already primed to punish the UK, he [Albert Edwards of Société Générale] argues, because of the Bank of England’s decision the previous day to raise rates at a slower rate than the US and to keep trying to dispose of the assets accumulated under quantitative easing. So Kwasi Kwarteng’s decision to throw in a few more tax cuts just gave an extra push to a boulder that was already rolling

Admittedly, the attempts of some in government to blame last week’s rout in the markets entirely on global factors strained credulity. But they did have the core of a point. A year ago the Bank of England believed interest rates would stay below 1 per cent. A month ago they were set to top out at 3 per cent. By the time Kwarteng got to his feet, the expected peak had risen to 5 per cent — soaring over 6 per cent at the height of last week’s panic.

Now, some of that rise in September was probably due to anxieties about the new government. But it was also driven, yes, by global factors — in particular decisions made in Washington. Even if Kwarteng had replaced his planned statement with a lusty rendition of the Marseillaise, mortgage-holders would still be facing eye-popping jumps in interest rates. For example, at that 6 per cent rate a typical UK mortgage would, according to the Resolution Foundation, cost an excruciating £4,800 a year extra — but £3,800 of that was already on the way before Friday’s speech. The age of cheap money is over not just for Britain but for everyone.

Over the past three years, a number of conservatives must have wondered why Boris Johnson never delved deeper into economic policy. A letter to The Telegraph gives a possible explanation — global forces at work:

SIR – It takes great strength of character and conviction to stand up and face a baying mob, especially a political one. Liz Truss and Kwasi Kwarteng have my admiration.

I always wondered why Boris Johnson did not attempt to enact some of his early policies after Brexit, for which he had great public support. Perhaps he understood how the pro-EU and socialist contingents in Parliament and the wider political world would react, and was fully aware of the force that would be against him.

I wish Ms Truss and Mr Kwarteng good luck. They have shown enough courage in their beliefs to see this challenge through.

Conservative Party Conference

The Conservative Party Conference opened on Sunday, October 3, in Birmingham.

That day, The Times reported that Kwarteng had requested Cabinet ministers to cut expenditure in their respective departments:

Kwasi Kwarteng has told ministers to make cuts in their departments and warned them “we have a duty to live within our means”.

The chancellor has asked cabinet ministers to send him their “proposals to support growth” by the end of the month.

He is also launching a reprioritisation, efficiency and productivity review across the public sector, which will re-examine “existing spending commitments” and repurpose budgets to deliver the government’s “core priorities”, including growth.

I wrote about the conference, including Truss’s and Kwarteng’s U-turn on abolishing the 45% tax rate, the prominent Conservative MPs in disarray, the rebels and Truss’s closing speech.

On Monday, October 3, the duo pulled out of a fringe event, which cost £3,000 a ticket:

Nigel Farage, looking on from the outside, predicted a Labour rout in the next general election:

Meanwhile, Guido Fawkes kept us apprised of market movements, which weren’t nearly as alarming as expected that week:

He rightly criticised Labour’s shadow chancellor Rachel Reeves for stirring the pot unnecessarily:

On Wednesday, October 5, as the conference closed, Guido wrote (emphases his):

The Bank of England has been easing off its interventions in the gilt market, leaving Rachel Reeves’s hyperbolic attack lines exposed for their inaccuracies. Julian Jessop points out the fact the Bank did not have to buy any gilts again today, leaving total purchases stable at £3.66 billion. A tad short of the £65 billion she repeatedly claims. This is a further sign market jitters have been effectively mitigated, far from Labour’s claims of an “economic crash”. As a trained economist and former Bank of England employee, Rachel really must know better. Her sums were out by a factor of 17…

At the weekend, while anti-Conservative pundits were still banging on about the 45% tax rate, which Truss and Kwarteng did a U-turn on …

The Telegraph‘s Ambrose Evans-Pritchard pointed out that gas prices were already falling, indicating that ‘Liz Truss may be winning her gamble on the energy price cap after all’:

Plummeting global gas prices have slashed the cost of the UK’s energy price cap and may ultimately reduce the monthly subsidy to zero, greatly alleviating the strain on Government borrowing.

NatWest Markets estimates that the price guarantee would cost approximately £30bn over the first six months based on current futures contracts, half the £60bn figure assumed by the Treasury and the rating agencies …

While NatWest remains wary of gilts after the mini-budget and the bond shock last month, it said pessimism over the UK’s public finances may have gone too far. Gilts may no longer be a one-way bet for traders

Goldman Sachs thinks European wholesale prices may fall a further 40pc by late winter. Average energy bills in the UK would in that case fall to £2,000 or less.

The Government could put its cheque book back in the drawer.

Douglas McWilliams, from the Centre of Economics and Business Research, says that the public finances are in better shape than widely-supposed.

An odd week that began well

By Monday, October 10, things appeared to be looking up for Truss and Kwarteng.

Mel Stride MP, chairman of the Treasury Select Committee and not one of their best friends, was satisfied that the then-Chancellor agreed to review his economic plan on Halloween rather than in November:

Tuesday, October 11, was a red-letter day.

The head of JP Morgan said that Truss deserved a chance:

Guido wrote:

… Speaking last night from London with US broadcaster CNBC, Dimon backed Liz’s tax plans and hammered home the need for laser-like focus on growth – adding he’d “love to hear that out of their mouth every time a president or prime minister speaks”…

It’ll take time to execute the policies and kind of drive growth and what’s important … [but] there’s a lot of things the UK has going for it and proper strategies to get it growing faster … then it can accomplish some of the other objectives it wants to accomplish too […] I would like to see the new Prime Minister, the new Chancellor, be successful […] I think every government should be focusing on growth. I would love to hear that out of their mouth every time a president or prime minister speaks.

Another proud member of the Pro-Growth Coalition. Although he did warn the US will likely tip into recession in about 6 months…

The IMF did an about-face, as The Telegraph reported:

Kwasi Kwarteng’s tax cutting mini-Budget will help Britain to be the fastest growing major economy this year at the cost of higher long-term inflation, the International Monetary Fund (IMF) has said.

Strong momentum at the end of 2021 means UK economic growth will outpace the rest of the G7 this year. Tax cuts announced in the mini-Budget are expected to lift it even higher than the IMF’s current forecast of 3.6pc, which was published on Tuesday but finalised before the Chancellor announced his plans …

The paper‘s Ambrose Evans-Pritchard wrote, ‘Rejoice: we may be very close to Fed capitulation’:

Not only is the Fed rushing through jumbo rises of 75 points each meeting, it is also draining global dollar liquidity with $95bn a month of quantitative tightening (QT). It has never done the two together before. And it does not understand how QE/QT actually works, as admitted cheerfully by one Ben Bernanke, Nobel Prize laureate as of yesterday …

Ben Bernanke flagged the dangers of a strong dollar and the capital exodus from emerging markets yesterday. Without naming the British gilt market, he said financial stress in the international system was building up and posed a threat. “We really have to pay close attention,” he said. 

On Wednesday, October 12, it was noted that a Federal Reserve hike in interest rates took place before Kwarteng’s economic statement:

Furthermore, the US was also experiencing an unusual increase in mortgage rates, meaning that the UK was not the only country with that problem:

On Thursday, October 13, Truss had her weekly meeting with King Charles, who greeted her with ‘Dear, oh dear’ while the press were there:

What did he know?

He would have heard Foreign Secretary James Cleverly defend Truss and Kwarteng on that day’s news round. The poor man.

The Telegraph has a running diary of what went on that morning. This is the summary:

James Cleverly has warned it would be a “disastrously bad idea” to replace Liz Truss as Prime Minister.

Ms Truss is under intense pressure from some of her own MPs to abandon her economic plan following a market backlash to the measures set out in the mini-Budget.

The Prime Minister’s leadership is being questioned after little more than a month in the job, with some Tory MPs already considering who could replace her.

ConservativeHome‘s editor Paul Goodman was also on the airwaves. He told BBC Radio 4 that some Conservative MPs had suggestions for Truss’s and Kwarteng’s replacement:

The former Tory MP told BBC Radio 4’s Today Programme: “All sorts of different people are talking about all sorts of different things because the Conservative backbenchers are casting around for a possible replacement for Kwasi Kwarteng, even for a possible replacement for Liz Truss.

“All sorts of names are being thrown about, Rishi Sunak, even Boris Johnson, Kit Malthouse, Sajid Javid.

“But one idea doing the rounds is that Penny Mordaunt and Rishi Sunak, who, after all, between them got pretty much two-thirds of the votes of MPs, come to some kind of arrangement and essentially take over.”

The King probably also knew that Truss and Kwarteng were going to do a U-turn on corporation tax, which they planned to lower to 19%, as it is in Ireland:

On Wednesday, at PMQs, Truss stood by the cut:

What we are doing is simply NOT putting up corporation tax. It’s not a tax cut, we’re just not raising corporation tax. And I feel that it would be wrong, in a time when we are trying to attract investment into our country, at a time of global economic slowdown, to be raising taxes. Because it will bring less revenue in.  And the way that we are going to get the money to fund our National Health Service… is by having a strong economy with companies investing and creating jobs.

On Thursday, October 13, Guido wrote:

What a difference 24 hours makes: this lunchtime The Sun broke the news that Truss “is considering raising Corporation Tax next year in spectacular mini-Budget U-turn”. A source tells Harry Cole that while the U-turn is being seriously considered, it wouldn’t be back up to the 25% proposed by Rishi before leaving the Treasury.

An unpleasant surprise for Kwarteng

Meanwhile, Kwarteng was in Washington at the annual IMF meeting.

Guido’s post had an update:

Channel 4 doorstepped him on his way in, where he said “I’ll be coming out with a statement on 31st October and I’m not going to pre-empt that. As The Speccie’s James Forsyth points out, if the markets are now pricing in a U-turn, and the government decides against one, they’ll likely be in a worse position than they were 24 hours ago…

On Friday, October 14, we woke up to the news that Kwarteng was summoned back to London, under the guise that emergency budget negotiations had to take place. The IMF meeting was to last into the weekend:

This could mean only one thing — that his time as Chancellor was over.

Guido reported that Mel Stride was happy that Kwarteng’s economic package was about to be shot to bits:

… one source quoted in the Financial Times claims “Almost everything in the Budget is now up for grabs” …

For those who enjoyed the excitement of tracking Priti Patel’s flight back to the UK ahead of her sacking by Theresa May, you can follow Kwasi’s flight in real time here

Mel Stride, Chair of the Treasury Select Committee, spoke on the Today Programme and welcomed a U-Turn. He called it a “powerful” signal to markets and added the government’s “fiscal credibility is now firmly back on the table”. He added the Conservative party should give the government “more time” and space to “rest”. How generous…

Sterling and bond markets had rallied following the first reports of a U-turn, which only adds on the pressure for more reversals. Elsewhere in the markets, today is the final day of the Bank of England’s gilt operations. Although gilt markets appeared steady this morning, the real test will come on Monday…

A Downing Street source tried to downplay Kwarteng’s return:

Kwarteng had scrambled to take the last commercial flight from Dulles Airport to Heathrow:

The next bit of news was that Truss was going to hold a press conference that afternoon.

Guido wrote:

Liz is set to U-turn on the corporation tax freeze at 2pm this afternoon. It’s rumoured she’ll whack it all the way up to 25% in the spring. Kwasi won’t be appearing alongside her…

Speculation began on who the new Chancellor would be. The Sun‘s political editor Harry Cole tweeted the following in the hours before the press conference, indicating Jeremy Hunt:

Cabinet members were correct about Jeremy Hunt:

King Charles approved the following appointments from Truss:

Nigel Farage was rightly furious about a Remainer assuming the post of Chancellor:

Harry Cole got a copy of Truss’s letter to Kwarteng, thanking him for his hard work:

The nation now had a new dream team. This seconds-long video is a must-see. The UK is doomed:

I’ll go into Truss’s press conference tomorrow.

In short, it was absolutely dire and lasted only eight minutes, which included four questions, one of which was from Harry Cole. His face is a picture:

I’ll have more tomorrow on how shocked Kwarteng must have been as well as what this means for Truss’s premiership.

Pity our Prime Minister Liz Truss.

The choice of Conservative Party members, the lady who wanted a Thatcherite premiership of low taxation and high growth, is now silent.

On Thursday, October 13, in her private weekly meeting with King Charles, he greeted her with ‘Dear, oh dear’:

He could have at least waited until the press were out of the way.

On Friday, October 14, she was forced to sack her Chancellor and good friend Kwasi Kwarteng.

The two of them were not playing the globalist game for high taxation and low growth.

Kwarteng’s brilliant mind

Kwarteng was elected as MP for Spelthorne in 2010, part of Prime Minister David Cameron’s fresh, youthful Conservative intake that year.

He worked on Brexit in 2019 as part of Theresa May’s government. Later that year, he was keen for Nigel Farage to stand down candidates in order for Conservatives to win convincingly in the general election — and get Brexit done:

Under Boris Johnson, in 2021, as Business Secretary, he became the first black — and first Conservative — Secretary of State. In that role, he refused to lift the moratorium on fracking. On the other hand, on July 6, 2022, he ensured that two coal plants are staying open to help ensure that the UK has adequate energy supplies this winter.

He was not a man in favour of high taxes, even in the wake of the pandemic, telling LBC radio on March 2, 2021:

Obviously we have to balance the books over time, but I’m a low tax conservative. The real key is to grow the economy. The best remedy for the deficit, the best remedy for the economy is to open up the economy, allow people to get on with their lives, allow businesses to start trading again.

In July 2021, he politely opposed the National Insurance tax hike.

In June that year, he supported the Government’s caution on lifting final coronavirus restrictions in England and sagely predicted that there would be no more lockdowns in England.

Once Liz Truss was made Prime Minister, we found out more about his friendship with her, which began when she, too, was first elected to Parliament in 2010.

On September 6, 2022, the Mail posted an old photo from earlier parliamentary days of the new Chancellor and the new Prime Minister with this caption:

The new Chancellor Kwasi Kwarteng is a close friend of Liz Truss, so close that he lives 350 yards away in Greenwich.

The article also told us more about his towering height and intellect (emphases mine):

Although he is not widely known to the public, the 47-year-old MP for Spelthorne, Surrey, comes equipped with a solid academic background.

At 6ft 5in, Mr Kwarteng is a powerhouse physically and intellectually …

He speaks German, Greek and French, and writes poetry in Latin.

One friend recalled how, when the school introduced Italian to the curriculum, ‘the teachers were trying to teach rudimentary Italian but Kwasi learnt the whole language – the teachers were struggling to keep up with him’.

Like Boris Johnson, who attended Eton a decade earlier, Mr Kwarteng shone at the Wall Game, a hybrid of football and rugby, where he played First Wall, described by an Etonian as ‘an almost suicidal position that involved spending much of the match having his head scraped against brickwork’ …

He was a prefect at the school and is still, it is said, held up as an example of how to succeed in Oxbridge interviews.

He went up to Trinity College, Cambridge:

He excelled at Cambridge where friends described him as ‘supremely confident, but not arrogant’.

One said he ‘had quite a few girlfriends – he had catching up to do after his boys’ private school upbringing’.

Professor Tim Whitmarsh, who taught him Latin and Greek, was quoted as describing him as ‘a bit of a young fogey’, saying: ‘I once saw a 19-year-old Kwasi in full brown tweed bumbling around with a pipe in his mouth on a baking hot day.’ 

More recently:

Last year, Mr Kwarteng bought a Victorian villa just 350 yards from Miss Truss’s £1.5million four-storey townhouse in Greenwich, south London.

Now they are neighbours in Downing Street too.

At one point Mr Kwarteng was dating Amber Rudd, the former Conservative home secretary, but the pair split up.

He then met Harriet Edwards, 36, a former pupil of Cheltenham Ladies’ College and now a high-flying corporate lawyer specialising in advising private clients on ‘succession’ planning.

The pair married in 2019 and have a baby daughter, Ida, born last year

Said to be a ‘pragmatist rather than an ideologue’, the free-marketeer’s ministerial office allegedly boasts a large whiteboard on which are scrawled the letters ‘MSH’, standing for ‘making s*** happen’.

With the multiple challenges facing the new chancellor, it is a mantra that may serve him well.

On September 7, The Telegraph had a profile of Kwarteng, which gave Truss supporters further hope.

We discovered that he wrote for the newspaper and had decidedly conservative opinions even in his 20s. The article featured a screenshot of his column of August 1, 1997 about higher education — ‘Don’t go to university, make money instead’:

The man appointed the 109th Chancellor of the Exchequer had been considered a rising star well before he entered Parliament and first made his name at the age of 22 with a column in The Telegraph.

From higher education to the rise of “lad mags”, Mr Kwarteng left a trail of published evidence showing his youthful thinking on the state of Britain. 

According to Mr Kwarteng, universities were not just a waste of time for those hoping to make lots of money but “a trick of the mind”. They offered value of a sort as “a place for reflective thought, like the monasteries of the Middle Ages,” but were only really popular as a way of proving one’s smarts …

While universities might be conducive to research, on the whole, Mr Kwarteng thought, “the university added little to the talent which was already in them”. 

For that reason, the MP for Spelthorne thought it “ridiculous” that everyone should go to university.

Also in August 1997, he also wrote about his scepticism of those who know best in ‘”Experts”: it’s the same old story’, wherein he expressed his doubts about climate change:

“We live in the age of the expert,” he declared, “of course, all these experts are invariably self-appointed, and they all contradict each other.”

Mr Kwarteng lamented the loss of Western “reason and objective investigation” and said that the witchdoctors of “simple peoples” had been “reincarnated in a modern, Western, suit-wearing capacity.

“They are the consultants, health gurus, constitutional experts, psychologists and sociologists who seem to spring from the ground at every opportunity.”

In his column, he highlighted global warming as an example of “conjecture” dressed up as “granite fact”.

It’s a pity he later changed his mind. Perhaps he did it for political expediency. Who knows?

On at least one issue, however, Mr Kwarteng has clearly come to accept the views of the experts …

As Business Secretary, he has declared it essential for governments to intervene to tackle climate change. 

The Telegraph article has several more of his columns to explore.

Kwarteng as Chancellor

A fortnight before he delivered his fiscal event to Parliament, he pledged that his focus on growth would be ‘relentless’. The Times reported:

The new chancellor has promised a shift in economic policy towards an “unashamedly pro-growth agenda” rather than worrying about redistribution.

Kwasi Kwarteng promised “to do things differently” as he acknowledged the need for higher borrowing over the winter to help households with their energy bills. However, he promised “fiscal discipline over the medium term” by ensuring the economy would grow faster than government debt, saying this would require deregulation and tax cuts.

After meeting key City figures, including the chief executives of Barclays, NatWest, Lloyds Banking Group and HSBC, Kwarteng said that he wanted to deal with economic problems through growth, with a goal of getting the underlying rate up to 2.5 per cent.

“The prime minister and I are committed to taking decisive action to help the British people now,” he said. “That means relentlessly focusing on how we unlock business investment and grow the size of the British economy, rather than how we redistribute what’s left.”

He and Truss needed to work quickly to come up with the fiscal event. The nation had been in mourning for the Queen from September 8 through September 19. Meanwhile, the Conservatives’ opponents were braying for a statement.

On Thursday, September 22, Kwarteng tweeted:

That day, The Spectator‘s Katy Balls explained that Truss wanted to move quickly:

Liz Truss is in a race against time. It’s not just the prospect of an election in two years. It’s the political problems – from party management to events outside of one’s control – that quickly clog up a prime minister’s in-tray. It’s why for all the efforts to play down Friday’s fiscal event as a mini-Budget, it is likely to be anything but small. Truss and her Chancellor Kwasi Kwarteng plan to push through as much as possible while their stock is highest

Truss and Kwarteng have said their priority is to boost growth. In order to do that, they are undoing plenty of policies by their predecessors. The plan for investment zones – areas that could benefit from a lighter planning regime and various tax breaks – has already been briefed as a change of priorities compared to the former Levelling Up secretary Michael Gove. A government insider told the Financial Times this week: ‘The plans make Gove look like a socialist.’ There will also be further measures to undo more of the policies brought in by Rishi Sunak as Chancellor. 

Coffee House understands one plan under consideration is the return of tax-free shopping for tourists. As Chancellor, Sunak axed the 20 per cent discount for foreign visitors – leading to an outcry from MPs who said it would make Britain less attractive to businesses. At the time, the Treasury defended his decision on the grounds that ‘this is getting rid of a tax cut that mainly benefits foreign billionaires.’ However, the sector has voiced frustrations that this has led UK business to drop off while European capitals have seen business go up.

How will all this go down? As the Bank of England raise interest rates by 0.5 percentage points to 2.25 per cent in an attempt to combat inflation, already there are warnings about the effect of the government’s planned borrowing. The Institute for Fiscal Studies has said that the planned tax cuts are likely to push UK borrowing and debt to unsustainable levels. The hope in government is that rather than spark alarm, the markets will have already priced in the new direction they are taking, and what happened in August suggests they may well have done so.  

‘The strategy is do everything now,’ says one person close to Liz Truss. ‘This government has balls of steel’. In adopting this approach, Truss and Kwarteng are taking a gamble – and it won’t be too long before it becomes clear whether or not it is paying off.

True conservatives cheered the package Kwarteng delivered to Parliament on Friday, September 23:

We felt as if Brexit would finally become the reality that would thwart Labour:

Our debt would remain the second lowest in the G7:

Guido Fawkes posted Kwarteng’s economic plan in full as well as a summary, excerpted below:

Price of Energy

    • Government freezes household energy bills at £2,500
    • Government will subsidise wholesale energy prices for businesses
    • Total cost of energy package for 6 months from October will be approximately £60 billion

Inflation

    • Government plan will reduce peak inflation by 5%
    • Chancellor: Bank of England independence is “sacrosanct”

Growth

    • Government will focus on growth target of 2.5%

Barriers to Enterprise

    • Government will bring forward bill to unpick regulation and launch a review into decision making
    • Increase disposal of government land to build more homes
    • Government will remove cap on bankers’ bonuses

Tax

    • Planned rise in corporation tax is cancelled, it will remain at 19%
    • Annual investment allowance will not fall to £200,000 as planned, will remain at £1 million
    • Office of tax simplification abolished, tax simplification mandated in all government departments
    • IR35 rules changed: 2017 and 2021 reforms scrapped
    • Planned increases in duty for beer, wine and spirits cancelled
    • VAT free shopping for overseas visitors
    • Increases to National Insurance contributions cancelled
    • Stamp duty threshold raised from £125,000 to £250,000; for first time buyers it will rise from £300,000 to 425,000
    • Kwasi will abolish the highest 45% rate of income income tax. Top rate now 40%.
    • Basic rate of income tax cut to 19% from April

Ahead of Kwasi’s statement:
FTSE 100 is at 7,120
£/$ 1.1163
£/€ 1.1435
10 year gilt yield 3.49%

That afternoon, The Telegraph‘s Allister Heath was over the moon:

This was the best Budget I have ever heard a British Chancellor deliver, by a massive margin. The tax cuts were so huge and bold, the language so extraordinary, that at times, listening to Kwasi Kwarteng, I had to pinch myself to make sure I wasn’t dreaming, that I hadn’t been transported to a distant land that actually believed in the economics of Milton Friedman and FA Hayek.

But Liz Truss and Kwarteng are very much for real, and in revolutionary mood. The neo-Brownite consensus of the past 20 years, the egalitarian, redistributionist obsession, the technocratic centrism, the genuflections at the altar of a bogus class war, the spreadsheet-wielding socialists: all were blown to smithereens by Kwarteng’s stunning neo-Reaganite peroration.

Hardcore, unapologetic liberal Toryism is back. This fiscal statement is in some ways an even bigger deal than that previously greatest of Budgets, Lord Lawson’s extravaganza of 1988, so long ago that my generation cannot remember it. All the taboos have been defiled: the fracking ban, the performative 45pc tax rate, the malfunctioning bonus cap, the previous gang’s nihilistic corporation tax and national insurance raids. The basic rate of income tax is being cut, as is stamp duty, that dumbest of levies. There will be more reforms, more deregulation from a Chancellor explicitly committed to a flatter and simpler tax system.

It wasn’t merely the policies that were astonishingly good: just as remarkable was Kwarteng’s language, the arguments he deployed to explain his decisions, the lucid free-market philosophy from which they emanated. He spoke of the need to bolster incentives, to encourage business investment, to increase work, to reward savings. He explained that this meant that the returns on capital and labour had to be improved. He wants to usher in a new Big Bang in the City and launch dozens of new Canary Wharfs on steroids.

At a stroke of a pen, Britain’s competitiveness, its attractiveness to investors and top talent, has been transformed. Money and jobs will flow in, especially from the Eurozone. Britain’s central pathology is low growth, held back by faulty economic, fiscal, monetary and regulatory policies: higher spending begets higher taxes, which lead to a vicious cycle of even lower growth, and hence yet more taxes, and so on.

I watched Kwarteng’s speech to Parliament and the debate that followed. Allister Heath was right in everything he wrote.

On Sunday, September 25, The Sun wrote that its polls indicated the British public supported nearly all of Truss’s proposals that Kwarteng delivered:

DELIGHTED Brits overwhelmingly back Kwasi Kwarteng’s key income tax and stamp duty cuts, a poll found …

And PM Liz Truss says their radical plan will usher in a “decade of dynamism”

A Deltapoll survey for The Sun on Sunday found many of his central policies have gone down a storm.

His pledge to slash the basic rate of income tax from 20p in the £1 to 19p from next April, benefitting 31million workers, got the backing of 63 per cent of respondents.

A majority of Labour and Tory supporters like the plan.

Meanwhile, the decision to ditch stamp duty for first-time buyers on homes worth up to £425,000 was approved by 61 per cent of respondents.

The move to reverse the 1.25 percentage point hike in National Insurance Contributions was liked by 59 per cent of the 1,553 people surveyed.

Some parts of the mini Budget, however, were far less popular. Just 30 per cent of voters backed the decision to scrap the bankers’ bonus cap.

And even fewer — 28 per cent — approved of the move to do away with the 45p top rate of income tax, which will put more cash in the pockets of society’s top earners …

Some delighted Tory MPs punched the air in delight after Mr Kwarteng detailed his mini Budget to the Commons.

One senior Tory said: “I am delighted. Finally, we have a proper Thatcherite budget.”

But others warned it was a punt that may cost the Tories the next election.

One minister crossed his fingers as he said: “It is a huge gamble. If we see growth then it will have worked. It’s a roll of the dice.”

The annual Labour Party conference convened that Sunday.

The Spectator‘s editor Fraser Nelson pointed out that their leader Sir Keir Starmer opposed only the abolition of the 45% tax rate:

The Sun‘s editorial that day reminded Britons that it was Gordon Brown who put the 45% rate in place — and that was late in his premiership, around 12 years ago. His predecessor Tony Blair had not. As such, Labour had no room to complain:

For too long — if partly by necessity of the pandemic in recent years — the Conservatives have been parked on the centre ground, often operating from a Blairite or Brownite playbook.

The spleen-venting over Mr Kwarteng’s most controversial call — ditching the 45 per cent top tax rate for those on over £150,000 — ignores the fact that, throughout the Blair years, it was the exact same as the new 40 per cent levy.

Nonetheless it’s true that the move does give Labour an easy line of attack, as does the Government’s reluctance to trumpet the fact that it IS already subjecting energy giants to a windfall tax — one which is raising around £30billion.

Yesterday Labour leader Sir Keir Starmer confirmed he would retain the vast majority of the Chancellor’s tax cuts if he gained power.

Already, however, the doomsayers, including Torsten Bell, were already weighing in, as Guido Fawkes wrote that day (emphases his):

Labour have accepted two thirds of the personal income tax cuts. They are only rejecting one cut, the top rate cut…

So the the dividing line between the parties is: Will “new era” economics work and crank growth up to 2.5% before the next election?

Not a chance say Rachel Reeves and the assembled hardline-centrists of the broadsheet punditry, plus all the orthodox economists from the IFS, Institute for Big Government and gloomy Torsten Bell with his distribution charts. Kwasi and Liz say it will work. It won’t surprise co-conspirators that Guido thinks it is less of a gamble than the BBC’s Faisal Islam reckons. Barring oil going to $300 or some other catastrophe, it is far more likely to work than the doomsters would have you believe. If Kwasi and Liz fail to hit the 2.5% target they have set for themselves, they will deservedly lose the next election. The choice now is pull out all the stops and go for growth, or go into opposition…

At conference, two Labour MPs of colour criticised the Conservatives’ choice of Chancellor in Rishi Sunak, his successors and Kwasi Kwarteng. Guido reported on Rupa Huq’s words about Kwarteng, which earned her a suspension from the Party, despite her apology. Shadow Rail Minister Tan Dhesi said he wanted to see white males in the Conservative Cabinet rather that persons of colour:

Guido doesn’t consider Tan’s comments to be half as bad as Rupa Huq’s. His quote about Boris having an Asian do his dirty work for him, alongside Huq’s referral to Rishi as “a little brown guy”, is indicative that Labour somehow questions the legitimacy of non-white Tory Cabinet ministers. Does anyone get the sense Labour are slightly panicked about the Tories having a more diverse front bench than they do?

Fatal criticism despite global problems

But that was nothing compared to the big anti-Truss, anti-Kwarteng fallout that took place elsewhere that week.

On Monday, September 26, the IMF criticised the fiscal event.

Lord Frost defended Truss and Kwarteng in an article for The Telegraph:

https://image.vuukle.com/f9d07d03-d334-4051-8724-6f4fa2ddda17-07f0784a-4c8c-4152-9e08-1cc67b4c2d36

The IEA’s head of public policy said that one of Margaret Thatcher’s budgets — that of then-Chancellor Geoffrey Howe — was similarly criticised and ended up being wildly successful:

https://image.vuukle.com/afdabdfb-de55-452b-b000-43e4d45f1094-ccb91e7a-e201-4fa3-89a5-c933fe45cf50

On Thursday, September 29, Labour MPs were back at home but outside criticism of the Truss-Kwarteng plan continued from globalist sources.

The US Treasury had weighed in against the plan after the IMF had.

The markets wobbled that week.

It should be noted that the UK was not the only country suffering from jitters — it was every other main economy, too.

With regard to us, however, the Bank of England had to step in with a fortnight of measures, too complicated to explain here, that put an end to risky measures that British pension funds had been using for several years.

Nevertheless, Truss and Kwarteng got it in the neck.

The Telegraph had a running diary of events that Thursday morning. Excerpts follow, covering the period from 7:30 to 10:30 a.m.:

The Prime Minister is due to undertake a tour of regional BBC radio stations this morning when she will be grilled on her tax cuts and spending plans after they sparked economic turmoil.

Lord Clarke, the Tory former chancellor, has argued this morning that no other Conservative government would have made a “mistake” like Kwasi Kwarteng’s mini-Budget. 

The Tory former chancellor told Times Radio: “If the pound sinks any further, then they will have to perhaps retract some of the measures because the more the pound goes down, the more inflation goes up.”

The Treasury has said Kwasi Kwarteng will deliver a follow up statement to the mini-Budget in November in which he will set out the Government’s medium-term economic plans. 

But the Chancellor is under mounting pressure to deliver a statement to reassure the markets and the nation much sooner than that.

Chris Philp, the Chief Secretary to the Treasury, has defended the Government’s decision to scrap the 45p top rate of income tax.

Asked why it was necessary to make the move now, he told Sky News: “The top rate of now 40 per cent, reducing from 45, makes us internationally competitive, it puts us on a par with a number of other economies.”

After the Bank of England was forced to step in to calm the markets, Mr Philp told Sky News: “No one’s perfect but I’m not going to apologise for having a plan to grow the economy …”

Chris Philp, the Chief Secretary to the Treasury, has dismissed suggestions that Kwasi Kwarteng should resign as Chancellor over his handling of the mini-Budget. 

Liz Truss has defended her mini-Budget plans as she said as Prime Minister she is prepared to take “controversial and difficult decisions”. 

Liz Truss has said the world is facing “very, very difficult economic times” as she also insisted Kwasi Kwarteng is working “very, very closely” with the Bank of England.

Liz Truss said that “we have seen difficult markets around the world because of the very difficult international situation we face”

Liz Truss has defended the decision to scrap the 45p top rate of income tax as she argued that lower taxes “help everybody”.

BBC Radio Bristol presenter James Hanson challenged Liz Truss over her repeated claim that financial markets around the world have been facing turmoil. 

Daisy Cooper, the deputy leader of the Liberal Democrats, has claimed Liz Truss is in “complete denial” following the Prime Minister’s morning media round. 

The Conservative Party is due to meet in Birmingham from Sunday this weekend for its annual conference. 

Sir Ed Davey, the leader of the Liberal Democrats, has called on the Tories to scrap the event.

Sir Ed said repeated his call for Parliament to be recalled.

Chris Philp, the Chief Secretary to the Treasury, was told this morning that the mini-Budget needs to be changed. 

Speaking to LBC Radio, he said: “No, well, if you listen to the reaction of British business organisations to Kwasi Kwarteng’s growth plan on Friday, like, for example, the Confederation of British Industry, the CBI, the Federation of Small Businesses, the British Chambers of Commerce, they all strongly welcomed the growth plan, and they are the organisations that represent British business…”

The Bank of England’s £65 billion intervention in the UK economy yesterday is a “very targeted, time-limited intervention”, according to the Chief Secretary to the Treasury. (You can read the full story on the bailout here) …

Chris Philp was asked during an interview on LBC Radio this morning if that bailout indicated the economy is experiencing “serious problems”.

He said: “Look, they were making a very targeted, time-limited intervention. There was a particular idiosyncrasy to do with the way that particular pension vehicles used long-dated gilts.

“It was a very targeted, very specific intervention to address that issue, which they’ve successfully done – independently, of course, the Bank of England act independently.

“And they’re not the only central bank to have had to make an intervention. Like I said, the Bank of Japan intervened in the Yen dollar market just a few days ago.”

Chris Philp, the Chief Secretary to the Treasury, has rejected the suggestion that the UK is now in the middle of a financial “crisis”

Asked if he accepted it is a “crisis”, Mr Philp told LBC Radio: “Look, I don’t accept the word crisis at all. Look, in the last six to nine monthsthe financial markets have been in some volatility around the world.”

Sterling has fallen sharply again as former Bank of England governor Mark Carney accused Liz Truss of “undercutting” the central bank

He said there was an “undercutting” of key City institutions, pointing to the lack of an OBR forecast, a lack of detail about costing and working at “cross-purposes” with the Bank of England.

Ms Truss later told BBC Radio Kent that she is “very clear the Government has done the right thing by taking action urgently to deal with inflation, to deal with the economic slowdown, and to deal with high energy bills”.

Were those accusations from globalists really true?

Was day-to-day business in Britain disrupted so dramatically? And wasn’t the Government helping Britons with their energy bills? As to the latter question, the UK has been providing the most assistance of any European government:

That week, Kwarteng was under much pressure to meet with the Office for Budget Responsibility (OBR), which, as I posted on October 6, has a lot of Torsten Bell alums from his charity, the Resolution Foundation.

On Friday, September 30, he met with the OBR. Guido reported:

The highly-anticipated meeting between the OBR and government wrapped up after 48 minutes. The OBR says they’ll deliver an initial forecast on the October 7, however the government’s readout of the meeting sticks to the line that it will be published alongside Kwarteng’s medium-term growth plan on November 23 …

Meanwhile, Labour were still banging on about the abolition of the 45% tax rate. The cost of subsidising Britons’ energy bills kept increasing, too. Naysayers were pumping up the total expenditure from £60bn to £100bn:

That morning, The Telegraph posted Kwarteng’s editorial defending his fiscal event, which ended with this:

Even in the face of extreme volatility in global markets, with major currencies wrestling an incredibly strong US dollar, we will show financial markets and investors that our plan is sound, credible and will work to drive growth.

By combining our immediate energy support with bold action to reset the fundamentals of the UK economy, we are helping households and businesses today – and putting the United Kingdom on a more prosperous, competitive path for years to come.

That evening, The Times reported that the Scottish Secretary Alister Jack said that Truss delivered what she had promised in the leadership hustings and reminded us that she and former Chancellor Rishi Sunak disagreed on how the British economy should proceed:

Speaking to BBC Radio Scotland on Friday, Jack said: “When you say ‘huge shock’, over the summer [Truss] was very clear that her strategy was to reduce taxes.

“She and Rishi Sunak argued that out over the summer, he said one thing, she said the other, but it shouldn’t come as a shock to anyone when she said she believed the strategy was to be more of an Asian tiger economy, where you keep your higher spending but you grow your economy, and she said to do that she would be cutting taxes.

“To anyone paying any attention to that leadership contest it was plain as day what was going to happen”

In response to the plans announced by Kwarteng last week, the International Monetary Fund said it was monitoring the situation and urged a rethink, while the Bank of England began buying government bonds to avert what it described as a “material risk to UK financial stability”.

More controversy, ending with Truss’s sacking of Kwarteng, followed.

I will dissect the tragic conclusion tomorrow and, on Thursday, what it means for Truss’s premiership.

As I promised earlier week, there is a way that Prime Minister Liz Truss and Chancellor Kwasi Kwarteng can deal with the 45% tax rate.

Before I go into that, however, the hysteria from the past few weeks, beginning with Kwarteng’s September 23 fiscal event, has gone into overdrive.

Truss’s dresses

During the Conservative leadership contest in July and August, Liz Truss has worn a particular style of dress.

During last week’s Party conference, The Guardian went a bit mad and accused the Prime Minister of dressing like a dictator. One can only hope that whoever tweeted this looked at the reply with Liz Hurley wearing the same style of dress …

… which is very popular at the moment.

On October 5, The Telegraph wrote about the new ‘power dress’, a Karen Millen creation called Forever.

If Truss is dressing like a dictator, then so is Catherine, Princess of Wales (emphases in purple mine):

You may not be familiar with the term “inverted notch lapel”, or what it might look like. Until now, that is, after two of the country’s most high profile women stepped out wearing it.

The first was the new Princess of Wales, who wore the Karen Millen Forever dress in sunshine yellow for a visit to a maternity ward. Kate rarely puts a fashion foot wrong so, as PR opportunities come, this is the holy grail. The Kate Effect is as powerful as it was 11 years ago when she married Prince William and, at the time of writing, the dress is already sold out in every size.

The other person modelling this style, Prime Minister Liz Truss, wore a red Karen Millen dress for her leader’s speech at the Conservative Party Conference in Birmingham. This in itself is not new; she has several dresses like this in different colours. For her, the inverted notch lapel is almost a style signature.

Truss’s look has gone viral on social media though, because it appears to be uncannily similar to the dress worn by Emma Thompson in the dystopian Russell T Davies drama Years and Years. It could even be the same one. Named the “Forever” dress, Karen Millen has been selling it in various iterations since 2015 and it’s a consistent bestseller. At £225, it’s not cheap, but also not prohibitively expensive. It’s inclusive too, available in sizes 6-26

Note how selective the perception is. Russell T Davies notices when Truss wears the dress, but not the Princess of Wales:

The fact that Thompson plays an ultra-far-right politician in a terrifying imagined future in Years and Years is less than ideal for Truss. As Davies himself pointed out on Instagram: “This is getting weird.”

The dress’s appeal is all about its neckline:

“The V-neck does all the right things,” says personal stylist Annabel Hodin, who regularly works with women in the public eye. “It elongates the neck in an unprovocative but very feminine way and allows for delicate but pretty jewellery. This highlights the collarbone and draws the eye upwards. The neckline also creates a narrow shoulder effect. This all exudes confidence very subtly.”

We know that both the Princess of Wales and Truss are fond of delicate jewellery; the inverted notch allows the PM to put her “Circle of Truss” necklace front and centre.

Here’s the ‘power dress’ angle:

But it’s not just famous women – it’s regular women who desperately need smart clothes for work and don’t have the time to trawl the high street for other options. They need clothes that aren’t cut too low at the chest, don’t expose their upper arms, conceal their knees, and allow them to get on with their work without being distracted by their clothes. They are the lawyers, finance executives and general managers at fine dining restaurants. Ask those women where they found their well-fitting skirt or sharply cut dress and they’ll whisper, “Karen Millen”.

That’s enough about dresses.

Liz-slamming continues

Labour, along with the media, are doing their best at slamming Liz — Truss, that is, not Hurley.

After Truss criticised the ‘anti-growth coalition’ in her conference speech on Wednesday, Labour’s Sir Keir Starmer wasted no time in attacking her:

On Thursday, October 6, Guido Fawkes reported (red and bold emphases his):

On cue, Sir Keir has hit the airwaves this morning to go on the counterattack after Liz’s conference speech. As expected, Liz’s “anti-growth coalition” line is doing all the heavy lifting, with Starmer erupting into a kind of “I know you are, but what am I?” defence on BBC Radio Sheffield:

Oh for heaven’s sake… the enemies of growth? She has just passed a kamikaze mini-Budget which has lost control of the economy, is putting hundreds of pounds on people’s mortgage bills […] that is the absolute opposite of growth. She’s…she- she’s absolutely not just anti-growth, she’s the destroyer of growth!

Like Liz last week, Starmer made a whistle-stop tour of local media this morning, so inevitably he was asked about this repeatedly. He reacted more of less the same way in each interview, as though it’s the first time he’d heard the accusation.

Labour are also ‘cultivating business’, which is interesting as they normally cultivate unions. Sir Keir is pictured with his Shadow Chancellor Rachel Reeves:

On October 6, Guido posted an excerpt from a new Labour document laying out the Party’s strategy:

Labour has in the past made much of cash for access attacks on Ministers – most recently on Kwasi after the mini-budget. Now the party has its eyes on government it too plans to get closer to corporate interests. In an internal document obtained by Guido, the party intends to raise an initial immediate target of £250,000 by deploying shadow ministers to “business engagement” events. They also plan to “cultivate and maintain” corporate contacts. A Labour press release from just days ago criticised the Tories for “prioritising the rich and big business”. Perhaps they might want to rethink that attack line…

… they are clearly aware that they are going to be pushing the legal boundaries, to generate hundreds of thousands coordinating with the leader’s office and glad handing at business engagement events without being caught offering policy changes. They may claim euphemistically to be “engaging with business”, the document makes clear that the real purpose is to “ensure income maximisation from events” and “to work closely with the fundraising team to ensure business contacts who may also be interested in a donor relationship are identified and effectively managed”. In other words, businessmen are to be flattered and fêted in return for their cash.

Keir is already facing internal criticism for moving away from the unions, who in turn are threatening to withdraw funding. He might now have the “who funds you” cash for access brigade on his case too…

Meanwhile, Rachel Reeves continued pumping out more inaccuracies about Kwarteng’s fiscal event economic policies:

Guido reminded us that Reeves used to work for the Bank of England (BoE) and should be able to handle dead hard sums. Furthermore, she was a few days behind the curve, as the BoE had stopped its intervention during this week’s Conservative Party conference:

The Bank of England has been easing off its interventions in the gilt market, leaving Rachel Reeves’s hyperbolic attack lines exposed for their inaccuracies. Julian Jessop points out the fact the Bank did not have to buy any gilts again today, leaving total purchases stable at £3.66 billion. A tad short of the £65 billion she repeatedly claims. This is a further sign market jitters have been effectively mitigated, far from Labour’s claims of an “economic crash”. As a trained economist and former Bank of England employee, Rachel really must know better. Her sums were out by a factor of 17…

On October 4, Reuters stated that the BoE had already slowed down its purchases of long-dated government bonds:

The Bank of England rejected all 2.23 billion pounds ($2.53 billion) of long-dated government bonds which it was offered on Tuesday at its daily auction aimed at stabilising markets and stopping a fire-sale of assets by pension funds.

The BoE said last week that it was open to buying up to 5 billion pounds of long-dated gilts a day at reverse auctions which it is holding until Oct. 14, subject to a reserve price which would vary depending on market conditions.

The BoE announced the operations on Sept. 28, when 30-year gilt yields hit a 20-year high above 5% in market turmoil after Kwasi Kwarteng’s mini-budget. Thirty-year yields dropped 100 basis points (bps) shortly after the BoE announcement.

The actual volume of gilts purchased by the BoE so far has been low and looks unlikely to come close to the 65 billion pounds which initially looked possible.

On Monday the BoE bought just 22.1 million pounds of gilts with a maturity of 20 years or over, and in last week’s three auctions it only bought 3.64 billion pounds in total

Late on Monday the BoE issued a statement reaffirming its willingness to buy up to 5 billion pounds of gilts, but reiterating that it would not buy gilts at any price.

The lies and the truth

On October 6, The Guardian wrote that the BoE warns that pension funds are in meltdown because of Kwarteng’s fiscal event, or mini-budget.

However, as usual, all the Conservatives’ critics, including their own rebel MPs, miss the point that currencies are fluctuating all over the world.

One of Guido’s readers responded to the article as follows:

1) It’s the G[uardian]

2) It’s an opinion piece

3) Explain why the € is STILL below parity.

4) Explain why every currency crashed (except the Ruble).

Was that all to do with Liz?

Grow up and grow a pair.

Another of Guido’s readers explained that many years of quantitative easing (QE) need to be corrected:

I’m afraid all the “listening” … in the world to the current myopic economic orthodoxy and vested interest groups, will not lead to a result contrary to that which it has already caused i.e. stagflation, merely more of the same.

Further, the real reason Sterling fell in value (which the deluded mainstream media dare not countenance) is because the Bank of England are running nominal interest 1% below that of the Federal Reserve (over 3% in real terms), and that they also announced the reversal of the Quantitative Easing programme (currently standing at over £1 trillion in asset purchases sitting on the Bank of England’s balance sheet).

Unfortunately the bond markets (along with every other asset market, including junk bonds) have been bid up into the stratosphere because of fifteen years of QE and ZIRP, without which, the huge manipulation of asset markets, including Gilts, is going to unwind, resulting in huge price falls, and a large rise in Gilt yields.

It has gone on so long, nobody can remember long term averages of bond yields or interest rates, and trillions of debt has been secured on this basis, which has skewed the economy toward speculation, idle whimsy and a reliance on huge government subsidy, none of which is productive.

In essence we have been producing too little and consuming too much, for far too long, expecting to borrow ever further into the future to fund it, or papering over the cracks with ever greater tranches of money printing.

Quite reasonably lenders are questioning our ability to pay, and the underlying value of our currency.

That is to say, the bill is coming due, and I’m afraid blindly following the prevailing economic orthodoxy, with more debt, money printing, state entitlement, etc., is only going to deepen the economic stagnation and inflation, quite probably to the point of hyperinflation if we continue to “listen” to vested interests unwilling to countenance their folly.

The long-serving Conservative MP John Redwood watches the economy closely and posted these observations on October 5:

The United States has experienced similar turbulence:

Overall, this is a global situation:

Let us now look at the global situation and how the United Kingdom compares.

We are better off than some countries and worse than others.

The point is: we are not an international outlier.

On Wednesday, October 5, The Times‘s David Smith looked at debt-to-GDP ratio across Western countries:

according to International Monetary Fund figures compiled by the UK’s Office for National Statistics, only Germany in the G7 has a lower debt-to-GDP ratio. The UK’s debt to GDP is 102.8 per cent, slightly higher than the ONS’s own estimate. This is above Germany, 70.2 per cent and the EU, 90.3 per cent, but lower on this measure than Canada, 112.1 per cent, France, 112.3 per cent and America, 132.6 per cent. Then you get to the very high levels of debt of Italy, 150.9 per cent and Japan, 263 per cent.

Some countries have surprisingly low government debt, such as Sweden, 35 per cent and Denmark, 33 per cent. Switzerland, perhaps more predictably, is on 25 per cent. New Zealand is a low-debt country, 33 per cent, with Australia on 48 per cent.

It is worth noting that:

Singapore’s debt-to-GDP ratio, interestingly, is 176 per cent.

The panic narrative in the UK seems to centre around the debt trajectory:

More important is the trajectory of debt; the rate at which it is rising. Fifteen years ago, on the eve of the global financial crisis, under one of the rules followed by the Labour government then, UK debt was just under 40 per cent of GDP. Now it is close to 100 per cent, with a further rise to come, whose size will be determined by the forthcoming assessment by the Office for Budget Responsibility (OBR).

I’ll get into the OBR shortly.

David Smith has more:

Other countries have not seen anything like this rise. Germany’s debt-to-GDP ratio, having risen during the financial crisis, is back close to pre-crisis levels, despite the pandemic, thanks to tough fiscal rules. America has seen close to a doubling of its debt, but a smaller rise than the UK. Italy had high debt at the launch of the euro in 1999, roughly 120 per cent of GDP, from which the rise to just over 150 per cent now does not look spectacular.

Japan’s very high government debt has never been a particular problem because it is funded by Japanese savers and financial institutions. A significant proportion of UK debt is held by foreigners and is thus more vulnerable to shifts in sentiment.

Whenever I write about UK government debt, a small contingent raises the issue of unfunded public sector pensions. A much bigger liability, on top of this, is unfunded state pensions. But all countries have unfunded liabilities and the way the OBR deals with this issue is to look at the future cost to government of funding those public sector pensions, which is expected to fall marginally relative to GDP in future because of the reform of those pensions.

He says that everything will hinge on the OBR, rather than the Chancellor, hence more doom and gloom:

The OBR, in its July fiscal risks report, had a baseline projection of UK government debt rising to 267 per cent of GDP over the next 50 years because of the upward pressure on spending on health, the state pension, social care and the loss of motoring taxes from the switch to electric. Returning debt to the 75 per cent of GDP considered sustainable before the pandemic would require significant future tax increases and spending cuts, it said.

Since then, the government has abandoned the health and social care levy (originating with the rise in national insurance) and the receipts in prospect from higher corporation tax. The question now is whether the OBR, later this month, can offer some reassurance on the short-term trajectory of UK debt. With markets still jumpy, that reassurance is still required.

All hail the OBR, in other words.

However, can the OBR be trusted?

Some of the OBR people come from a left-leaning organisation called the Resolution Foundation.

Those who watch parliamentary debates know that one name that comes up a lot is the Resolution Foundation, founded by Torsten Henricson-Bell, who now goes by the name Torsten Bell. Labour quote him and his Resolution Foundation frequently. Bell is also a frequent guest at various select committee inquiries.

This is because Torsten Bell was Ed Miliband’s policy advisor several years ago. It was Bell who carved Miliband’s 2015 Labour manifesto pledges into stone, which, after David Cameron won the general election that year, mysteriously disappeared. Even today, no one knows what happened to the Ed Stone, as it is called.

Bell was always opposed to Brexit.

Once, in 2018, BBC Radio 4 called the Resolution Foundation ‘left-leaning’.

Guido says that the Resolution Foundation, a registered charity, plays a bit fast and loose with the Charity Foundation’s rules on politicising matters. In their case, that involved promoting Labour at one point in February 2019.

This brings us to the present day and the intertwining of the Resolution Foundation with the OBR and the Treasury.

Conservative Chancellor George Osborne created the OBR — Office for Budget Responsibility — in 2010 when the Conservatives were in coalition with the Liberal Democrats. Whether Osborne realised it or not at the time, the OBR took stances that opposed later Government policy.

On Monday, October 3, Guido posted ‘Office for Budget Responsibility’ Not-So-Independent Leadership’:

There’s been plenty of media squawking in the last couple of weeks over the lack of an Office for Budget Responsibility (OBR) forecast in the mini-Budget. Never mind the fact the OBR didn’t even exist until 2010, without its explicit blessing, how can any fiscal policy ever be trusted?

Even a cursory look at the OBR’s personnel gives you an idea of which school of thought its leaders belong: both the chair of its Budget Responsibility Committee and its Deputy Chief of Staff are former colleagues or protégés of Torsten Bell, chief executive of the left-of-centre* Resolution Foundation (RF). Torsten Bell will be a familiar face to co-conspirators. Before he spent his days pushing for ever-higher welfare payments at the RF, Bell was Labour’s Director of Policy under Ed Miliband. For years it seemed carving Labour’s manifesto into stone would be his crowning achievement. It turns out seeing his friends land top jobs overseeing government fiscal policy has won out…

Richard Hughes, now the chair of the OBR’s Budget Responsibility Committee, spent a year alongside Bell at the Resolution Foundation as its research associate, where he:

    • Co-authored new fiscal rule proposals which were “urgent” because the Government was promising “a flurry of spending commitments and promises to cut taxes” in 2019.
    • Warned of the “economic disruption associated with a no deal Brexit“, and claimed it would lead to “a smaller and slower-growing economy in the long run.”
    • Claimed the impact of Brexit on the economy would be “worse than Covid” which was responsible for over 100,000 deaths.

Laura Gardiner, OBR Deputy Chief of Staff responsible for policy costings, expenditure, receipts and “fiscal risks“, worked for Bell for six years. In that time she:

    • Claimed it “makes sense” to bribe 25-year olds with £10,000 handouts an £8 billion-a-year policy which was soon swept under the rug, presumably once everyone realised how bonkers it was.
    • Attacked the government for “the era of austerity“, and proposed reforming Universal Credit. Learned plenty from her days alongside Bell, obviously.
    • Served as a “Lambeth Equality Commissioner“.

Lambeth is a long-time Labour borough in south London.

Guido is perplexed:

It baffles Guido that Richard Hughes was recruited to head the OBR from an organisation, the Resolution Foundation, which has been unremittingly critical of every Tory chancellor since George Osborne. Is it any wonder that Kwasi didn’t fancy having his plans benchmarked by known ideological opponents who favoured staying in the EU and egalitarian redistribution on a gargantuan scale. It doesn’t take a great insight to guess what the OBR will say when a budget that doesn’t align with their values and objectives lands on their desks…

*David Willets, the foundation’s president, is used as a token Tory shield against accusations it is a left-wing campaigning organisation. Guido would not go as far as to say Two Brains is a useful idiot, he is however an ideological fig-leaf…

No wonder that Kwarteng felt free to joke about the OBR at a drinks reception sponsored by the think tank Policy Exchange that night at the Party conference:

On Thursday, October 6, Guido made another OBR revelation. Another Resolution Foundation alum favours huge tax rises :

He wrote:

It turns out there’s a third we missed…

Cara Pacitti, the OBR’s Senior Fiscal Analyst, also spent two years as an economist at the Resolution Foundation, where she worked alongside her future OBR boss Richard Hughes on one paper assessing the “damage” of a no-deal Brexit, and another which claimed “tax rises tend to harm the economy less than spending cuts“. The latter paper, “How to support the economy today and repair the public finances tomorrow”, may as well have been drafted by Gordon Brown. 

Here’s a flavour of what it proposed:

    • Public support is necessary and so taxes on corporate crisis windfall profits should be considered – which is Labour Party policy.
    • Freezing tax thresholds and raising the Corporation Tax rate should be seen as low-hanging fruit for raising revenue – a massive stealth tax on individuals and a jobs destroying burden on businesses.
    • Reforming wealth taxes can improve the functioning of the tax system and raise significant revenue – the Corbyn agenda.

So that’s three senior members of the OBR who are about to assess a budget which obviously runs contrary to their declared ideological objectives. The Resolution Foundation has never seen a tax it doesn’t like, is run by the Labour Party’s former policy chief and advances an agenda that is socialistic. How is it that out of the thousands of economists turned out by British universities every year, the OBR over and over again keeps hiring senior economists from the one think-tank run by Labour’s former policy chief? What are the odds?

No wonder Kwarteng didn’t bother consulting the OBR before issuing his mini-budget.

Another hard-hitting truth is that average families are paying more tax than the Left and their water-carrying media chums would have us believe:

A full report is available:

How to abolish the 45% tax rate

Now to the nub of the matter.

All the above provides a backdrop as to how difficult it will be to get rid of Gordon Brown’s — Labour’s — 45% tax rate.

I wrote about Kwarteng’s U-turn on Monday. It was spurred on by Sir Graham Brady of the 1922 Committee of Conservative backbenchers who can make or break a Prime Minister.

If Parliament had a vote on its abolition, the Government would have lost, leaving Liz Truss in a precarious position. On Monday, The Telegraph reported:

Rebels told journalists they were confident that at least 36 of them would vote with the Opposition on the 45p cut – the number needed to overturn Ms Truss’s working majority – and it became increasingly clear that the policy was unsustainable.

On Tuesday, the veteran editor and author Charles Moore wrote a Telegraph article implying that dropping the abolition of the top tax rate was the right thing to do under the circumstances, although he did say:

Yesterday, unfortunately, the wrong side won. Kwasi Kwarteng may be right that the top-rate cut had become “a terrible distraction” from the rest of the growth plan, but its removal is a setback for that plan. It weakens the Truss/Kwarteng attempt to change our economic culture and return to enterprise.

However, all is not lost.

The Spectator‘s Matthew Lynn has a cracking plan on how to get rid of the 45% tax rateby stealth:

The tax only raised a trivial £2 billion a year or so and prevented the UK from being the lowest-taxed major economy in Europe.

Getting rid of it might even raise more money. Clearly abolishing it in the middle of a cost-of-living crisis is too difficult politically. It is, however, still the right thing to do. So here’s what Truss – who has spent all her political capital on a botched attempt to scrap the tax – should do instead.

The PM should start by steadily raising the threshold so that it impacts far fewer people. If she’s feeling brave, she should take it all the way up to £500,000. In the United States, for example, the top rate of 37 per cent kicks in at $539,000 (£480,000) – and hardly anyone apart from a few fanatics on Twitter have much to say about that.

Next, Truss should add in various exemptions and allowances that could only be set against the top rate. Mortgage relief, for example, or travel expenses for work.

Finally, she should dramatically increase the thresholds for the 40 per cent rate as well. Given that £50,000 a year is a ridiculous level for people to start paying almost half their income in tax, Truss could push that all the way up to £150,000 a year, and then eventually to £200,000. And then once that had been achieved, the PM could merge the two top rates, and sell the whole package as an increase for the rich. Add up all those changes, and it would no longer exist.

Some of the biggest changes in political direction are best done under cover. Margaret Thatcher and Gordon Brown achieved some of their most significant policy changes by stealth: Thatcher did so with her slow and gradual reduction of trade union power; Brown with a steady expansion of the tax and welfare system that turned the UK into a country addicted to state support.

The Truss government – if it is not already too late for it to make any meaningful reforms – should learn to follow them. The 45 per cent rate should go: but it can only be done if nobody notices.

No doubt, either Truss or Kwarteng reads The Spectator. Let’s hope they did not miss this brilliant way forward on getting rid of the 45% tax rate. And never mind the OBR.

Poor Liz Truss.

My post yesterday about her and Chancellor Kwasi Kwarteng’s U-turn on the abolition of the 45% tax rate showed how much the media were running Truss’s premiership.

Cracks are showing

Unfortunately, the Conservative Party conference in Birmingham has revealed the factions among Conservative MPs opposed to either Truss or her policies.

This indicates that the cracks in the parliamentary Conservative Party likely began during the mourning period for Queen Elizabeth II in the same way that anti-Boris Conservative MPs sent their no-confidence letters to Sir Graham Brady of the 1922 Committee during the monarch’s Platinum Jubilee bank holiday weekend at the beginning of June.

No sooner had Parliament reconvened on the first Monday in June than Conservative MPs held a confidence vote on Boris Johnson’s premiership.

One name has been brought up in the overall rebellion against Liz Truss: Michael Gove.

Gove ‘a natural plotter’

On Monday evening, The Spectator‘s Isabel Hardman asked, ‘What does Michael Gove want?’

As I wrote yesterday, Gove even turned against the Prime Ministers under whom he served in Cabinet, beginning with his first PM, David Cameron. That was over Brexit. The victory went to Gove.

He worked against Boris Johnson’s leadership campaign in 2016, after Leave won the Brexit referendum on June 23. He told Boris he would lead his campaign then pulled out just before Boris was to have announced his candidacy.

It’s no surprise that, when Boris became PM in July 2019, he gave Gove Cabinet positions in a ‘Keep your enemies closer’ move. Those lasted until this past summer.

After the 2022 leadership contest, Gove said he would take a back seat. But did he?

He currently seems to be involved in stirring the pot with regard to benefits — welfare — increases involving the new Work and Pensions Secretary Chloe Smith, who said at conference earlier this week:

protecting the most vulnerable is a big priority for me.

Isabel Hardman points out (emphases mine):

It sounds quite anodyne, but given one of the big battles of the autumn is going to be over whether benefits are raised in line with inflation, it was a clear marker that Smith doesn’t think that trying to get some savings this way is the right thing to do. She’s not a noisy cabinet minister and is much more likely to make her arguments behind closed doors. But she does also have a very helpful backbench campaign led by someone who loves a public fight: Michael Gove.

Hardman says that Gove is busy at work, doing the rounds at the conference’s fringe events:

What is Gove’s endgame? He hasn’t packed up his bags since Kwarteng U-turned on the 45p: instead, he was still touring the fringe this evening. He has made clear that the benefit rise must go ahead, and many of his colleagues have made the same point to Kwarteng themselves.

Gove could decide to use Trade Secretary Kemi Badenoch in his manoeuvres. He backed her in the summer leadership contest until she lost, at which point he backed Rishi Sunak:

But even if it does, that’s not going to be the former minister’s last battle. Tory MPs are fascinated by where he wants this to end. Is he still hoping that Kemi Badenoch, who he initially backed for leader, could yet take over from Truss? Badenoch had a really good stint on the conference stage in the most lively session of the [Monday] afternoon programme. She had members eating out of her hand as she talked about taking pride in Britain, about immigration, and about culture wars. Perhaps Gove might want her star to rise further. Or perhaps he is still holding out for Rishi Sunak, who he later backed, and who is staying away from the conference to allow Liz Truss to ‘own the moment’.

In any event:

there is a lot of bad feeling among MPs about the way some parts of his [Sunak’s] campaign operated. Then again, there’s just a lot of bad feeling and mistrust in the party now. The one thing Truss has managed to unite her party on is that MPs in every faction are now annoyed with her.

This year’s conference meeting schedule, centred more around fringe events than the main speeches, is likely to deepen these rifts:

Tory conference has long been more stage-managed than other party meetings, but this year the official speeches from ministers have also been condensed into a very strange late afternoon slot lasting just two hours. The rest of the time is free for fringe meetings and plotting.

The main addresses are supposed to be content-light this year, which is unlikely to please Party members:

Ministers and their aides have been told they have to keep their addresses to the hall announcement-lite, which makes those two hours feel largely pointless.

Kwarteng not only had to do a U-turn on abolishing the 45% tax rate, he also was forced into bringing forward his medium-term fiscal plan. That’s two U-turns by the second day of conference:

Kwasi Kwarteng didn’t announce very much at all, even though his two U-turns have dominated the day’s agenda. This morning, the Chancellor dropped the plan to abolish the 45p rate of tax, and this evening it has emerged that he is also bringing forward his medium-term fiscal plan from 23 November – something ministers had been asked to hold the line on.

Work and Pensions Secretary Chloe Smith held up a script at a fringe event to show that what appears to be spontaneous is actually scripted in advance:

A clue to the next potential U-turn came not in one of the speeches but in one of the considerably more-scripted and stage-managed ‘discussions’. These have been going on for years at Conservative conference: a minister or two is relegated from a formal speaking slot to a cosy and allegedly informal sit-down with someone who is often a very nice and slightly nervous small business owner, charity pioneer or environmental campaigner. The chit-chats involve a suspiciously large sheaf of notes: indeed, in this particular ‘discussion’, Work and Pensions Secretary Chloe Smith largely abandoned the pretence that this was spontaneous and held her script up so she could read from it verbatim. But within that script, Smith had a line that she may well end up using against her ministerial colleagues such as Kwarteng in future. She told the hall that ‘we know that people are struggling with some of the costs that are rising’, adding: ‘That’s why protecting the most vulnerable is a big priority for me.’

Former Conservative MP Anne Widdecombe, who switched her allegiance to the Brexit Party and served as one of their MEPs in Brussels before the UK left the EU said that the Conservatives are in a dire state.

On Monday, she told GB News’s Bev Turner that the removal of the 45% tax band would have cost £2 billion at most, in contrast to the £150 billion bail out in order to help Britons with their energy bills.

She said that Truss and Kwarteng should have held their nerve and not caved in over their fiscal event plans from Friday, September 23. She surmises that they were worried about how the conference would go if they had stuck to their guns. Widdecombe said that they were aware of divisions in the Party but the tax rate U-turn, she said, would not win them any votes.

Turner said that removing the cap on bankers bonuses, also announced on September 23, would seem to be a more controversial move. Widdecombe, however, disagreed, explaining that the EU put a cap on bankers bonuses in place so that London would not be able to compete as well against Frankfurt and Paris in the financial services market. Removing the cap, she added, was part of the Brexit plan and, although it doesn’t seem so to ordinary people, will actually help the UK’s finances in the long term.

Bev Turner then turned Widdecombe’s thoughts to Michael Gove and Grant Shapps’s manoeuvres behind the scenes at conference. These included the objection to removing the 45% tax rate.

Widdecombe said:

Michael Gove is extremely dangerous. He spends all his time conspiring and plotting … I’ve known him for years … What he is not is a good colleague. He gets bees in his bonnet and sets out to destroy everything in his path. He’s done it with Boris … He is a plotter. He is a natural plotter. Can’t help himself

She said that Truss cannot have the whip removed from Gove, as Kwarteng has already U-turned on the 45% tax rate issue. For Truss to remove the whip after the fact, she said, would be useless. So, Truss can’t do anything to or about him for now.

Here’s the video, which is five-and-a-half minutes long:

How the U-turn came about

On Monday, October 3, The Sun‘s political editor Harry Cole got the scoop about how Truss and Kwarteng’s U-turn came about late on Sunday:

This is an incredible news story, revealing that Cabinet ministers did not know about the U-turn until they saw The Sun‘s website:

… our story, revealed at 12.20am, came as a shock to some of the most senior members of the government.

Four Cabinet ministers were enjoying a late-night drink when our story broke — leaving them speechless.

No one from No 10 had given them any warning.

After a brutal day of maulings from big beasts of the Tory party and dire warnings her mini-Budget would be voted down by MPs, the newbie PM was forced into a humiliating climbdown.

Gove and Shapps, along with other Rishi Sunak supporters, worked behind the scenes on Sunday:

Ex-Cabinet Ministers Grant Shapps, Julian Smith, Michael Gove, Mel Stride and Damian Green — all of whom backed Rishi Sunak — had spent the day stirring up rebellion and were confident that more than 40 MPs backed their concerns.

Was that why Sunak did not show up? He did say he wanted Truss ‘to own the moment’.

Graham Brady contacted Truss early on Sunday evening:

Sir Graham Brady, the chairman of the powerful 1922 Committee of Tory backbenchers, had been to see a worried Ms Truss at 7pm to warn her she did not have the numbers to ram her tax cut plans through Parliament — despite a majority of 71.

Meanwhile, Kwarteng was in Birmingham’s lively city centre, planning on tucking into a curry dinner. My commiserations go to him. Birmingham is home to some of the nation’s finest Indian restaurants:

… her screeching about-turn would come as a shock to the Chancellor, who had been about to tuck into a beef curry at an upmarket restaurant across town.

He left his dinner before his main course turned up, rushing back for crisis talks with Truss, who told him: “It’s time to rip off the plaster.”

Kwarteng agreed to the U-turn, sensing trouble ahead:

Once on board, Mr Kwarteng was told he would have to be the face of the surrender the next day.

But it was a painful blow as he had already trailed his big speech to the conference into the next day’s papers, insisting there would be no U-turns and saying: “We must stay the course.”

Taking to the stage on Monday afternoon for that speech, an exasperated Chancellor said: “What a day.”

The divisions are many and deep:

The mood among some Cabinet ministers is one of despair at the state of the Tory party, which is at risk of becoming unmanageable.

And that, in turn, will leave the Government unable to actually govern, leaving the country adrift at the worst possible time.

There are potential mutineers everywhere Truss turns.

After 12 years of Tory rule, there are more than 50 sacked and embittered ex-ministers who do not have much to lose.

This is a group that includes MPs who served under Theresa May and continue to be enraged by her Brexit downfall.

Then there are supporters of Rishi Sunak, who are enjoying the “I told you so” moment.

Some still think it’s possible to kill Truss now and have Rishi anointed in a coronation.

Throw in the still-ongoing Brexit wars — Truss, having converted from Remain, is firmly in the Remainiac crosshairs — and it’s a poisonous, chaotic mix.

One Cabinet minister said: “They’ve taken the bat off Boris, broken it into pieces and given chunks to the different warring sides to beat each other with. It’s like Lord of the Flies.”

However, a week is a long time in politics:

“All’s not lost yet”, one minister said.

A week is a long time. We have two years to turn this around. We might not win the next election — but we can at least make ourselves competitive”.

City AM‘s Andy Silvester doesn’t hold out much hope, though:

What the public think

It’s difficult for those of us who are not economists to know what to believe about the upper tax rate U-turn.

And we trust journalists even less than ourselves. We are doing better researching the matter online through independent sites rather than the mainstream media.

The media told us that abolishing the upper rate of tax would affect Sterling. Hmm. On Tuesday morning, it was holding steady after the Bank of England’s intervention at the end of last week:

Did the U-turn have anything to do with exchange rates, though?

One Guido Fawkes reader said that it did not:

Good job Kwasi dropped the 45p tax cut, which, according to the MSM, affected the pound. Anyone knows it did not but he can use it to his advantage: if I borrow more for benefits, giving away money, it will damage the pound and interest rates causing more financial hardship to working tax payers.

So I would love to help but need to get inflation down.

Again being run by all the MSM at the same time to affect the government its disgusting.

He blames Michael Gove and, possibly, Boris’s former adviser Dominic Cummings:

Gove and likely helped by Cummings … maybe Truss could ask Boris come out against him that he is damaging the party first him now Truss. Truss did stay loyal to Boris. Gove destroying his own party does not make him a formidable politician

Another commenter cannot understand what the rebels hope to achieve:

What on earth are the rebels trying to achieve? Collapse the government and shoo-in Labour? If not- what’s the end-game? Parachute in Sunak against the expressed wishes of the grassroots party membership? That’ll end well. Ultimately- Truss was chosen by the members on the basis of pursuing a pro-business, pro-growth agenda. She is now trying to do exactly that and is being undermined by people who offer no viable alternative.

Someone else said the anti-Truss movement is reminiscent of the anti-Brexit rebellion Theresa May had to endure in 2019:

It’s looking very much like this is going to be a repeat of the debacle over Brexit.

Mr Gove should have the good grace to accept the wishes of all Conservative Party members, who voted for Liz Truss, and not the legislative agenda of a few disaffected Blairite “Conservative” MPs, who bizarrrely seem to think that more of the same is going to free us from the social and financial quagmire such policy has led us to in the last 25 years.

I give the current government about 6 months.

Another said that Gove is firmly to blame:

One Cabinet Secretary telling the Daily Express they weren’t surprised by Mr Gove’s actions because he is a “disloyal ****”. When told about Mr Gove’s remarks another senior Cabinet Minister used the same four-letter expletive.

The next battle will be over how much to increase benefits: average salary rates or the inflation rate:

Chief whip needs to get a grip and threaten deselection to all those publicly declaring their duplicity and treachery. Removing the whip from Gove would be a good start. No rise in benefits when there are mass vacancies to be filled and when there is no pay rise for the private sector. Too many different factions in the Tories so no chance of collective responsibility.

More on that tomorrow.

The Conservative Party leadership contest hustings ended in London’s Wembley Arena on Wednesday, August 31.

Did it last too long? We think so only because we are having a cost of living crisis with more Project Fear pumped into our brains every day. Critics should remember that Parliament is in summer recess anyway. If things were normal with the economy, crime levels and the NHS, we wouldn’t have minded so much.

Remember, if this had been a Labour leadership contest, no one would have moaned. The media would have bent over backwards justifying it.

What I do mind, however, is that Parliament will be meeting only for a short time in September then adjourning so that the Conservatives, Labour and the Lib Dems can scuttle off to their respective Party conferences. Surely, parliamentary business can continue in the Chamber during September. Not every MP needs to be at a conference every day. Most of them are held on weekends, and Parliament does not meet on Fridays, so there is no reason why the Commons cannot meet during September.

Back to the hustings.

London

I’ll start with the last one in London, which was excellent:

Nick Ferrari, the host of the morning show on LBC (radio), was the moderator.

The sound quality was good as was the music. It was highly professional and everyone looked as if they enjoyed being there.

The Conservative audience was diverse: all ethnic groups and all age groups. There were even a few hipsters present.

The first hour was not filmed. Author, national wit, Celebrity Gogglebox star and former Conservative MP Gyles Brandreth, 74, opened proceedings. I wish I could have seen him. Amazingly, he broke his elbow the day before in Fife, Scotland, but still showed up at Wembley Arena the next day.

In the video, Nick Ferrari comes on at 4:13 to introduce the format, which is consistent with the other Conservative Party hustings. 

At this point in the contest, Liz Truss was seen by pollsters and bookmakers to be way ahead of Rishi Sunak, so the introductory theme was one of unity, meaning: no hard feelings, folks, our next job is to defeat Keir Starmer’s Labour.

That is the message Iain Duncan Smith MP gave in his endorsement for Liz Truss (6:09), reminding the audience that:

she cut her political teeth in London.

Greenwich, to be precise.

Liz Truss’s campaign video followed (13:41), then she appeared on stage, coming out like a winner and invoking the England Lionesses’ ladies football win at the Euros, talking about an ‘aspiration nation’ and pronouncing London:

the greatest city on earth.

After Liz finished her speech, Michael Gove was next (26:08). He endorsed Rishi.

Gove also spoke about unity and had kind — penitential? — words for Boris, which met with a resounding wall of applause. He thanked Boris for ‘the biggest vaccine rollout in Europe’ and for being the first to support Ukraine at the end of February:

Boris, thank you for your service.

Rishi rushed on to the stage after his cringeworthy Underdog campaign video played (34:44).

The crowd went wild with cries of ‘Rishi, Rishi’ (36:00). His parents were in the audience and the cameras got several shots of them when their son was on stage. They sat between Rishi’s wife and Michael Gove.

He said:

We value who you are not what you are.

He paid Liz credit for being:

a proud and passionate Conservative.

In his speech, he mentioned tackling the decades-old problem of grooming gangs and said he would get to grips with public safety and illegal migration.

Then it was time for Liz to answer Nick Ferrari’s and the audience’s questions (51:33).

Afterwards came Rishi’s turn (1:25:00).

Andrew Stephenson, the co-chairman of the Conservative Party closed proceedings (1:58:26) and asked the two candidates back on stage for a final momentary appearance.

With that, the 12th and final hustings came to a close.

The Telegraph has a good recap. Emphases mine below.

Liz has had a good campaign:

… the past seven weeks have seen momentum firmly swing towards Liz Truss, and it would be a major political shock if Mr Sunak were be unveiled as the next prime minister on Monday.

Polling suggests the Foreign Secretary has a lead of around 30 points among Tory members, who have been drawn to her promises to immediately cut taxes and instigate radical economic reform.

By and large, she has also been better received at the hustings events that have taken place around the country, routinely winning applause for her positions on National Insurance, fracking and transgender issues.

Around 6,000 Conservative Party members attended the London hustings and heard Gyles Brandreth’s introduction:

Gyles Brandreth, the broadcaster and former Tory MP whose arm is in a sling, has just given a speech to the Wembley Arena crowd.

“How exciting it is that two people who are intelligent, committed, capable, passionate about their country are actually ready to give service,” he said.

“So whatever the result is it’s going to be a great result for the United Kingdom. And whatever the result is at the end of this election, we are going to come together and support whoever the victor is to the hilt! No question of that.”

He closed with a poem:

From quiet homes and first beginning
Out to the undiscovered ends,
There’s nothing worth the wear of winning
But laughter and the love of friends.

Peter Booth, the chairman of the National Convention, appeared next, giving the audience guidelines on asking their questions.

The video misses out a lone protester, angry about energy charges:

A protester has just run in front of the stage – a man in a dark suit holding a sign that said dontpay.uk, writes Tony Diver, our Whitehall Correspondent, from Wembley Arena.

He was escorted out immediately by two security guards as he ran in front of cameras.

Liz put a lot of blame for London’s woes on Mayor Sadiq Khan’s shoulders:

Liz Truss tells the hustings it is impossible for Britain to succeed with London but it has been “let down by Sadiq Khan”.

“Sadiq Khan is anti-everything – he’s anti-car, he’s anti-business, he’s anti-opportunity and he is holding London back. And I don’t believe those people who say London is a Labour city. No, it is not. London is a city where people opportunities and they want to get on in life.

“And that’s what we can deliver, and we can make London Conservative again.”

Sound familiar?

Nationally:

Ms Truss warns we all face dark times, vowing to reverse National Insurance and impose a moratorium on the green levy, while keeping corporation tax low.

These are her pledges:

I would be honoured to be your prime minister, first of all to deliver for the United Kingdom, to deliver an election victory for the Conservatives in 2024, and to make London a Conservative city again.

The applause for Rishi was greater than it was for Liz:

The cheers in the room are significantly louder and longer for Rishi than Liz. Audience members are on their feet and chanting his name, writes Tony Diver, our Whitehall Correspondent.

“Thank you! Thank you, Wembley!” Mr Sunak responds, after entering to The Weeknd’s Blinding Lights.

He pledged an ethical approach, if elected:

He promises to lead an administration “with integrity and decency at the heart of everything we do”.

Nick Ferrari tried to box Liz into a corner over domestic issues. She ably answered:

I’m the Foreign Secretary and my job is to focus on key foreign affairs issues.

She pledged that there would be no new taxes in her Government.

She also ruled out energy rationing.

She said that she would not refurbish the Downing Street flat:

Liz Truss responds that as a Yorkshirewoman, she believes in “value for money and not buying new things if you’ve got things that are perfectly good to use”.

“I don’t think I’m going to have time to think about the wallpaper or the flooring.”

The papers largely picked up on her possible moratorium for ‘smart motorways’, those without a hard shoulder for emergencies:

Asked if she will restore hard shoulders to motorways and change speed limits from mandatory to advisory, Ms Truss replies: “I absolutely think that we need to review them and stop them if they are not working as soon as possible.

“And all the evidence I have suggests they’re not working. We need to be prepared to look at that. I do believe that the smart motorways experiment hasn’t worked.”

Rishi defended his windfall tax, which the big companies can avoid if they prove they will invest more in the UK:

We’ve got it in place, but as I said in the situation that we’re in it was the right thing to do, and I’m glad I did it, to be honest.

He also said that his plan to tackle inflation was the correct one:

I can guarantee that it will fall far faster with my plan than it will with anyone else’s.

He, too, criticised Sadiq Khan:

Crime has become “intolerable” in London, adds Rishi Sunak, and “the first thing we need to do is hold to account Sadiq Khan for his failings”.

“If you are prepared as a Mayor to do the right things… For example, stop and search. It’s an effective policing tactic“.

Unlike Liz, who was relieved not to have to stand up for audience questions, Rishi stood up and worked the stage.

He brought up ethics again:

In a sentence, does he think Boris Johnson was hard done by? “When it comes to those ethical issues, we can’t be on the wrong side of them. We need to set a clear direction from the top, I would reappoint an ethics adviser because it sends a strong signal from the top.”

The Telegraph‘s article ends with:

Liz Truss seems like a dead cert to become prime minister on Tuesday, and elements of Rishi Sunak’s comments tonight shied away from the personal attacks that have characterised this bitter blue-on-blue campaign to lavish praise on his rival.

The cheers and chants at Wembley Arena tonight – far louder for Mr Sunak than the Foreign Secretary – told a different story from the grassroots polling, which suggests she has a lead of around 30 percentage points

Boris Johnson’s successor is likely to find themselves facing even greater challenges, and must also unite a party fractured by weeks of public division and disagreement.

Veteran political sketch writer Quentin Letts had this to say in The Times:

Surveying a throbbing crowd of 7,000 Tory activists, Sunak gasped “thank you!” nine times, the stage lights bouncing blindingly off his grinning ivories. He strode the large stage like an American presidential candidate and, for a man who must have seen predictions that he will be slaughtered when the result is announced on Monday, maintained an amazing level of pitch and thrust.

He even had an emotive card up his sleeve when he announced that his “two people who inspired me to go into public service are actually here tonight — my mum and dad”. Jolly proud they looked, too. Rishi thanked his “loving, kind wife — you know what you mean to me, you chose to give up your high heels and take a chance on the short kid with a backpack”. The crowd, audibly more pro-Sunak than some of the regional hustings, shouted: “Reeshi! Reeshi!”

Truss entered to strains of Taylor Swift’s Change but her tactics for the evening were more cautious, playing down the clock. She was less sprightly in the opening spiels but came to life more in the questions that followed. In her opening remarks she pushed her voice hard, making it sound more strident and bunged-up. A reply to a question on Israel flew off the bat and had a Sunak supporter clapping hard. She also dealt firmly with some fluff about what sort of limousine she wanted and how she might decorate the No 10 flat. Where her campaign has succeeded with Tory activists has been in its simplicity: the basic message, whacked time and again, of lower taxes and a smaller state.

And so the campaign ends. What a festival for SW1 wonks it has been, allowing for oodles of analysis and fake crossness. The rest of the country, enjoying (lucky devils) their August, has possibly taken less notice of the contest. Sunak, smoother, more fluent, more the establishment’s idea of a PM, started it as favourite. He ended last night by replaying that dreadful tough-Cockney video film about him being the underdog …

The Wembley crowd’s questions were about smart motorways and advisory speed limits , trans rights, gas prices for companies, corporate tax dodging, Ukraine, childcare costs, property prices and, commendably, the future of West End theatre.

Like Quentin Letts, I haven’t gone into too many policy proposals because whoever gets in will be hit hard with reality.

There is an illusion that Party members of any stripe are being let into an honest discussion about what they want to see in a new Government. I do not believe this is what actually happens:

As evidence, let’s cast our minds back to July 2019 and Boris Johnson’s campaign.

He was going to ask the Queen if she wanted a new yacht to replace Britannia, which is now moored as a museum:

He also said that Sadiq Khan needed to go. Khan was re-elected in 2021. The Conservatives, for whatever reason, gave no support to their candidate Shaun Bailey. I cannot fathom why not, since Boris was Khan’s predecessor. Shaun Bailey is a level-headed Conservative.

This is from the July 18, 2019 edition of The Express. Note the mention of housing and accompanying infrastructure, too. None of this happened, perhaps because of the pandemic. Even so, it shows how empty campaign promises are:

The Tory frontrunner savaged Mr Khan out of nowhere, branding him “useless” and “invertebrate” and “not a patch on the old guy.” The onslaught was woven into Mr Johnson’s wider solution to a question that had been posed on monocultural housing policies. A member of the audience asked the former London Mayor: “How will you ensure the Government’s housing policies don’t lend themselves into creating ethnic categories inadvertently?”

Without hesitation, Mr Johnson blasted: “You build fantastic housing in the right place.

“And you put in superb transport infrastructure so you can create mixed communities where there are high quality jobs.

“And if you look at the disasters of planning in the ‘60s and ‘70s where monocultural estates were built, it’s because there simply wasn’t the transport infrastructure.

“Look around London and look at the estates outside London – you can see exactly what went wrong.”

That said, in the end, Boris did deliver on these pledges:

Other hustings

I purposely didn’t cover half the hustings in separate posts, leaving off with the August 11 one in Cheltenham.

A summary of the others follows.

Perth

The next one took place in Perth, Scotland, on August 16. It was unfortunate that pro-independence supporters ruined it with verbally violent posters, throwing eggs and by spitting on older Scottish Conservative members. The SNP denied any involvement.

The Mail had a summary of what the candidates said:

Liz Truss tonight vowed to ‘never, ever let our family be split up’ as the Tory leadership frontrunner insisted she would not allow another Scottish independence referendum if she becomes prime minister.

Speaking at the latest Conservative hustings event in Perth, the Foreign Secretary promised to battle Nicola Sturgeon‘s ‘agenda of separatism’ as she condemned the First Minister and her SNP government for having ‘let down’ Scottish voters.

Ms Truss accused the SNP of ignoring issues such as schools, hospitals and public transport as they chase another Scottish independence referendum.

Her rival for the Tory leadership, Rishi Sunak, also used tonight’s hustings to take a swipe at Ms Sturgeon, as he vowed to ‘call out’ the Scottish Government’s record on drug and alcohol abuse.

He claimed it was ‘completely barmy’ for the SNP to be agitating for a ‘divisive and unecessary constitutional referendum’ amid the cost-of-living crisis. 

Ms Truss and Mr Sunak addressed Tory members inside Perth Concert Hall after reports of ugly scenes outside the hustings venue earlier in the evening.

Conservative Party co-chair Andrew Stephenson demanded Ms Sturgeon ‘unequivocally condemn’ the ‘vile behaviour’ of Scottish independence campaigners.

Belfast

The candidates converged on Belfast the next day, Wednesday, August 17:

I felt very sorry for the Northern Ireland Conservatives gathered there. The party only has 300 members, and they have no voice in Westminster.

A clear disconnect emerged between the candidates and the Party members. Everyone looked uncomfortable.

For that reason, this hustings is well worth watching.

It became apparent that neither Liz nor Rishi understands the Conservative Northern Ireland mindset. I’m no expert, but even I could have dealt with some of those issues better than they did.

The moment that sticks in my mind was when someone asked why Westminster is foisting abortion clinics on Northern Ireland. Liz matter-of-factly — and rather coldly — responded that the rest of the UK has them, so Northern Ireland has to have them, too.

Abortion is far from being the norm there, and, as Northern Ireland has a devolved government, it should have been their decision, not Parliament’s.

Madeline Grant summarised the disconnect in The Telegraph:

Some English Conservatives might be surprised to learn of the existence of their fellow party members across the Irish Sea, let alone that they had a vote in the leadership contest. Yet seatless and marooned from CCHQ – and perhaps because of this – Ulster Tories are the ultimate Tories. This wasn’t your average Home Counties cakewalk, there were questions on more intractable subjects than you’d get elsewhere – abortion, China, the perils of a cashless society. Some of the questioners began with a little intro about how long they’d been party members, reminiscent of Alcoholics Anonymous.

A flamboyant chap in a maroon vest had made a journey almost as ponderous as Truss’s own political leap from Lib Dem republican to Tory monarchist – he’d moved to South Antrim after heading up ‘Conservatives Abroad’ in South Korea. Making a similarly unexplained leap, he proceeded to compare the fight against abortion in Northern Ireland to Britain’s fight against the slave trade in the 19th century. Would Liz “be a modern day William Wilberforce, and end abortion and infanticide in Northern Ireland?” he asked. Truss politely declined to take up the mantle.

Unlike Madeline Grant, I did not find the Belfast hustings amusing in the slightest. It was the saddest one of the lot.

Verdict: Must do better.

Manchester

On Friday, August 19, our candidates were back on the mainland for the hustings in Manchester, which Alastair Stewart from GB News moderated (start at 6:30):

Alastair Stewart is a television veteran and knows what questions to ask:

He won high praise from Liz:

Rishi’s campaign team launched his second campaign film, The Underdog, at this hustings. It was so awful, I wanted to slip through the floor in embarrassment for him.

He told his family story and said that Conservative values were ‘patriotism, family, service, hard work’:

He turned defensive (again) when he told Stewart that he was winning the war on inflation and being responsible with borrowing:

He told an audience member, ‘We’re standing up to Russian aggression’:

Liz said that the police must fight crime, not patrol tweets:

She also said that left-wing politics dominates today’s socio-political debates:

Rishi, too, was tired of leftist dominance — and Manchester’s mayor, former Labour MP Andy Burnham. GB News reported:

Rishi Sunak has vowed to take on the “lefty woke culture that seems to want to cancel our history, our values and our women.”

… Speaking to the audience, Mr Sunak pledged to “restore trust by delivering on the things that matter to people”.

He continued: “That’s why I’ve set out a plan to finally start reforming the NHS so that we can talk less about how much money we can put into it and more in the healthcare that we want to get out of it.

“It’s why I want to take on this lefty woke culture that seems to want to cancel our history, our values and our women.

“And it’s why we need to restore trust of communities right here by calling out the failures of the Labour mayor Andy Burnham because it simply isn’t good enough.

“Just look at the record, a police force that was put into special measures, the highest rates of knife crimes almost across the UK.”

He also talked about illegal migration, details of which are available on his website:

“… I’ve set out a radical plan to finally get to grips with illegal migration.

“Because for too long we’ve turned on our TV screens and seen the scenes of people coming here on boats illegally and it is wrong.”

His comments come days after the number of migrants to have crossed the Channel so far this year passed 21,000.

Another GB News article about the hustings has more:

He said: “I want to move away from the European definition of what an asylum seeker is, because it is too broad and it gets exploited by lefty lawyers.

“When people shouldn’t be here we must be able to send them back, it’s as simple as that.

Was the next bit a dig at Liz, our Foreign Secretary and former Secretary of State for International Trade?

“We’ve got to toughen up our foreign policy. At the moment we have a situation, I found it bonkers, we will go to a country, we’ll talk to them about a trade deal we want to do with them, but also potentially be giving them actual foreign aid.

“But at the same time we don’t say to them ‘hang on, you need to take back your failed asylum seekers’, that’s clearly wrong.”

Liz also had something to say about illegal immigration:

Promoting the much maligned Rwanda policy, which saw its first planned flight grounded on the tarmac, Ms Truss vowed to expand the scheme to other countries if she was elected as Prime Minister.

She said: “What we need to find is a permanent home for those people.

“The way to solve this issue is to find a way of making sure there is a long term home for people who are involved in illegal immigration.

“The real issue is at present people are able to get on the phone to their lawyers when they get on a plane and evade being sent to Rwanda and that is the issue we have to fix, that is about the ECHR.”

The candidates are not miles apart.

Liz also discussed her vision for the North:

What I want to see is a successful north of England where everyone has opportunities and we link up the great cities of the north.

From Liverpool to Manchester to Leeds and beyond and also of course Bradford.

And that’s why I want to build Northern Powerhouse rail and I want those opportunities to be powered by enterprise and business unleashing investment right across the country.

I want us to make the M62 the superhighway to success.

Unfortunately for Rishi, his attempts at being a man of the people failed, as the Mail reported:

Asked at the hustings event how, as a Southampton football club fan, he could get back to ‘winning ways’ in the battle to become Boris Johnson‘s replacement, Mr Sunak attempted to make light of his woes.

But his effort at friendly banter with the Manchester audience saw him blunder in his football knowledge.

‘I’m going to be unpopular for saying it here – starting by beating United this weekend!,’ Mr Sunak told the event.

It was quickly noted how Southampton are not due to play Manchester United until 27th August and would, in fact, be playing Leicester City this weekend.

Mr Sunak’s own goal came just two days after he was mocked for claiming to always enjoy a McDonald’s breakfast wrap when out with his daughters – despite the item having not been on sale since March 2020.

Yet, the former chancellor’s campaign was handed a boost tonight when Michael Gove backed him to be the next Conservative leader.

Mr Gove, the former Levelling Up secretary who was sacked by Mr Johnson last month, accused Ms Truss of taking a ‘holiday from reality’ with her vow to tackle the cost-of-living crisis by prioritising tax cuts.

Birmingham

On August 23, Times Radio’s John Pienaar, formerly of the BBC, moderated the hustings in Birmingham, the UK’s second largest city:

Chancellor Nadhim Zahawi went on stage to endorse Liz.

Liz then went on stage (5:36) and embraced him to big applause and cheers from the audience.

Andrew Mitchell followed her by announcing his support for Rishi (16:34). Rishi’s newer campaign film, The Underdog, was played.

Rishi then pledged to continue levelling up the Midlands, as he has been doing (21:47).

Of his speech, Pienaar said (33:01):

That was punchy!

Someone in the audience booed when Liz took to the stage for her Q&A (33:49).

Pienaar gave her a hard time in the beginning, but she got a huge round of applause from the audience. 

Recall that The Times came out for Rishi almost immediately in July.

However, Rishi also had his beefs with Pienaar. He looked irritated (yet again) and said (1:06:00):

John, you’re acting as if this is already over.

He went on to explain how well his furlough programme worked during the pandemic (1:18:00).

On the subject of Scottish independence, he said that nationalism (1:34:00):

is a romantic ideal.

Then he complained:

There’s not been a single question about tax!

He then expanded on corporation tax and the largest companies. He became really agitated in an oddly friendly way.

This tells us tax is his main consideration, nothing else, no matter what he says.

The man is a technocrat.

Guido Fawkes had an excellent round up of sound bites, starting with Liz (emphases his):

If you want a flavour of the current state of Tory hustings, last night in Birmingham Liz Truss came out with the following two statements within 60 seconds of each other: “I’m not a massive fan of mice”, and asked how she’d feel in the event of having to launch a nuclear weapons strike, “I think it’s an important duty of the PM and I’m ready to do that.” A casually blasé statement committing the UK to potential nuclear armageddon…

Also:

Suggesting she won’t replace the government ethics adviser, saying: “The PM needs to take responsibility – you cannot outsource ethics to an adviser”

Suggesting she would redirect this year’s £12 billion extra funding for the NHS into social care

Asked why she cut funds to the Environment agency as DEFRA secretary she said “I think there’s a way with the way utilities are regulated. We were one of the first countries to regulate and privatise utilities but the world has moved on since then… some of those regulators get mission creep, they don’t necessarily keep the market as properly as they should. I certainly think it’s the case that water companies need to be better are stopping leaks, I think they should be better at dealing with pollution and we need to sort that out.” Sounds a lot like Guido’s story last Friday that she believes in a single utilities regulator

As for Rishi:

Rishi’s answers last night were less alarming albeit equally newsworthy. Primarily, he refused to commit to voting for Liz’s proposed emergency budget should he lose, saying it is a hypothetical question. He reiterated his belief that her tax cut plans will result in “millions of people facing destitution.”

Rishi suggested UK aid programmes should be cut in countries that refuse to accept deportations of “failed asylum seekers” from Britain.

Rishi spoke movingly of yesterday’s horrific shooting of a nine-year-old in Liverpool, saying he reacted by calling his wife, and daughter who is the same age as the victim. Rishi says the government needs to finish the Tories’ 2019 policy of recruiting 20,000 policemen.

Let’s go to the Rishi-supporting Times for their journalists’ verdicts.

Daniel Finkelstein said:

Liz Truss is far better speaking without notes and, having delivered the same remarks over and over, she no longer needs them. Both her opening remarks and her answers to what will have been familiar questions were much better than in the early stages of the campaign. There were even flashes of the humour she shows in private …

But, however good Truss may now be, she still trails Sunak, who is just a better performer. Particularly in his answers, he was fluent, tough and compelling. His opening comments about the flaws in the Truss plan — suggesting it would leave many people destitute — were particularly arresting.

… Whoever wins, their policies have to appeal to those who are not Conservatives and need to actually work.

Winner: Rishi Sunak

Katy Balls said:

The state of the Tory leadership contest can be summed up in the video that welcomed Rishi Sunak to the stage. Last week, his team changed it from the montage played in the earlier hustings. It now has a Ray Winstone-style gangster voice boom that the former chancellor is the underdog — and the country loves an underdog. It points to Sunak’s dilemma: if the polls are correct, only something drastic can change the state of play.

Although he was well received in the hall, with some of the loudest cheers, it’s hard to pinpoint a “change moment” from the display. He again depicted himself as the only candidate willing to tell people hard truths about the economy. He tried again to invoke the spirit of Thatcher by pointing out that many of those who had worked with the late prime minister were backing his plan …

It helped Truss that she focused on her own plans. She came across as confident and assured. This also played well to a party growing tired of blue-on-blue. As the frontrunner, she needs only to hold the line — and she did that.

Winner: Liz Truss

Patrick Maguire said that both won but in different ways:

So how did Truss fare? As a rubber-chicken circuit speaker, just fine. They loved the answers on grammar schools, wokery and nukes. But as a prospective PM? On the biggest question — what to do about rampant inflation and crippling energy costs — Truss was revealingly unrevealing. Cagey, even. Asked how pensioners and the poor would be shielded from the coming storm, she said only that she would “look at” helping them. How to fund social care once Sunak’s £13 billion national insurance hike is scrapped? “General taxation.” Her cure for the mouse infestation in the Commons — “more cats” — was more detailed and offered with a good deal more enthusiasm.

Sunak attacked her economics with the kamikaze self-confidence that is likelier than not to lose him this race. It’s telling. He is as sure as Ted Heath was that he will, in time, be vindicated by his rival’s demise. Sunak is embracing the inevitable. Has Truss? She sounded as if she could not admit to herself — let alone the country — that compromise is coming.

Winner: on the clapometer, Truss. But Sunak won the argument.

Norwich

On Thursday, August 25, talkRADIO’s Julia Hartley-Brewer moderated the TalkTV hustings in Norwich in East Anglia.

Hartley-Brewer had a great set of questions for the candidates. One wonders if some came from her and TalkTV’s listeners:

While she was preparing her questions, Guido says that some Conservative MPs were annoyed with Rishi:

Allies of Liz’s have slammed Rishi over his “scorched earth” policy, saying it risks destroying chances of bringing the party back together again when the contest is over. They accuse him of “behaving like a wounded stoat” and “framing us as Tory scum” over the course of the campaign. Given he said the likely next PM’s plans would lead to mass homelessness, they’re arguably correct…

Guido also included a photo of Rishi at his mother’s former pharmacy in Southampton. Stefan Rousseau is an incomparable photographer:

His mother was a chemist you know…

I just checked Rousseau’s Twitter feed, and here’s the exterior of the pharmacy:

The Telegraph had a running commentary on the candidates’ day and the hustings.

This was the day after Rishi’s criticism of coronavirus policy appeared in The Spectator:

Rishi Sunak’s interview with The Spectator magazine – in which he revealed that he was told not to talk about the “trade offs” of lockdown – has prompted a row with former Downing Street employees.

He had more difficulties when he went on BBC Radio 4’s The World at One:

On whether he will quit if he loses the leadership vote, Mr Sunak told BBC Radio 4’s World at One earlier today: “Absolutely not. Of course not.

“And I would dispute the characterisation. I’m working incredibly hard going around the country talking about my ideas for the future, and actually having a very positive reception where I’m going, and I think there’s everything left to play for.

“There’s still weeks to run in this campaign, and that’s why I’m continuing to give it everything I’ve got.”

Meanwhile, Liz visited a food manufacturing plant:

Liz Truss has been out and about in Norwich today, visiting Condimentum Ltd at the Food Enterprise Park in Norwich. 

Ms Truss told reporters at the factory near the Norfolk city that tax cuts and boosting energy supply were the key to addressing the cost-of-living crunch.

I think they make Colman’s Mustard there.

Now on to the hustings.

The co-chairman of the Conservative Party defended the length of the leadership campaign:

Andrew Stephenson, chairman of the Conservative Party, addresses the Norwich audience. He defends the leadership contest amid criticism that it has dragged on for too long. 

Health Secretary Steve Barclay came out in support of Rishi.

Rishi said that levelling up is for all corners of the UK:

Levelling up is not just about big cities and the north – it is for everyone, including right here in east Anglia, he says and receives a round of applause.

Work and Pensions Secretary Therese Coffey declared her support for Liz:

She ends her introduction by saying: “Back Liz for leader, you can trust her to deliver.”

As Liz, the MP for South West Norfolk, was on home turf, she got a standing ovation:

Huge applause and a standing ovation for Liz Truss as she takes the stage, who is the MP for South West Norfolk so this is very much home turf for her. 

“We have travelled around the entire United Kingdon but there is nothing better than being back in my adopted county of Norfolk,” she says, and the audience break out into applause once again.

Rishi had to answer a question about lockdown:

Rishi Sunak defends his interview in the Spectator, saying one of the most “tragic” aspects of lockdown was the damage to children of school closures

He said it is always important to have an honest discussion about “trade-offs”, adding: “If something sounds too good to be true it probably is”.

Hartley-Brewer presented each candidate with the same series of quick-fire questions.

These were Rishi’s answers:

Can you name a single public service that works well? The furlough scheme.

Macron, friend or foe? Friend

Mask mandates or no mask mandates? No mask mandates

Is a trans woman a woman? No

Who would you rather be stuck in a lift with, Keir Starmer or Nicola Sturgeon? Take the stairs

If not you, who would be a better PM, Boris Johnson or Liz Truss? Liz Truss

Hartley-Brewer had to get tough with a heckler:

Rishi Sunak is heckled by an audience member and Julia Hartley-Brewer intervenes telling him to “Sit down, Sir!”

Meanwhile another audience member asks about housing supply. Rishi Sunak says we need to overcome our aversion to “flat pack” housing.

He says he wants to help young people get on the housing ladder much faster by “turbo-charging” a scheme that allows first time buyers to purchase a home with a small deposit.

I can’t believe he still peddles his daughters’ concern for the environment when he’s just had a full-size swimming pool installed at his home. Egregious:

Rishi Sunak tells the audience that the only thing his daughters ask him about is: “Daddy, what are you going to do for the environment?”

Then it was Liz’s turn.

Hartley-Brewer asked her about lockdown:

I did question lockdown, Liz Truss says. 

“Clearly in retrospect, we did do too much. It was too draconian. I don’t think we should have closed schools,” she said. “A lot of children have ended up suffering.”

She adds: “I can assure you that I would never impose a lockdown if I am selected as PM.”

These were Liz’s answers to the quick-fire questions:

Name me a single public service that works well: Our education system has got a hell of a lot better in the last ten years. 

Macron, friend or foe? The jury’s out. If I become PM I will judge him on deeds not words

Mask mandates or no mask mandates? No mask mandates

Is a trans woman a woman? No

Who would you rather be stuck in a lift with, Keir Starmer or Nicola Sturgeon? I think Nicola Sturgeon. I’d hope to persuade her to stop being a separatist by the time we got to the ground floor.

If not you, who would be a better PM, Boris Johnson or Liz Truss? Boris Johnson

Hartley-Brewer asked her about unisex changing rooms at Marks & Spencer:

“M&S is a shop, they can decide their policies as they see fit,” Ms Truss said. “I have been to the bra fitting service in M&S and it is behind a curtain. No one has ever tried to open the curtain while I am in there.”

Liz explained why she does not want asylum seekers to work:

The Foreign Secretary says we also have huge numbers of people who are “economically inactive” and it should be our “first port of call” to get those people into work.

The reason why we don’t allow asylum seekers to work is because the UK will become “even more of a magnate” for people to travel here illegally, she adds.

Good answer.

Liz reiterated her support for Net Zero.

Media outlets picked up on the candidates’ responses to the ‘stuck in a lift’ question:

https://image.vuukle.com/af49e1b0-abd8-4147-a73a-be8ab0fdccee-3e389bcd-aee7-410a-99bc-6316b427958c

Their divergent answers on Emmanuel Macron also made the news.

Liz got both barrels, from Labour and Conservatives alike. The BBC reported:

… she was asked if Mr Macron was a “friend or foe” of the UK at a Tory leadership hustings.

She added that if elected PM she would judge him on “deeds not words”.

But Labour’s David Lammy accused Ms Truss of “a woeful lack of judgement”, saying she had insulted one of “Britain’s closest allies”.

Ms Truss, widely seen as the clear front-runner to be the next Conservative leader and prime minister, made the remark at the penultimate leadership hustings in Norwich, to loud applause.

Her comment came at the end of the hustings during a series of “quickfire questions” posed by the host, TalkTV’s Julia Hartley-Brewer.

When asked the same question Mr Sunak said Mr Macron was a “friend”.

One Conservative minister said Ms Truss’s comments had “completely undermined our relationship with France”, calling her a “faux Thatcher”, a reference to the infamously Eurosceptic former Tory prime minister.

In a tweet, former foreign minister Alistair Burt said Ms Truss has made a “serious error” and should have struck a more diplomatic tone.

Former Conservative minister Gavin Barwell also questioned Ms Truss’s comment saying: “You would have thought the foreign secretary was aware we are in a military alliance with France.”

Guido reported Macron’s reaction:

Macron replies to Liz’s comments on the French President at last night’s husting:

“The United Kingdom is a friendly nation, regardless of its leaders, sometimes in spite of its leaders”

As for the ‘better Prime Minister’ question, Guido says:

When asked whether Rishi or Boris would be a better PM, Liz emphatically shot back “Boris”. Not unsurprising, though rather awkward given Rishi was asked the same question of Liz and graciously chose his opponent…

Conclusion

So, here we are, at long last.

At 12:30 p.m, on Monday, September 5, Sir Graham Brady of the 1922 Committee announced that Liz Truss will be our new Prime Minister. She will meet the Queen at Balmoral on Tuesday, at which point she will form a new Government. More on that later this week.

Liz Truss is our third Party leader in six years.

Conservative MPs must stop the regicide and support her premiership.

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