British PM Truss Warns of Tough Times Ahead, Vows to Carry on Amidst Calls for Resignation

A new YouGov opinion poll showed that even among Conservative Party members who backed her for prime minister, more than half of those polled said she should resign. A third wanted her predecessor, Boris Johnson, to return.

London: British Prime Minister Liz Truss warned of tough times ahead after she scrapped her vast tax-cutting plan and said she would carry on to try to put the economy on a stronger footing, defying calls for her resignation.

After weeks of blaming “global headwinds” for investors dumping the pound and government bonds, Truss on Monday said she was sorry for going “too far and too fast” with her radical economic plan to snap Britain out of years of tepid growth.

It was not clear whether the apology would quell a growing rebellion in her Conservative Party, with a handful of lawmakers urging Truss to quit just six weeks after she became prime minister.

Truss has said she will fight on and told her top ministers she wanted to level with the public that there were tough times ahead.

A new YouGov opinion poll showed that even among Conservative Party members who backed her for prime minister, more than half of those polled said she should resign. A third wanted her predecessor, Boris Johnson, to return.

Markets, which plunged after Truss’s Sept. 23 “mini-budget”, are still under strain even after her finance minister Jeremy Hunt tore up her plans on Monday.

“I do want to accept responsibility and say sorry for the mistakes that have been made,” Truss told the BBC late on Monday.

“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.” Truss said she was “sticking around” and that she would lead the Conservatives into the next election due in about two years time, although the statement was accompanied by a laugh.

Earlier on Monday, Truss watched silently in parliament as Hunt ripped up the plan she proposed less than a month ago, and which triggered a bond market rout so deep that the Bank of England had to act to prevent pension funds from collapsing.

‘Honest’

For some in the party, the sight of a prime minister humbled in parliament provided little confidence she could fight on.

James Heappey, a minister for the armed forces, said Truss, his boss, could not afford to make any more mistakes.

Truss spoke to her Brexit-supporting lawmakers on Tuesday, promising to resolve the contentious rules that govern trade with Northern Ireland and said she was still a low-tax conservative who would pursue such goals more slowly. One of those present said she was received warmly in contrast to more hostile receptions from other wings of the party.

Members of parliament have been urged by government to hold off from any move to oust her before it presents its medium-term fiscal plan on October 31.

Truss was elected by Conservative party members, not the broader electorate, on a promise to slash taxes and regulation to fire up the economy in a policy dubbed by critics as a return to 1980s Thatcherite-style “trickle-down” economics.

But markets reacted so dramatically that borrowing costs surged, lenders pulled mortgage offers and pension funds fell into a tailspin.

Ryanair (RYA.I) boss Michael O’Leary described Britain’s economic situation as a “car crash” which he blamed on the country’s decision to vote to leave the European Union in 2016.

Spending squeeze

With Britain’s economic reputation shattered, Hunt may now have to go further in finding public spending cuts than the government would have done had Truss not unleashed her economic plan at a time of surging inflation.

Truss’s spokesperson said the government could not yet make commitments in individual policy areas, despite previous pledges, but it was focused on protecting the most vulnerable. He said Truss stood by her pledge to increase defence spending by 2030.

Torsten Bell, the head of the Resolution Foundation, a think tank, said the government may need to cut public spending by around 30 billion pounds ($34 billion) – a politically very difficult task after successive Conservative governments cut departmental budgets over the last 10 years.

One area of spending already to go is Truss’s vast two-year energy support package that was expected to cost well over 100 billion pounds, which Hunt said would now last until April before it is reviewed.

(Reuters)

Rishi Sunak Now a Distant Second to Liz Truss in Opinion Polls to be Next British PM

Truss is brash while Sunak is smart, but has poor political instincts and his posh background too may go against him.

London: On current trends, it looks as if Britain might get its next prime minister without even having a public debate about whether it wants someone of Asian origin in the post. Rishi Sunak, whose Indian parents moved to the UK via East Africa, was the front runner favoured by a majority of Conservative MPs when the contest for party leadership began. But that has changed.

All the opinion polls are now indicating that Sunak, till recently chancellor of the exchequer (finance minister), will be beaten by Liz Truss, the foreign secretary, who looked a gauche and unprepared candidate at the start but has now emerged as the favourite, winning growing support from cabinet colleagues who want jobs in her administration.

The Times last night reported a YouGov opinion poll of party members that showed Truss leading with 60% to Sunak’s 26% and 14% undecided or not voting. Nine out of ten of those polled said they had already decided who to vote for.

There might still be time for the figures to change. Voting papers that were being sent out this week to some 160,000 party members are delayed for several days because of the risk of cyber attacks, it was announced last night. The deadline for voting is September 2, but many recipients are expected to fill in the forms and return them quickly by post or on-line, so Sunak may not have long to reverse the apparent Truss lead.

Television and other public debates will continue through August, unless one of the candidate withdraws. The result is scheduled to be announced on September 5 and the winner will immediately replace the disgraced but unrepentant Boris Johnson as Prime Minister and move into Downing Street.

Sunak is clearly the more competent of the two candidates. He argues his economic policies lucidly with confidence and a grasp of detail – even surviving with few bruises a half-hour interview with an aggressive television anchor, Andrew Neil, who frequently crushes his guests. Truss has declined an invitation from Neil, presumably fearing she would not do anywhere near so well.

Unlike Truss, Sunak lacks broad government experience, especially on foreign affairs, having only entered politics in 2015. He also lacks political judgement, which he showed when he allowed the tax affairs of his immensely wealthy wife, Akshata Murthy, to become a political issue earlier this year. The daughter of India’s leading IT tycoon, Infosys’s Narayana Murthy, Akshata had retained non-domicile status and used it to escape some £20 million UK tax. 

Also read: Tax Status of Rishi Sunak’s Indian Wife Damages His Chances as Boris Johnson’s Replacement

That became a major media story and was a setback for Sunak. It has now been corrected, but should have been changed in 2015, as should Sunak’s US green card that he kept after working as a Goldman Sachs investment banker in America. He also seemed not to realise that their combined wealth, which the Sunday Times Rich List puts at £730m, would become a political hazard that needed managing, especially for a finance minister and an aspiring Prime Minister.  

But despite those limitations, Sunak is the natural choice for party voters wanting a well-informed leader who would be clearly focussed on devising and executing sound policies – in sharp contrast to Johnson and also in contrast to Truss who has tended in her campaign to devise policy initiatives that grab instant headlines. 

The main policy debate has been on the economy at a time when there is a cost-of-living crisis with inflation is running at over 9%, and there is virtually no economic growth. Truss is promising populist instant tax cuts funded by borrowing, which Sunak rejects because of rising national debt, though he has been forced to promise some tax cuts over seven years.

On Tuesday, Truss had to reverse a policy announced the night before that would have created regional public sector pay boards and caused pay cuts for government and other workers living outside London, including teachers and nurses. This idea had been thought about and abandoned for many years by successive governments, but Truss presumably latched on to it as a headline grabbing initiative that would, she said, ultimately save £9 billion and help fund her tax cuts.

She has also shown herself to be brash on international affairs, making unnecessary threats and demands to Vladimir Putin that prompted him to put Russia’s nuclear weapons on high alert at the end of February, and to Emmanuel Macron over recent travel delays across the English Channel. At home on August 1, she insulted Nicola Sturgeon, Scotland’s independence leader, saying she was an “attention seeker”. The best way to deal with her was “to ignore her”. The Sunak team more sensibly said Sturgeon should be tackled on her policies, not ignored.

Also read: UK Finance Minister Nadhim Zahawi Declares Support for Liz Truss

Truss might of course moderate her style if she is elected, but these recent events could cause some of her potential supporters to have second thoughts while they wait for ballot papers. Her style is in line with her wish to be seen as tough and as effective as former Prime Minister Margaret Thatcher who she emulates – even dressing in Thatcher style clothes on a visit to Russia.

Johnson’s supporters continually accuse Sunak of disloyalty, alleging he intentionally triggered the Prime Minister’s downfall with his resignation as chancellor on July 5. That was quickly followed by some 50 other ministerial resignations. Sajid Javed, the health minister, resigned just before Sunak, but arguably that alone would not have been enough to lead to what Johnson described as the “herd instinct” departures.

A veteran right-wing political commentator, Charles Moore, wrote after an interview with Sunak, “How nice it was to talk to a politician who never bluffs about details, expresses himself so intelligently and genuinely enjoys policy argument” with a “cool, clear mind”. Moore noted Sunak’s “charm, which combines modesty of demeanour with mastery of the subject, as if he were a sympathetic surgeon ready to operate most delicately upon the nation’s troubled brain.”

But Moore, who is close to Johnson, opted for Truss, partly because Sunak’s “subliminal message is: ‘I know better than you’.” That implied criticism stemmed from the way that Sunak repeatedly interrupted and talked over Truss during TV debates, sparking allegations from her supporters and others of “aggressive mansplaining” and “shouty private school behaviour”. (Sunak went to the elite Winchester school in fashionable Hampshire while Truss went to a more politically-acceptable comprehensive school in the north of England). 

Moore also tackled the question of Sunak’s origins. “I must also admit to a racial preference: I would love the Conservative Party, which scooped the first Jew and the first woman, now to be led by its first British Indian. (He was referring to Benjamin Disraeli, the 19th century Prime Minister whose father had Jewish origins but who was brought up a Christian, and to Thatcher). 

Most commentators have steered clear of this, almost as if the subject was off limits because of sensitivities over race, ethnic origin and maybe even religion. Sunak is a practising Hindu and made his oath on the religion’s sacred Bhagavad Gita when he became an MP.  

Also read: A British Lesson in Tolerance for ‘Hindu’ India

One notoriously controversial lawyer tweeted about whether the Conservatives would want a “brown man” as leader. That led to an uproar and the tweet was deleted, but it did lead to the thought that the traditionalist largely middle-class members of the Conservative Party might be less willing than the general electorate to see Sunak in Downing Street.

Meanwhile, Johnson’s supporters are campaigning (fruitlessly) for his name to be on the ballot paper. Whoever wins will have to cope with his continued presence, not only as an MP and as a prominent columnist in the Daily Telegraph, but also because he seems to believe he will be called on to return as Prime Minister – as happened to his idol Winston Churchill. 

That will not help the new Prime Minister deal with a mass of crises including inflation and the escalating the cost of living, serious labour shortages, and a series of public sector and other strikes that have already started on the railways and in telecommunications and also threaten schools and ports. There is even a vague threat of a general strike if Truss goes ahead with ill thought-through plans to stop trade unions causing major disruption. 

The choice the Conservative voters are making is between Sunak, who would surely cope with these issues calmly and effectively, and Truss who wants to be seen as a second Maggie Thatcher, known as the ‘Iron Lady’.

John Elliott is a journalist and author.