The knives are being sharpened for Liz Truss, a prime minister who has been in office for only five weeks, which already seems like a lifetime. It’s hard to believe she and her chancellor will be able to survive another five. Truss is headed for oblivion and we won’t have long to wait, according to accounts coming out of a brutal meeting last night with the backbench 1922 committee of Conservative Party MPs.
Twitter was full of quotes from anonymous Tories given to political correspondents and lobby journalists afterwards.
MP shocked how ‘brutal’ the 1922 meeting was
One told ITV’s Anushka Ashthana: “I genuinely have no idea how [Truss] is going to make the maths add up on 31 October. My worry is that I don’t think she does either.” The source also said that sacking Kwasi Kwarteng “would be like her blowing her own foot off”.
Another told the Daily Mail‘s political editor Jason Groves: “It was like someone trying to light a fire using a magnifying glass. Using damp wood. In the dark.”
Esther Webber, UK correspondent for Politico Europe website, heard from a stony faced MP that the 1922 meeting was the: “Worst since I’ve been to since 2015. Unspeakably bleak.”
Another MP also told Geri Scott who writes for The Times, that it was “worst 1922 I’ve ever been to” and added: “With each tough question she looked like she’s had the wind knocked out of her, 31st Oct could finish her off on the basis of the reception she got in that room.”
“The mood was honestly funereal, horrendous. I was shocked at how brutal it was”, one MP admitted to the FT’s Whitehall editor Sebastian Payne.
It followed a session of prime minister’s questions (PMQs) where Truss was surrounded by a sea of long Tory faces; another day of roiled financial markets, damaging editorials and apocalyptic polling figures. Earlier in Westminster, the chief economist at Deutsche Bank had been painting a desolate picture of the UK economy for MPs on the Treasury Select Committee:
Sanjay Raja(Chief UK Economist, Deutsche Bank) – "The UK is uniquely facing trade shock… the UK's trade balance is at a historic deficit… we haven't seen this since 1955, since national account records began.. " pic.twitter.com/Umq6aIHgjE— Haggis_UK 🇬🇧 🇪🇺 (@Haggis_UK) October 12, 2022
Truss accused of trashing ten years of workers’ conservatism
Robert Halfon, MP for Harlow and a former minister, accused Truss of trashing “the last ten years” of Conservative government. Halfon, chair of the education select committee, launched an attack on the prime minister saying her polices had disproportionately benefited the wealthy and that she had abandoned “workers’ conservatism”.
Kwarteng was absent from PMQs. He was away in Washington with Bank of England governor Andrew Bailey, at the annual meeting of the International Monetary Fund (IMF) where the chancellor met some of his most prominent critics face to face. He might have preferred his humiliation locally rather than on the global stage. His cabinet colleague Jacob Rees-Mogg didn’t help matters by trashing the IMF’s reputation for forecasting on the BBC’s Newsnight programme.
Apparently, Kwarteng had to listen to “backhanded swipes” at his unfunded tax cutting policy from other finance ministers, led by former US Treasury Secretary Janet Yellen.
To add to his woes, the Japanese investment bank Nomura is advising clients that Sterling will reach parity with the US dollar by the end of November, $0.9750 by end of 2022, and $0.9500 in the first quarter of 2023. This is even if Truss reverses tax cuts or the Bank of England raises interest rates, which they say will provide only a “temporary” boost to sterling. Nomura claimed:
“With the global recession risk rising in probability it’s difficult to gauge whether GBP could materially find a way to climb back.”
Telegraph blames ‘everybody’ except Truss and Kwarteng
Allister Heath, editor of The Sunday Telegraph, literally blamed “everybody” for the near-insolvency narrowly avoided by pension funds last week; everybody that is except Truss and Kwarteng. Heath blamed the financial institutions that created and sold the so-called ‘liability-driven investments’, the pension funds themselves, the Treasury and its “staggeringly overrated mandarins”, the regulators, the Bank of England, and even Kwarteng’s predecessors as chancellor.
All except the two people at the centre of the storm were at fault, according to Heath, who was also perhaps defending himself. On 23 September, hours after the mini-budget he claimed: Kwarteng’s Budget is a moment in history that will radically transform Britain. With one move, he said, “Britain’s competitiveness, its investor friendliness, and its attractiveness to top talent has been hugely amplified”.
The financial markets didn’t agree and now the prime minister may not even see Christmas in Downing Street.
One senior Tory told the New Statesman‘s political reporter Freddie Hayward that any Tory MP “with a majority less than 10k is toast” after the opposition parties laughed at her during PMQs.
Some pollsters suggest the Conservatives may not even be able to form HM loyal opposition after the next election, as they may be displaced by the SNP and banished to the House’s nether regions. That would certainly spell the end of the party which will struggle to survive in one piece the recriminations that are inevitably going to follow defeat at the ballot box.