Liz Truss struggles to survive in the face of calls to quit business and legislators

Liz Truss fights for her political survival as business leaders and Conservative MPs pressure the UK Prime Minister to step down after a series of damaging U-turns that have destroyed her credibility.

Truss’ decision to nominate Jeremy Hunt as chancellor and scrap key parts of its economic platform hasn’t reassured markets and the city, critics said. But her allies lashed out at those trying to remove her, warning that “conspirators” would force the Tories to hold a general election.

Downing Street was braced for more market turmoil on Monday after investors warned on Friday that Truss’ attempt to reassure investors by scrapping an £18 billion corporate tax cut was not enough.

City leaders and three Tory MPs have openly called for Truss to resign.

Stuart Rose, a Tory peer, former M&S chief and chairman of Asda, said the Prime Minister had lost the confidence of businesses and investors. “She’s a broken flush,” he told the Financial Times. “As prime minister, you have to have the trust of business, investors, voters and party colleagues. She has none of it.”

Dame Alison Carnwath, former chair of Land Securities and senior adviser at investment bank Evercore, said Truss had “no mandate, insufficient support in Parliament, incomprehensible economic policies and a lack of style, charisma and authority”. She added that Truss “should go down in the record books as the shortest-serving Prime Minister ever.”

Guy Hands, founder of private equity firm Terra Firma, said Truss “should go as soon as possible”.

He said: “An adult needs to take the lead of the Conservatives and be a Prime Minister representing everyone in Britain. . . that person must do so soon, before the lights of this once great nation are irretrievably extinguished.”

Hands added that the “sacking of Kwasi Kwarteng is regarded as one of the most cowardly political acts by a prime minister since Britain has had some form of democracy”.

Crispin Blunt, a former Prisons Secretary, said “the game is up” and Tory MPs must decide “how to arrange the succession”. Andrew Bridgen and Jamie Wallis, both Conservative backbenchers, also called on Truss to resign.

Investors warned that the UK would need some time to rebuild market confidence following the unprecedented burst of volatility sparked by Truss’ fiscal plans.

“It will take many investors some time, as well as good fiscal news, to determine whether gilt prices have already found a base and therefore [if they] really want to get back in,” said James Athey, a pension fund manager at Abrdn.

Several Cabinet ministers have begun calling MPs to rally support for potential contenders for the leadership, including supporters of Defense Secretary Ben Wallace, Speaker of the House of Commons Penny Mordaunt and former Chancellor Rishi Sunak.

But allies of the Prime Minister have compared the “conspirators” to campaigners for a second Brexit referendum, whom right-wing news outlets have labeled “enemies of the people”.

Jeremy Hunt leaves Downing Street on Friday after being appointed Chancellor

Jeremy Hunt leaves Downing Street on Friday after being appointed Chancellor © Stefan Rousseau/PA

A pro-Truss Conservative Party supporter said: “Those conspiring against the government clearly have no regard for our economic prosperity or the fate of the markets. Markets react to political instability.”

The official added there will be no “coronation” of a new leader. “Who wants. . . [a] repetition of summer [leadership] Competition will simply bring about a snap general election. The entire Conservative Party owes it to the British people to focus on them. It is time for the conspirators to think who they are working for: it is the British people.”

On Sunday, Hunt was locked in talks with Truss over a new economic plan, due to be unveiled on October 31, which is likely to include further U-turns on tax cuts as well as spending cuts, leading some MPs to believe the chancellor has become the effective prime minister.

Hunt warned on Sunday that he was “taking nothing off the table”.

Charlie Mullins, the founder of Pimlico Plumbers, said the party “can’t get rid of her” now for fear of further losing credibility. But he said that while he had considered donating again to the Conservative Party, he will now “wait for the next leader”. He said Hunt should “steady the ship” but was “disappointed” by the corporate tax turnaround.

Rose said he believes the corporate tax rate is less of an issue than a “general and clear plan” to allow companies to invest. “Every CEO in the country is working on their plans for fiscal 2023. We are all facing tremendous headwinds. Companies just want a clear runway.”

In a rare intervention on Britain’s domestic affairs, US President Joe Biden said Truss made a “mistake” on last month’s mini-budget. “I didn’t agree with the policy, but it’s up to Britain to make that judgement,” he said.

Goldman Sachs lowered its forecast for UK economic growth and warned that a deeper recession was now expected following the reversal in corporate tax.

Additional reporting by Katie Martin Liz Truss struggles to survive in the face of calls to quit business and legislators

Adam Bradshaw

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