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Good morning from Birmingham! Another day, another turnaround. Some thoughts on Liz Truss and Kwasi Kwarteng’s recent position change and the larger issue facing the Conservative Party below.
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Waiting a long time for an about-face and two are appearing: Kwasi Kwarteng has not only given up on eliminating the additional tax rate, but also announced that he will present his five-year plan for reducing Britain’s debt later this month — not on November 23 as originally planned.
Seb Payne, George Parker and Jim Pickard have written a lengthy article on when and how Truss and Kwarteng came to the realization that their proposed tax cut for Britain’s richest earners had no hope or prospect of getting past Conservative MPs.
One of the reasons Truss was weakened by the about-face was that she fought for the tax cut up to the eleventh hour: in the truest sense of the word! As revealed by Seb, George and Jim, she finally broke up in her hotel suite at 11pm, just over an hour after speaking and receiving applause for her growth plan at ConservativeHome’s glittering reception. She told attendees that getting the UK back on track is not only crucial to ensure the Tories win the next election, but also to demonstrate that the democratic West is still capable of economic growth and to deliver momentum as he faces the threat of both Russia’s invasion of Ukraine and a newly assertive China.
One problem Truss now has is that after being forced to back down from a measure they defended in plain existential terms, Conservative MPs believe they can force about-faces on just about anything. Given how politically painful some of the spending cuts in Kwarteng’s debt-reduction plan will be, more U-turns and setbacks lie in the future for this administration.
Someone who sees opportunity in all of this is Priti Patel, who the Times revealedShe will use her first significant public statement since returning to the backbenches to urge Truss and Kwarteng to “put a cap” on public spending.
But the tough question facing the Conservative party as a whole is: is there any fiscal policy they could possibly support? The next looming row centers on Truss’s plan to walk away from the government’s promise earlier this year to increase benefits in line with inflation.
Wet and increasingly flaccid centrist as I am, I hate this plan and sincerely hope that it will be discarded. But, you know, I also supported Rishi Sunak’s plans to raise taxes to pay for higher expenses (although I figured raising income taxes would be better than messing with Social Security).
Penny Mordaunt this morning became the first Cabinet Secretary to publicly urge the government to increase benefits in line with inflation. “It makes sense to do this,” she told Times Radio. Former Housing Secretary Esther McVey is the oldest backbencher to oppose both of Sunak’s tax increases (she voted against the health and welfare tax). and announce their opposition to Truss’ plans to cut social spending in real terms, but she is by no means alone.
During this conference, Paul Scully, Kemi Badenoch and Simon Clarke have all argued that there is plenty of excess activity that can be slashed from UK government budgets. Clarke said Whitehall departments needed to “cut the fat”. an interview with the Times. However, none of them were actually able to identify a specific item or policy that they would scrap.
I’m not saying that Truss and Kwarteng are not to blame for the events of the past two weeks. But the Conservatives’ recent troubles begin and end neither with the Prime Minister nor with her Chancellor.
Being a) an only child and b) extremely grumpy, there comes a time during convention season when I suddenly long for a company of my own. So after dinner last night I went back to my hotel and watched gagarine. It tells the story of Yuri, a 16-year-old boy whose housing estate is threatened with demolition. What unfolds is a beautifully told and shot piece of magical realism.
Danny Leigh’s review is here and UK readers can check it out as I did, on Curzon Home Theater.
Top stories today
“Half-baked Ideas” | Liz Truss has scrapped a number of “half-baked” ideas put forward by Business Secretary Jacob Rees-Mogg to cut back rights in the workplace, including introducing some form of innocent redundancy for higher earners and ending the 48-hour work week.
Get back on the rails | Truss has pledged to reverse the decision to scale back the government’s railway program in the north of England. Yesterday she committed to a new high-speed line spanning the full width of northern England between Liverpool and Hull.
Climate brakes | Tough new limits on nitrogen use around the Port of Poole in Dorset are expected to reduce river pollution. But farmers in the area warn that the cleanup plan is putting their businesses at risk while failing to pressure water companies to clean up their actions.
solid pound | Sterling and UK government bonds gained yesterday as investors cautiously welcomed the reversal of plans to abolish the top income tax rate. Sterling rose 1.1 percent against the dollar to $1.128, recovering to pre-‘mini’ budget levels.
Putin’s nuclear threat | Western officials and military experts say the risk that Vladimir Putin will use nuclear weapons is low, but cannot be downplayed as Russian forces in south-east Ukraine suffer military setbacks. Here’s what we know about the nuclear weapons that Putin may be tempted to use.
https://www.ft.com/content/84015efc-4d01-41a6-abd2-2cd183061a0e Tory discord over government spending bigger than Truss