Liz Truss faces battle to maintain Cabinet discipline amid new U-turns

Liz Truss was struggling to maintain Cabinet discipline as Conservative critics who forced her U-turn on slashing income tax for the highest earners were accused of a “coup”.

Amid bitter infighting at the Conservative Party conference, Chancellor Kwasi Kwarteng appeared to back down from considering another U-turn by now ruling out bringing forward his medium-term fiscal plan.

Members of the Cabinet were publicly urging the Prime Minister to raise benefits in line with inflation and questioning her climbdown on the 45% rate for earnings over £150,000.

Home Secretary Suella Braverman said she was “disappointed” by Mr Kwarteng and Ms Truss’s mid-conference tax U-turn, and accused Tory rebels like Michael Gove of staging a “coup”.

Commons Leader Penny Mordaunt, another former leadership contender, said it “makes sense” to increase benefits in line with soaring inflation rather than deliver a real-terms cut.

Ms Truss is instead considering a raise in line with the far lower figure of earnings, but said she would not be sacking Ms Mordaunt for publicly stating her firm stance.

Distraction

The Prime Minister scrapped her plans for a tax cut for the wealthiest on Monday, saying it had become a “distraction” as senior Tories threatened to vote against it in the Commons.

However, on Tuesday she revealed in an interview at the Birmingham conference that she harbours a possible ambition to bring back the controversial tax cut in the future.

“I would like to see the higher rate lower. I want us to be a competitive country but I have listened to feedback, I want to take people with me,” she told the BBC.

“I’m not contemplating that now, I’m very, very clear that we’ve listened to people about what their priorities are.”

At the same time, her Home Secretary vented her frustration at the U-turn, hitting out at former Cabinet ministers Mr Gove, Grant Shapps and Damian Green for having “staged a coup, effectively, against the Prime Minister”.

“I’m disappointed about the subsequent reversal but I accept their reasons,” Ms Braverman added, during the recording of a Telegraph podcast.

‘Good sense’

Levelling-Up Secretary Simon Clarke, one of Ms Truss’s closest allies, said she “speaks a lot of good sense, as usual”.

Meanwhile, there was confusion over another apparent reversal from Mr Kwarteng after he told the conference he would publish his fiscal plan and Office for Budget Responsibility forecasts “shortly”.

His allies had been hinting this meant bringing the publications forward from November 23 to this month.

But Ms Truss told GB News that the originally planned date is “when we’re going to set out the OBR forecasts but also our medium-term fiscal plan”.

Downing Street aides said only that the PM may consider bringing the date forward, downgrading the likelihood of the move.

Then, in a separate GB News interview, Mr Kwarteng denied he was changing his plan, saying “shortly is the 23rd” and suggesting people had been “reading the runes” incorrectly.

The scale of the problems facing Ms Truss led Mr Shapps to effectively declare she had 10 days to save her premiership, starting with a crunch conference speech on Wednesday.

Critical period

He told The News Agents podcast: “The next 10 days is a critical period of time, she’s got a conference speech to make after a very difficult few days, she’s got the MPs coming back together again for the first time since things became choppy – of course, I mean, it’d be ludicrous to say anything else.

“But is it possible? Yes, it is possible, and I’m cheering her on to do it.”

He suggested some Tory MPs at risk of losing their seats in a general election might consider replacing her with a new leader.

“The question is for Conservative MPs, if they are in any case thinking: ‘Well, I’m going to be out at the next election’, then they might as well roll the dice, as it were, and elect a new leader.”

Earlier, Ms Mordaunt joined backbench rebels in calling for welfare payments to be raised in line with inflation, which has been at around 10%, rather than earnings at 5%.

“I’ve always supported, whether it’s pensions, whether it’s our welfare system, keeping pace with inflation. It makes sense to do so. That’s what I voted for before and so have a lot of my colleagues,” she told Times Radio.

Ms Truss faced questions over whether her Commons Leader had to go in order to enforce discipline in her ranks, but she told ITV News: “No, she doesn’t.

“This is about a decision that we are taking later on this year.”

The Prime Minister has instead been stressing she must take a “responsible” approach to the public finances, refusing to rule out benefits cuts or a return to austerity.

Inflation

Benefits are usually uprated in line with the consumer price index (CPI) rate of inflation from September, with the rise coming into effect the following April.

The Institute for Fiscal Studies estimates that each percentage point rise in CPI adds £1.6 billion to welfare spending.

Welsh Secretary Robert Buckland backed Universal Credit as a “pretty useful delivery mechanism” for helping the poorest.

“I know that our opponents like to cast us as some sort of, you know, morally dubious party that only cares about the wealthy. That’s not true,” he told Times Radio.

“My experience of Conservatism is that we’re at our best when we encourage people to succeed but also help those genuinely in need. The safety net is an important part of what a one nation Conservative is all about.”

Mel Stride, Tory chairman of the Treasury Select Committee, said he would have to “think long and hard” if asked to vote to increase benefits in line with earnings rather than inflation.