British Prime Minister Liz Truss has admitted she should have done more to “lay the ground” for an economic plan that saw the pound fall to record lows, government borrowing costs soar, and a collapse in support for her ruling party in opinion polls.
As the Conservatives’ annual conference begins in Birmingham, surveys of the public mood put the opposition Labour Party in a commanding lead, less than a month after Truss took office.
Several leading figures in the party have spoken out against the tax-cutting plan in the government’s recent mini-budget. The announcement sent markets into a tailspin, forced an emergency intervention from the Bank of England, and brought an admonishment from the International Monetary Fund (IMF) amid fears of wider international contagion.
The political turmoil comes against the backdrop of a cost-of-living crisis, on a weekend when energy prices have risen for millions of households to levels twice as high as they were last winter.
“I understand their (the critics’) worries about what has happened this week,” the prime minister told the BBC on Sunday.
“I do stand by the package we announced, and I stand by the fact that we announced it quickly because we had to act, but I do accept that we should have laid the ground better,” she said, adding that she had “learned from” the subsequent events.
But she insisted the mini-budget was the right plan, suggesting critics did not realise the depth of Britain’s problems and that she was focused on driving growth.
The string of lower taxes announced by Chancellor (finance minister) Kwasi Kwarteng were not accompanied by official forecasts, an unusual move that is thought to have compounded the havoc in the markets.
Beyond the market reaction, Truss’s economic plan also raised alarm in the Conservative Party, particularly as it cut taxes for the wealthiest, while doing little to improve the lives of the most vulnerable.
The prime minister did not deny that the plan would require spending cuts for public services, which some in the party fear could compromise its “levelling up” commitment to reduce inequality.
One former minister, Michael Gove, who was long at the heart of government, hinted he would not vote for the abolition of the top tax when the economic plan comes before parliament and Andy Street, the Conservative mayor of Birmingham, said he would not have made that policy.
Truss added that the decision on the top tax rate was taken by her finance minister and admitted that the move had not been discussed by her cabinet. “No, we didn’t, this was a decision that the Chancellor made,” she said.
Nadine Dorries, a minister under Boris Johnson and now a Tory backbencher, told Truss on Twitter that she was “throwing your Chancellor under a bus”.
Amid concerns among the Conservative hierarchy that the government’s economic plan may be rejected by parliament, the party chairman Jake Berry warned that any Tory rebels who voted against it would be expelled from the party.
The latest opinion poll suggests that Labour has a 19-point lead over the Conservatives. “Liz Truss’s ratings have gone from mediocre (net -9 approval ratings) to very bad (net -37),” says Opinium, which carried out the survey published on Saturday.
Another poll last week by YouGov put Labour’s lead over the Tories at 33 percent, a record high share and the party’s highest figure for over two decades.