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Michael Settle: Nerves jangling among some Tories over reaction to mini-budget

POLITICALLY, the turmoil on the finance markets couldn’t have come at a better moment for Labour, arriving just in time for the comrades’ annual showcase by the Mersey.

The sight yesterday of Kwasi Kwarteng striding outside the Treasury refusing to comment on the plunging pound and all that would mean for households in terms of rising inflation, energy prices and mortgage costs was not a good look for the new Chancellor.

In Liverpool, his Labour shadow, Rachel Reeves, was passionately invoking the old New Labour mantra about fusing economic competence with social justice.

The Sultan of Spin himself, Peter Mandelson, beamed internally with pride as a mood swept around the conference hall that Labour, after 12 years in the political wilderness had, at long last, a momentum towards power.

Rishi Sunak, pottering around at home in his cardigan and slippers, who had warned about Liz Truss’s “fairytale” policies fuelling inflation, could have been forgiven for shaking his head as the pound plunged against the dollar, muttering: “I warned ’em.”

To underscore the “new era” Conservatives’ woes, an opinion poll today gave Labour a 17-point lead, its biggest since Tony Blair’s landslide win in 2001. In the wake of Kwarteng’s Budget, the Tories dropped four points to 28%; Labour gained five to 45%.

Keir Starmer is trying to instil a steely discipline within Labour ranks, believing more than ever that Downing Street is within his reach.

In his keynote speech, he told delegates his party was now the champion of “sound money” whose ambition was to “turn the UK into a growth superpower”.

Starmer was not lacking in ambition, saying a future Labour administration would give Britain a “fresh start,” defeat the cost-of-living crisis, “spread opportunity for all,” lift the country’s “clouds of anxiety,” restore public service levels, including in the NHS, and build more affordable housing.

Arguably the biggest ovation came when the party leader said his Government would set up a publicly-owned green energy company within a year and with 100% clean power by 2030.

Great British Energy, he insisted, would provide “British power to the British people”. I suspect there will be pictures tomorrow portraying Starmer as a 21st century Wolfie Smith.

There was also a determination to bury the Conservatives’ favourite bogeyman: a coalition, pact or deal with the SNP.

One of the biggest cheers came when the Labour leader said of Nicola Sturgeon’s nationalists: “We can’t work with them, we won’t work with them. No deal under any circumstances.”

Despite the Labour leadership’s repeated assurances, however, the Tories will continue to peddle the zombie notion of a Lab-SNP deal regardless, because they know it works among some voters in England.

While there is a long way to go before the next General Election, Labour tails are up just as the Tories prepare for their own showcase event in Birmingham with eyes nervously scanning the market prices and sterling’s precarious journey.

The unconvinced response from investors to the Treasury’s promise of a medium-term fiscal plan in November and the Bank of England’s assurance it would “not hesitate” to raise interest rates by “as much as is needed,” sent a chill down Conservative spines.

Nerves are jangling among some Tories as they hesitatingly head this weekend to Birmingham for their ritual get-together.

Back to Lord Mandelson, who suggested the next election could be comparable to Labour’s 1997 historic victory, claiming the Chancellor’s Budget saw the Tories forfeit their reputation for economic competence. The peer described the Tory Government as “exhausted” and having “run out of steam”.

Whisper it, even some Tories, aghast at the markets’ lack of confidence in the Truss plan, privately agree.

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