Politics

Truss’s enemies slammed over plans that will see ‘return to austerity’

John Redwood says cutting taxes will 'stave off' a recession

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As numerous reports emerge of plotting within the Conservative Party to replace Liz Truss or force her into further U-turns over her disastrously-received fiscal plan, one of the Prime Minister’s key backers said the dissenters want to “stop all tax cuts”. Sir John Redwood, a long-time Eurosceptic and ally of the PM, described the internal rancour as “political games at the expense of people’s lives”.

In a matter of weeks, Ms Truss’s premiership is already said to be up for discussion among Tory circles, with various factions believed to be plotting to oust her.

Reports this week have suggested proposals to create the conditions of an effective “coronation” of a so-called unifying leader.

Penny Mordaunt, the Leader of the House of Commons, who came third in this summer’s leadership election, and Ben Wallace, the Defence Secretary who has overseen the UK’s continued support of Ukraine, are two names that have been mentioned.

Similarly, allies of Rishi Sunak – the former Chancellor who lost out to Ms Truss – are said to be touting a potential return. However, he is still seen as tarnished by his resignation that eventually led to Boris Johnson’s.

After now-former Chancellor Kwasi Kwarteng announced a flotilla of new measures including a 1p income tax cut and the abolition of the 45 percent tax bracket, the new Government was forced to defend itself as both the pound-dollar exchange rate fell and the gilt markets ran into turmoil.

This was seen largely in response to the fact that the Government had not had their homework marked by the Office for Budget Responsibility before announcing the plans.

Last Thursday, Mr Kwarteng – who has been a long-term political ally of Ms Truss – cut short a trip to New York to be sacked 38 days into the job.

He was then replaced by Jeremy Hunt, a former Foreign and Health Secretary, but also a supporter of Mr Sunak during the leadership contest.

Since taking over, the new Chancellor has made a fresh string of U-turns and revisions, after the PM had already dropped the commitment to scrapping the top tax bracket and a rise in corporation tax, including delaying the introduction of the 1p income tax cut by a year.

This led to speculation that Ms Truss was no longer in control of the Government’s economic policy – something which Mr Hunt denied this morning, telling Laura Kuenssberg: “The prime minister is in charge.

“She has changed the way we’re going to get there. She hasn’t changed the destination, which is to get the country growing.”

Sir John criticised the new Chancellor’s position, saying that “you cannot tax your way to higher growth”.

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Today, he said that “those who want the PM out” – perhaps a veiled reference to the One Nation Tories who favour Mr Hunt and Mr Sunak – “want to stop all tax cuts, plunge us into recession and claim they warned us.

“Their economic remedies would be a return to austerity. They are playing political games at the expense of people’s lives and hopes.”

The UK is already predicted to be heading into a recession by the Bank of England, but in a boon to Sir John’s remarks, Goldman Sachs analysts now believe the nation faces a “more significant” recession due to the changes made following Mr Kwarteng’s departure.

The Government is now expecting departments to make cost savings, but has denied a return to austerity instituted under David Cameron in the wake of the financial crash.

According to the Sunday Times, Ms Truss considered parachuting George Osbourne – the godfather of austerity – back into the Chancellorship, though it was reported this was something she considered “for about a second”.

Writing in the Express yesterday, Sir John said that Tory MPs “who had been strongly supporting Liz Truss’s tax cuts for growth are now concerned about what happens next from the new team.

“Many of them are no longer giving unconditional support.”

He added: “The decision [by Mr Hunt] to hike the corporation tax rate is most unhelpful, sending a signal to worldwide business that we are not trying to be the best location on tax for their investment.”

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