Trust me, UK’s Truss pursues charm offensive at her party conference

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LONDON – British Prime Minister Liz Truss heads to her Conservative Party conference next week with a schedule full of “meet and greets” to try to win over lawmakers angry over an economic plan that sparked market chaos and badly eroded support.

Less than a month into her tenure as prime minister, Truss is struggling to win support for a sweeping economic plan meant to spur growth but instead sent the pound to record lows and the cost of borrowing government increased spirally.

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For some voters, the market chaos initially felt removed from everyday life, but as soon as mortgage lenders began to withdraw their products and signs emerged that the nation’s pensions could be at risk, attitudes start to change

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Support for the ruling party has plummeted. Polls show opposition Labor taking the lead, with one saying the party was a record 33 points ahead, which, if replicated in an election, would see dozens of Conservatives vote.

Truss has shown no sign of changing course even in the face of criticism from the International Monetary Fund and governments who fear the impact of his plan on a debt-burdened global financial system.

Instead, at the conference starting Sunday, he plans to woo his lawmakers, especially those who backed his leadership rival, former finance minister Rishi Sunak. He must convince them to give him time to secure the kind of economic growth that has eluded Britain for at least a decade.

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If he fails to win the party, his term before elections due in 2024 could be cut short.

Some of Sunak’s supporters said they were willing to give him the benefit of the doubt.

“My lost side, Liz deserves our support to give her exciting new agenda the best possible shot,” one conservative lawmaker said on condition of anonymity.

Another, who also supported Sunak, said the strategy was “ill-judged” but it would be “ridiculous” for the party to try to pull it off. “We don’t have to panic yet. … We have to give them time to turn it around.”

Some Tory lawmakers want Truss to immediately reverse the scrapping of the top rate of income tax or change a message they say suggests the government doesn’t care about markets or voters struggling to make ends meet. month.

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Truss, however, has said he will not U-turn and is looking at the next steps in his plan.

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As markets fell on Monday, Truss was in her Downing Street office working on those steps, a source close to her said, referring to other expected measures that some described as a reminder of the search for the ‘former British Prime Minister Margaret Thatcher and deregulation. small state

His supporters say they knew his tax cut package would be met with “establishment” opposition, but the market reaction was overblown, partly as a result of a jump in rates of US interest and what they call “global headwinds”.

But even some of them suggest that Truss and his team should have spent more time preparing investors for a plan that ignored the convention that governments explain how they will fund their pledges.

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Truss’ team says that will come later: planning spending costs when it’s clear how much revenue they’re making.

A Tory party insider said the team failed to explain the depth of Britain’s problems and then “sounded ideological in a vacuum”.

It’s a criticism Truss’ team understands but, with an election due in 2024, she had to act quickly, sources close to her said. Finance and Truss Minister Kwasi Kwarteng has now moved to try and ease concerns at financial institutions, but they are sticking to the plan.

Patrick Minford, an economist who championed Thatcher’s policies and was cited by Truss as the expert who backed her tax cut plans, told reporters on Thursday that she should continue. “Truss needs to keep giving the medicine.”

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Minford said he expected growth of more than 2% next year and inflation to fall to 5% if Truss follows through on his policies. The Bank of England said in August it expected Britain’s economy to contract by 1.5% in 2023 and inflation to hit 5.5%.

Some economists think his policies are unlikely to achieve even this modest measure of success, but if they do, it could still spell short-term hardship for voters. Some, already struggling with inflation and rising energy costs, now face the prospect of higher mortgage payments and possible cuts in benefits.

“It will be if/when interest rates go up and mortgages go up that people will become more vocal,” said Antony Mullen, a local Tory councilor in the northeastern English city of Sunderland.

Speaking to regional radio stations and asked about struggling people and markets in chaos on Thursday, Truss struggled to offer reassurance.

Jane Foley, head of foreign exchange strategy at Rabobank, said the Prime Minister could struggle to regain the confidence she had already lost.

“Any politician who thinks the markets are wrong learns very quickly that’s not the case,” Foley said. (Reporting by Elizabeth Piper and Andrew MacAskill, additional reporting by Kylie MacLellan)