Liz Truss sought to reassure financial markets on Wednesday by stating her commitment to fiscal discipline while claiming there was an “anti-growth coalition” opposed to her economic agenda.
The UK prime minister, who has been in power for just a month, rallied Conservative MPs and members behind her faltering leadership by blaming the market turbulence that followed her “mini” budget last week on global factors, including the “tempest” caused by Russia’s invasion of Ukraine.
In her keynote speech on the final day of a conference that descended into cabinet infighting and confusion, Ms Truss said she had three priorities for Britain: “Growth, growth and growth”.
But she admitted her agenda would not be universally welcomed. “Whenever there is change, there is disruption and not everyone will be in favour of change. But everyone will benefit from the result — a growing economy and a better future.”
Ms Truss argued that the Conservatives faced an “anti-growth coalition” of the opposition Labour and Liberal Democrats, trade unions, anti-Brexit and environmental campaigners as well as “vested interests dressed up as think-tanks” that did not understand “aspiration”.
By contrast, the prime minister painted herself on the side of “normal working people” such as train commuters into cities, white van drivers, hairdressers, plumbers, accountants, IT workers and “people who make things in factories”.
After opinion polls showed slumping public support for her government, Ms Truss told delegates that she had fought to get where she was, reflecting on her upbringing in northern England. “I know how it feels to have your potential dismissed by those who think they know better.”
Ms Truss’s initially uncertain delivery was bolstered when her speech was disrupted by two protesters with a Greenpeace flag saying “who voted for this?” They were dragged out of the hall to cheers and a standing ovation from Tory members.
Ms Truss vowed to “get Britain moving”, adding to applause from fellow Tories that she refused “to consign our great country to decline”. She reminded delegates about the government’s intervention to help households and businesses from rising energy bills, claiming it was bigger than any similar scheme in other European countries. But Germany announced an €200bn energy support plan to rival the UK’s earlier this week.
The prime minister insisted that she was sticking to plans to “level up” the regions of the UK, a policy forged by her predecessor Boris Johnson. “I know what it’s like to live somewhere which is not feeling the benefits of economic growth,” Ms Truss said.
“I’ve seen the boarded-up shops and people with no hope turning to drugs,” she said, reflecting her upbringing in Leeds and Paisley, Scotland. “We need to fund the furthest-behind first.”
She argued that the answer to Britain’s economic problems was “growing the economic pie so that everyone gets a slice” by continuing to cut taxes.
The announcement of Ms Truss’s fiscal plans last month, which featured £45bn of unfunded tax cuts, prompted wild gyrations in sterling and gilt markets. But she remained unapologetic about the fallout from the tax policies. “The Conservative party will always be the party of low taxes.”
The prime minister was forced on Monday to reverse a plan to scrap the 45p top rate of tax by rebel Tory MPs, prompting home secretary Suella Braverman to accuse her colleagues of staging “a coup”. Kemi Badenoch, trade secretary, in turn accused Braverman of using “inflammatory language”.
Ms Truss sought to quash rumours that she could sack chancellor Kwasi Kwarteng in the wake of the U-turn on the 45p tax rate. “The chancellor and I are in complete lockstep,” she said.
On Wednesday, the pound reversed earlier gains to shed nearly 1 per cent against the dollar, trading at $1.1375. The currency had earlier risen to as high as $1.1495, recovering to levels reached before the chancellor unveiled the tax cutting plan on September 23. Sterling has fallen 16 per cent this year.
- Copyright The Financial Times Limited 2022