James Forsyth

Liz Truss and Kwasi Kwarteng wanted to shake things up. They were radicals in a hurry, keen to show that Britain was under new economic management. Theirs would be an unapologetic pro-growth agenda: no more genuflection in front of failed orthodoxies, no more being paralysed by fear or criticism. As a sign of this, they abolished the 45p tax rate for the highest earners: a move that many Tories longed to make, but did not dare. It seemed Truss and Kwarteng would leap in where other Conservatives feared to tread. This lasted just ten days. As the tax plan was reversed and No.

In a tetchy performance on The Andrew Neil Show, Tory party chair Jake Berry repeatedly insisted that everyone would have to wait until the Chancellor’s unveiling of his fiscal plan on 23 November to find out whether or not there would be spending cuts and when the government believes it will hit its 2.5 per cent growth target. Berry’s performance, which involved repeatedly trying to answer a different question to the one he was asked, made it even harder to believe that this line can hold. If every minister interviewed for the next six weeks sounded like Berry did just now, then it would be a disaster for the government. https://twitter.com/Channel4/status/1576607943277019137?

Is there a way for the government to get out of the mess that it is in? This is the question obsessing ministers and Tory MPs. If the government doesn’t set out how it intends to square the circle, it’ll be risking more market mayhem. But as I say in the Times today, it is very hard to see a way out of this that is both politically palatable and economically possible. Nervous Tory MPs are being told by one of Truss’s cabinet allies ‘the solution is to be very tough on public spending’ A rapidly growing number of Tory MPs think the government should abandon or delay the abolition of the 45p tax rate. They believe that this would show the market that they were now behaving more responsibly.

This year’s Conservative party conference was supposed to be a moment of celebration for the new Tory leader. Instead there is a sense of mounting alarm. Liz Truss’s radicalism has been met with something approaching panic by both the markets and the public. The Bank of England has had to intervene in the gilts market to prevent ‘a material risk to UK financial stability’. The pound hit a 230-year low against the dollar. Meanwhile, Labour has moved into a 17-point lead in the polls. YouGov finds that just 12 per cent of the public view the government’s so-called ‘fiscal event’ as affordable. Only 19 per cent consider it fair. Tory activists at conference will give Truss the benefit of the doubt.

Tonight’s YouGov poll in the Times is brilliant news for Keir Starmer ahead of his conference speech tomorrow. It has Labour 17 points ahead, its biggest lead since the company started polling in 2001. These numbers, following the market reaction to the statement, are an awful start To be sure, the numbers reflect more voter disappointment with the government than a sudden bout of Starmer mania. Some 68 per cent of voters said the government was managing the economy badly. Only 12 per cent thought the ‘mini-Budget’ is affordable. Just 19 per cent said it was fair, against 57 per cent who thought it was not fair. And 69 per cent of those who voted Tory in 2019 opposed the scrapping of the 45p tax rate.