To a few, “the fiscal event” on 23 September represented a long overdue return to true Conservative principles, but to the majority it was a reckless gamble with a Prime Minister and Chancellor playing Russian roulette with the British economy and peoples’ livelihoods.
Whatever your views might be on the merits or otherwise of the fiscal event the past week has, if nothing else, been dramatic. We’ve been pummeled with daily news of a sliding pound, soaring borrowing costs, and mortgage products being withdrawn at record levels. By next spring we are told interest rates could be as high as 6% and mortgage payments could increase up around £800 a month. Repossessions could then start to rise alarmingly.
The pound may have stabilised and borrowing costs may have come back down thanks to the Bank of England’s intervention to buy £65 billion of government bonds. But the unrelentingly bad headlines have spooked, even scared, the electorate. Three polls out in the last 24 hours give Labour a poll lead over the Conservatives of 17% (Redfield and Wilton), 21% (Survation) and a staggering 33% (YouGov). The YouGov poll, if reflected in a general election, would give the Labour Party an unprecedented majority of close to 350 seats, with the Conservatives reduced to a parliamentary rump of just 60 or so. Liz Truss told us she was prepared to be unpopular - I doubt this was what she had in mind.
Of course, opinion polls are only a reflection of the electorate’s mood at a given moment in time, and after the last week’s headlines are perhaps not surprising. It’s worth remembering that John Major’s government had almost five years to recover from the Stirling crisis in September 1992 when interest rates soared to 15% and the pound had to be unceremoniously rejected from the ERM. The Conservatives lost their reputation for economic competence and despite the fact that the economy was actually booming by the time the 1997 general election came along, Tony Blair’s Labour Party won by a landslide. In contrast Liz Truss has just two short years to turn things around with most commentators doubting that the economic sunny uplands she and Kwasi Kwarteng have promised will be delivered.
This weekend's Conservative Party conference could be a bloody affair. Liz Truss has to give the performance of her life in her set piece conference speech on Wednesday, but as we have seen as recently as yesterday from her radio interviews, she is a poor orator with a very wooden delivery style. Her speech will be a crunch moment in her premiership. If she performs poorly and fails to rally the party faithful – who of course, voted for her as leader only a few weeks ago – then speculation about her future, already heard in the corridors of power, may grow rapidly among her members. Some Conservative MPs are already predicting Liz Truss will be gone by Christmas.
The parliamentary party will no doubt be in a state of shock, even panic, at the latest opinion polls. But under current party rules a new leader can’t be challenged for a year. So even if Sir Graham Brady, the long-standing chairman of the 1922 Committee, were to receive the requisite number of letters demanding a no-confidence vote, it would need a change of the rules to allow this before next September. Will the 1922 Committee come under pressure to do so? It might. But changing leader yet again and so soon after the last leadership contest is unlikely to impress an electorate which already looks as if its lost faith in this government.
We may yet see a series of eye-catching announcements, and even the odd U-Turn, designed to steady the ship and reassure an anxious electorate. Kwasi Kwarteng may yet be forced to publish his economic plan over the next few days rather than wait until 23 November and that might provide some reassurance. It’s not impossible for things to improve and for Labour’s lead in the polls to narrow. Liz Truss has liked to position herself as the heir to Thatcher and in her speech to the 1980 party conference Margaret Thatcher, who was coming under enormous pressure to change direction with her economic policies, famously told us “the lady’s not for turning”. Is history repeating itself? Will Liz Truss dare invoke the spirit of Thatcher in her speech next week? If there is no U-Turn from the “fiscal event” and if those monthly mortgage payments soar next spring, the Conservative parliamentary party has a difficult calculation to make.
Hold on to your hats. Life in Westminster could get very bumpy!