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Daily Mirror
Daily Mirror
Politics
Lizzy Buchan

6 dramatic flashpoints facing new PM Liz Truss at chaotic Tory party conference

When Liz Truss became Prime Minister less than four weeks ago, Tory conference was going to be the time to bask in the glow of her first few weeks in power.

Instead, Ms Truss is grappling with an economic crisis of her own making after her tax-cutting plans spooked jittery markets, with the pound crashing to a record low against the dollar and the cost of Government borrowing soaring.

Once the darling of the Tory grassroots, the new PM heads into her party's annual conference in Birmingham facing mutinous mutterings from her own MPs - and the shadows of her ousted rivals looming large.

To make matters worse for Ms Truss, Keir Starmer breezed through his party conference last weekend, with one poll handing the resurgent Labour party an eye-watering 33 point lead over the Conservatives.

This all comes on top of the spiralling cost of living pressures, the ongoing fallout from the war in Ukraine and soaring NHS waiting lists.

Liz Truss is gearing up for her first Tory conference as leader (PA)

Here are the hurdles awaiting the Prime Minister in Birmingham.

The economy

Promises made during a Tory leadership contest don't always survive contact with reality.

But Friday's mini-Budget went beyond what the most right-wingers had even imagined, with an estimated £45 billion in tax cuts - including the surprise abolition of the 45p top rate of income tax - and an end to the cap on bankers bonuses.

The vast spending spree was dubbed a "mini- Budget " because the Government didn't request proper independent forecasts from the Office for Budget Responsibility (OBR).

Office For Budget Responsibility chairman Richard Hughes, accompanied by colleagues Andy King and Prof. David Miles in Downing Street (Getty Images)

This decision has been blamed for triggering panic in the markets, already jittery over the impact of the war in Ukraine, prompting the pound to fall to a record low against the dollar and an emergency £65billion intervention from the Bank of England to shore up pension funds.

Ms Truss and Chancellor Kwasi Kwarteng are now scrambling to restore confidence - both in the financial markets and among their own MPs.

But they are resisting calls to U-turn, and refusing to bring forward publication of the OBR's forecasts, which will be completed next Friday.

The economic situation will be top of the agenda at Tory conference, among MPs and members pride themselves on being the party most trusted on the economy. This looks less plausible now.

Whatever Mr Kwarteng says will likely move markets, so all eyes will be on his speech on Monday on “delivering a growing economy" and his appearance at the right-wing Institute for Economic Affairs fringe on Tuesday.

Chancellor Kwasi Kwarteng (Simon Walker / HM Treasury)

Cost of living crisis

Mounting economic uncertainty risks worsening the cost of living pressures already facing Brits.

Lenders have been withdrawing mortgage products over fears of interest rate hikes - throwing Liz Truss's pledge to unlock a new generation of home owners into doubt.

Spiralling mortgage costs will be a big issue for the Tories - and there are plenty of fringe events and industry receptions where this could get uncomfortable.

Families are facing soaring energy costs (Getty Images/iStockphoto)

Getting inflation under control to curb rising prices and real terms pay cuts for public sector workers will also be on MPs minds.

The Government's £60billion energy bills support scheme, which comes into force today, is due to be funded by Government borrowing at a time when costs are soaring.

All MPs will have constituents struggling with their bills and questions will be raised over the scheme and whether it is enough.

Levelling up

Boris Johnson's flagship policy is the focus of a string of conference event as Ms Truss faces pressure to commit to maintaining her predecessor's ambitions.

Ms Truss often talks about growing up in Paisley and Yorkshire but one of her worst mistakes in the leadership race was proposing plans to cut civil service pay outside London. She U-turned swiftly after a furious outcry.

Her plans to cut stamp duty will disproportionately benefit buyers in London and the south of England, according to analysis, while she admitted that her tax cuts would benefit the wealthiest Brits most.

Red Wall Tories will want something to show their constituents at the next election, or risk losing their seats to voters who don't like what they see now Boris Johnson is gone.

Boris Johnson, Rishi Sunak and other big beasts

Boris Johnson is said to be planning to skip Tory conference after being ousted from power by his own MPs.

The former PM has been keeping a fairly low profile, while he focuses on shoring up his finances, rather than making big interventions.

Boris Johnson will steer clear - but there are some Tories who want him back (AFP via Getty Images)

But his absence won't curb the mutterings by loyalists who want him back - or anxious Tories who already have buyers remorse over Ms Truss.

Failed leadership contender Rishi Sunak is also expected to stay away.

A source close to the former Chancellor told The Times he will be "in Yorkshire instead" to "give Truss all the space she needs to own the moment".

Mr Sunak repeatedly warned that Ms Truss's economic plans spelled disaster but Tory members were drawn in by tax-cutting agenda.

Defeated Rishi Sunak warned repeatedly against Liz Truss's plans (REUTERS)

Other top Tories out of favour with team Truss are likely to skip conference, including ex-deputy PM Dominic Raab, former Home Secretary Priti Patel, ex-Health Secretary Sajid Javid and former Cabinet Minister David Davis.

Michael Gove, however, has a packed fringe diary and could prove a headache for Ms Truss.

Mutinous Tories

Morale among backbenchers has taken a battering in the past week, with anger spilling over at the PM and the Chancellor.

Some Tories are already eyeing another leadership race, with letters of no confidence already submitted to the 1922 Committee.

Tory ex-Chancellor Ken Clarke said the PM and Chancellor “have made a catastrophic start” and the mini budget must be “torn up, while Tory Treasury Committee chairman Mel Stride warned "there's a lot of concern within the parliamentary party".

Labour's surge in the polls has also provoked disquiet. Tory veteran Sir Charles Walker said yesterday: "It's hard to construct an argument now that the Conservatives can win that general election."

With a number of high-profile Tories not attending, party whips were even reportedly calling around to get some MPs to go.

Her big speech

Against this backdrop, Liz Truss will need to give a barnstorming speech to get wavering Tories back on side.

The high-pressure moment comes on Wednesday and has the power to steady the ship - at least temporarily - and shape the narrative for the weeks to come.

But done badly, it can entrench negative ideas which are hard to shift once they've taken hold.

Remember Theresa May's 2017 speech where she coughed her way through it as the backdrop fell apart behind her and a prankster slipped through security to hand her a P45 life on stage.

Coming only months after she had lost the Tory Commons majority, it set the narrative for things to come.

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