British Prime Minister Liz Truss will say Wednesday that all change brings disruption as she tries to convince her Conservative Party — and the country — that the turmoil unleashed by her tax-cutting economic agenda will bring more prosperity in the end.
Truss is due to close a tumultuous Conservative conference with a speech to delegates in the central English city of Birmingham. Many are in a glum mood after a four-day gathering that saw policy U-turns from the government and open rebellion from lawmakers who fear the party is doomed to lose the next national election.
Truss says she will stick with her plan to reshape Britain’s economy through tax cuts and deregulation in a bid to end years of sluggish growth and create "a new Britain for the new era.”
In her most important speech since taking office a month ago, she will say that “whenever there is change, there is disruption.”
“Not everyone will be in favor,” Truss will say, according to extracts of the speech released by her office. “But everyone will benefit from the result — a growing economy and a better future. That is what we have a clear plan to deliver.”
That plan already has many critics inside the Conservative Party. Truss’ first big policy, a stimulus package that includes 45 billion pounds ($50 billion) in tax cuts to be paid for by government borrowing, alarmed financial markets when it was announced Sept. 23. The pound plunged to a record low against the dollar, and the Bank of England was forced to intervene to prop up the bond market and stop a wider economic crisis.
Under political and financial pressure, the government on Monday scrapped the most unpopular part of its budget package: a tax cut on earnings above 150,000 pounds ($167,000) a year. That will save about 2 billion pounds, a small share of the government’s 45 billion-pound tax-cutting plan. It’s unclear how the rest will be paid for.
The government says it will publish a fully costed fiscal plan, alongside an economic forecast from the independent Office for Budget Responsibility, on Nov. 23.
Truss says her policies will bring economic growth, higher wages and eventually more tax revenue for the government to spend. But critics say the plans do little to help millions of people who are struggling right now with a cost-of-living crisis fueled by soaring energy prices.
Truss said Tuesday that she was “very committed to supporting the most vulnerable,” pointing to a cap on energy prices that took effect Oct. 1. But she refused to promise that benefits and state pensions will increase in line with inflation, which has been the practice for years.
That has alarmed some Conservative lawmakers, who say it amounts to attacking the poor while giving tax cuts to the better-off. Several said during the conference that they would not vote for the measure.
In her speech, Truss will paint Britain’s economic challenges as part of the global crisis unleashed by Russia’s invasion of Ukraine.
“The scale of the challenge is immense,” she plans to say. “War in Europe for the first time in a generation. A more uncertain world in the aftermath of COVID. And a global economic crisis. That is why in Britain we need to do things differently.”
As delegates met for panel discussions and wine receptions inside a cavernous conference hall, the government descended into factional fighting. Home Secretary Suella Braverman, a Truss ally, accused Conservative lawmakers who disagreed with Truss of staging “a coup.”
Amid the Tory turmoil, the opposition Labour Party has taken a commanding lead in opinion polls. A national election does not have to be held until 2024, but many Conservatives fear the party is running out of time to close the gap.
Polling expert John Curtice said “all of the ingredients for electoral defeat are in place" for the Conservatives.
“The question is whether or not in the end they are combined and put into the oven and thereby baked into the memories and perceptions of voters,” he told Sky News.
