The 5 Biggest Problems Facing Liz Truss As MPs Return To Westminster

Prime Minister Liz Truss delivers her keynote speech at the Conservative Party annual conference at the International Convention Centre in Birmingham. Picture date: Wednesday October 5, 2022. (Photo: Jacob King via PA Wire/PA Images)

When Liz Truss returns to parliament tomorrow after the party conference season, she will not have her troubles to seek.

Barely a month since taking over from Boris Johnson, the prime minister leads a bitterly divided Tory party and a country bracing for a grim winter of economic uncertainty.

Truss has already been forced into a humiliating U-turn over the government’s plans to cut tax for the rich.

Her MPs - most of whom did not support her leadership bid - are already openly speculating that she may be gone by Christmas.

Here HuffPost UK looks at the main issues clogging up Truss’s bulging in-tray.

Benefits rebellion

After forcing the PM and chancellor to back down on their plans to axe the 45p tax rate paid by the highest earners, Tory MPs now have a taste for blood.

The latest front in their battle with Number 10 is over whether benefits should be increased by the rate of inflation, or average earnings.

Truss is said to favour the latter option, which would save the Treasury around £5 billion, even though Johnson had previously promised to go with the more generous inflation-level rise.

Commons leader Penny Mordaunt became the most senior Tory MP to break ranks last week when she said benefits must rise in real terms, a call echoed by several other high-profile Conservatives, including former chancellor Sajid Javid.

They argue that during a cost of living crisis, it would be wrong effectively cut welfare payments. Former cabinet minister Andrew Mitchell spoke for many in the party when he said: “I didn’t go into politics to make people poorer.”

Downing Street says no decision has been made, but it seems inevitable that Truss will once again have to give in to her angry MPs.

It’s the economy, stupid

The biggest mistake of Truss’s fledgling premiership so far was undoubtedly Kwasi Kwarteng’s disastrous mini-budget.

Including £45 billion-worth of unfunded tax cuts, and with no assessment by the independent Office for Budget Responsibility on what it meant for the nation’s finances, was always going to be a gamble.

The reaction of the money markets - which saw the value of the pound plunge and mortgage costs soar - meant that it did not pay off.

That led to the 45p tax U-turn and this morning forced the chancellor to bring forward his medium term fiscal plan setting out how he plans to balance the books from November 23 to October in a bid to placate the City.

Time is running out for the new PM and chancellor to come up with a viable plan for turning round the UK’s spluttering economy.

Charming or offensive?

Truss will this week launch a charm offensive in a bid to heal the divisions between Downing Street and Tory MPs which were writ large at last week’s Tory conference.

She will hold regular “policy lunches” with groups of 30 MPs, as well as meetings once a month in Number 10 with Conservative backbenchers, so she can hear their grievances and promise to act on them.

As one former minister told HuffPost UK, Truss needs to assert “discipline in the cabinet and diplomacy with the backbenches”.

But winning round her sceptical colleagues will be easier said than done.

Michael Gove appears to be on a personal mission to cause trouble for the prime minister, while Nadine Dorries - who backed Truss’s leadership bid - has warned the party faces “a complete wipeout” unless she changes course.

As an olive branch to her critics, Truss has appointed Greg Hands, who backed Rishi Sunak for the Tory leadership, as international trade minister following the sacking of Conor Burns.

But it will take a lot more than that win round her revolting MPs.

Protocol problems

Despite Johnson’s promise to “get Brexit done” the thorny issue of trade between Britain and Northern Ireland remains unresolved.

In her previous role as foreign secretary, Truss took a hardline approach - despite her inability to properly pronounce the Irish prime minister’s job title.

But talks between Dublin and her new-look government have gone well so far, even if a final deal on how the Northern Ireland Protocol should work in future remains out of reach.

In the meantime, Truss is pushing ahead with a bill which would give ministers the power to over-ride parts of the Protocol, despite EU warnings that it would breach international law.

Striking a deal with Brussels and Dublin would be a major win for Truss, but would any agreement be acceptable to the Brexiteer hardliners on her backbenches?

Labour pains

Few, if any, new prime ministers have enjoyed such a short honeymoon period.

The death of the Queen just two days after she became PM robbed Truss of the opportunity to make her mark in the job.

Even the introduction the energy price guarantee - which the government claims will save the average household £1,000 a year on their gas and electricity bills - was completely overshadowed by Her Majesty’s passing.

When the country finally emerged from the period of national mourning, any goodwill Truss had was completely wiped out by the disastrous mini-budget and the resulting economic chaos.

Inevitably, this led to a boost in the polls for Labour - but no one foresaw just how comprehensively the public mood turned against the Tories.

A YouGov survey of 1,737 British adults carried out for The Times put support for Labour at 52% and the Tories at 22%, while an Opinium poll on Sunday put Labour on 47% and the Conservatives on 26%.

Former Conservative chancellor George Osborne warned his party could suffer a “wipe out” at the next election, likening the first few weeks of Truss’s leadership to the aftermath of a “political experiment” that has “blown up the chemistry lab”.

“I think a Tory wipe-out is potentially on the cards but we’ve got two years to run,” he told the Andrew Neil Show on Channel 4.

He said Labour “hasn’t quite sealed the deal in the way that Tony Blair and Gordon Brown had sealed the deal in the mid-90s” but it is “certainly a possibility”.

His concerns were echoed by Nadhim Zahawi, the chancellor of the Duchy of Lancaster, who issued a plea to his party to come together or risk defeat.

“We’ve got two years to demonstrate to the nation that we can deliver.

“I want my colleagues to obviously focus, because any dither or delay will end in defeat.”

Whether they do or not remains to be seen.

This article originally appeared on HuffPost UK and has been updated.

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