Liz Truss's premiership approaching nadir

U-turn on tax cuts expected to sink Chancellor Kwasi Kwarteng while crushing the prime minister's credibility

Prime Minister Liz Truss during a tough appearance at PM Questions on Wednesday. Her authority appears to be ebbing away over an impending U-turn on taxation. PA

Politics is largely a question of judgment and, often, comes down to choosing between the lesser of bad options.

UK Prime Minister Liz Truss is about to discover how unforgiving politics, and her own party, will be over poor decision-making with her pursuit of tax cuts for growth.

The prime minister’s authority is ebbing quicker than the painful eight months her predecessor Boris Johnson endured before his exit from Downing street.

In Westminster’s corridors the almost facetious suggestion after the party conference debacle that a coronation of Rishi Sunak as the new leader was possible is no longer an inane aside.

Three weeks of market turmoil after Chancellor Kwasi Kwarteng’s breath-taking gamble of a mini-budget has rinsed the Tory’s reputation of sound economic management.

Now Ms Truss and her chancellor are watching the economic tornado they unleashed swirl round back devastatingly towards them.

The greatest error was that they went ahead with the unfunded tax cuts despite very direct warnings about the consequences.

What is so worrying about Ms Truss’s judgment is that she relied upon the maverick economic ideology of Prof Patrick Minford, 79.

It was his name she coyly raised during a BBC interview, arguing that cutting taxes would lead to growth despite the interest rate danger.

Mr Sunak, a multimillionaire former chancellor with a strong City CV, pounced on her poor economic grammar, stating that her tax bonanza would amount to a £40 billion ($45.1bn) shortfall, rate increases and that tackling inflation was key to fiscal responsibility.

He continued campaigning for sensible economics, which had wide appeal to the British public but not to the 180,000 Tory membership voting for the next leader.

Entrusting Britain’s future, and more particularly the Conservative Party’s, to the membership’s judgment is no longer a proposition.

Chancellor of the Exchequer Kwasi Kwarteng arrives at London Heathrow Airport after travelling from the US ahead of schedule for urgent talks with Prime Minister Liz Truss as expectations grow that they will scrap parts of their mini-budget to reassure markets. PA

There are now a lot of senior and experienced Conservatives on the backbenches ― the result of another questionable decision by Ms Truss to freeze out nearly all Mr Sunak’s backers from government posts.

It is these grandees who it now appears are making the running to unseat the occupants of Downing Street and rapidly replace them with the pairing of Mr Sunak and the much respected Penny Mordaunt, who between them had support of more than two thirds of MPs in the leadership contest.

Ms Truss's survival depends on her actions in the coming hours. A U-turn on slashing corporation tax from 25 per cent to 19 per cent along with a reversal on one other of her giveaways should be enough to satisfy the market’s distress at what actually amounted to £60 billion in unfunded tax cuts.

Whether Mr Kwarteng survives that shredding of his economic reputation will be known in days, if not hours.

He, alongside his leader, may limp on to the fiscal announcement of 31 October but events may well overtake them.

“There is an irony to this,” said the former home secretary Priti Patel. “In that market forces will probably dictate some of these changes now.”

Britain's Prime Minister Liz Truss during Prime Minister's Questions in the House of Commons in London, addressing Parliament for the first time since abandoning her disastrous tax-slashing economic policies. Here, 'The National' looks at her time in power so far. AFP

Liz Truss speaks to Grant Shapps at Downing Street as he is appointed Home Secretary, after the resignation of Suella Braverman. Photo: Simon Dawson / No 10 Downing Street

A mural by artist Ciaran Gallagher in Belfast is updated to reflect Liz Truss's current political troubles. PA

Britain's new Chancellor of the Exchequer Jeremy Hunt announcing tax and spending measures at the House of Commons in London, with Liz Truss sitting on the bench behind him. AFP

Liz Truss gives a speech after sacking Kwasi Kwarteng as chancellor of the exchequer. Reuters

A protest by climate change group Extinction Rebellion in central London. Ms Truss has said the group is part of an 'anti-growth coalition' with trade unions and the main opposition Labour Party. AFP

Ms Truss has come under increasing pressure during her short time as prime minister. AFP

An Extinction Rebellion protest outside Downing Street on the day Mr Kwarteng was removed from the government. AP

Ms Truss with members of the England women's football team and the European Championship trophy in Teddington, south-west London. Getty

Ms Truss arrives for a meeting of the European Political Community at Prague Castle in the Czech Republic. AP

Ms Truss and her husband Hugh O'Leary wave after her keynote speech at the Conservative Party conference in Birmingham. AP

Liz Truss gives a speech at the Conservative Party Conference. EPA

Ms Truss meets with Mr Kwarteng, chancellor of the exchequer at the time. Photo: Andrew Parsons / CCHQ

Ms Truss and Mr Kwarteng visit a construction site for a medical innovation campus in Birmingham. AFP

Ms Truss meets US President Joe Biden for talks at the UN headquarters in New York. PA

Ms Truss delivers a speech at the 77th session of the General Assembly at the UN headquarters in New York. AP

The British prime minister holds a bilateral meeting with Turkish President Recep Tayyip Erdogan in New York. Reuters

Ms Truss meets French President Emmanuel Macron at the UN headquarters in New York. Reuters

Ms Truss speaks to the media during her visit to the Empire State building in New York. AP

Britain's new leader speaks during the state funeral of Queen Elizabeth at Westminster Abbey, London. PA

Ms Truss and her husband Hugh O'Leary observe a minute's silence at Number 10 Downing Street following the death of the queen. Reuters

Britain's Labour Party leader Sir Keir Starmer and Ms Truss leave after a service for the reception of Queen Elizabeth's coffin at Westminster Hall in the Palace of Westminster. AFP

Ms Truss joins the Speaker Lindsay Hoyle and selected MPs to take the oath and swear allegiance to King Charles III in the House of Commons chamber. PA

King Charles during his first audience with Ms Truss at Buckingham Palace, London, following the death of Queen Elizabeth. Getty Images

Ms Truss gives a reading during a service of prayer and reflection, following the passing of Queen Elizabeth, at St Paul's Cathedral in London. Getty Images

The British prime minister makes a statement outside 10 Downing Street in London following the queen's death. Bloomberg

Ms Truss speaking during her first weekly Prime Minister's Questions session at the House of Commons in London. AFP

Front pages of a selection of British national newspapers, each leading with a story about Ms Truss becoming Britain's new prime minister. AFP

People walk past an image in central London of Ms Truss on the side of a protest bus calling for a citizens' assembly. Reuters

Ms Truss holds her first Cabinet meeting at 10 Downing Street. Reuters

Ms Truss speaks at Downing Street on the day she took over as prime minister from Boris Johnson. EPA

Ms Truss poses with her husband Hugh O'Leary at Downing Street before entering as prime minister for the first time. EPA

Ms Truss is welcomed by staff in Downing Street as she enters the famous prime ministerial offices for the first time. Andrew Parsons / No 10 Downing Street

New Health Secretary Therese Coffey and Number 10 staff shelter from a downpour as they wait for Ms Truss to arrive in Downing Street. PA

Liz Truss makes a speech outside 10 Downing Street, London, after meeting Queen Elizabeth II and accepting her invitation to become prime minister and form a new government. PA

Queen Elizabeth II greets the newly elected leader of the Conservative Party, Ms Truss, at Balmoral Castle in Scotland. The queen invited Ms Truss to become prime minister and form a new government. Getty Images

Stability was “crucial” for the markets and British people, she said.

Alicia Kearns, from a different wing of the party, mirrored her thoughts while attacking Ms Truss’s suggestion that there was an “anti-growth coalition” among left-wingers.

“The markets are not left,” she said. “The fact they have been spooked, is something that should be taken incredibly seriously.”

Also spooked are vast numbers of Tories fearful of annihilation in the next general election, purportedly in two years but could come much sooner.

Barely 40 days with a new leader, the timid discussions in Westminster have now become entirely telescopic in their focus for a change at the top.

Under that scrutiny Ms Truss's judgment will need to be exceptional if she is to surpass George Canning’s tenure of 119 days in office as the shortest serving prime minister.