After tax U-turn, Truss pledges to steer Britain through 'stormy days'

BIRMINGHAM, England Prime Minister Liz Truss pledged Wednesday to steer Britain through stormy days and transform its economy, fighting to restore her authority over a party in revolt after a chaotic first month in office.

Addressing Conservative lawmakers and members at an annual conference overshadowed by internal bickering and confusion over policy, Ms Truss said the party needed to unite to kick-start stagnant growth and tackle the many problems facing Britain.

So far, however, her misfiring attempt to cut 45 billion (S$73 billion) of taxes and hike government borrowing has sent turmoil through markets and her party, with opinion polls pointing to electoral collapse rather than a honeymoon period for the new leader.

“We gather at a vital time for the United Kingdom. These are stormy days,” she said, referring to the Covid-19 pandemic, war in Ukraine and the death of Britain’s longest reigning monarch, Queen Elizabeth.

“In these tough times, we need to step up. I’m determined to get Britain moving, to get us through the tempest and to put us on a stronger footing,” she added.

As she started to speak, two protesters held up a sign asking, Who voted for this?

Ms Truss paused her speech, as the protesters shouted slogans, including Who voted for fracking?

They were escorted away by security personnel as the crowd chanted, Out! Out! Out!.

Ms Truss laughed, and resumed: Later on in my speech, my friends, I am going to talk about the anti-growth coalition. But I think they arrived at the hall a bit too early.

Ms Truss, elected by party members and not the broader electorate, was addressing the party faithful after she was forced to reverse plans to scrap the top rate of tax.

She acknowledged that change brings “disruption”.

That U-turn has emboldened sections of her party who are now likely to resist spending cuts as the government seeks ways to fund the overall fiscal programme. That risks not only the dilution of her “radical” agenda but also raising the prospect of an early election.

Having entered the conference hall to a standing ovation and the sound of M People’s Moving On Up, Ms Truss told party members and lawmakers that she wanted to build a “new Britain for the new era”.

“For too long, the political debate has been dominated by how we distribute a limited economic pie. Instead, we need to grow the pie so that everyone gets a bigger slice,” she said. “That is why I am determined to take a new approach and break us out of this high-tax, low-growth cycle.” More On This Topic Kwarteng to bring forward UK fiscal plan to calm markets Truss tries to soothe angry Britons, citing 'clear plan' She said she would not allow the anti-growth coalition, including the opposition Labour Party and trade unions, to stop the country from progressing.

“I will not allow the anti-growth coalition to hold us back, she said.

The conference, once expected to be her crowning glory after being appointed prime minister on Sept 6, has turned into a personal nightmare and a battle for the country’s political future.

As the debate moved on from tax cuts to how the government would fund them, lawmakers and ministers openly clashed, in stark contrast to the sense of discipline on display at the opposition Labour Party conference last week.

Some lawmakers fear Ms Truss will break a commitment to increase benefit payments in line with inflation, something they argue would be inappropriate at a time when millions of families are struggling with the cost of soaring prices.

Ministers say they have yet to decide and are obliged to look at economic data later this month.

While markets have largely stabilised after the Bank of England stepped in to shore up the bond market – albeit after the cost of borrowing surged – opinion polls now point to an electoral collapse for the Conservatives.

Mr John Curtice, Britain’s best known pollster, said before the speech that Labour now held an average lead of 25 percentage points, and the Conservatives needed to accept they were “in deep, deep electoral trouble”. REUTERS More On This Topic Britain in crisis: How not to run a country Being famously flexible won't be enough for Truss