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is that all there liz

From economic turmoil to chaos in the Commons: The events that led to Liz Truss's resignation

Truss announced her resignation yesterday afternoon after just 44 days in office.
12.06am, 21 Oct 2022
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LIZ TRUSS HAS resigned as British Prime Minister after just 44 days in office.

In a statement outside Number 10 Downing Street, she said she recognised she “cannot deliver the mandate” which Conservative Party members gave her a little over six weeks ago when she replaced Boris Johnson.

She will remain as prime minister until her replacement is chosen next Friday. 

Having being declared winner of the Tory leadership contest over rival Rishi Sunak on 5 September, Truss promised a “bold plan” to cut taxes and grow the economy.

However, her plans were halted just days into her premiership when the death of Queen Elizabeth II was announced and a ten-day period of national mourning was declared in the UK. 

In the weeks that followed, Truss presided over economic chaos, lost two of her most senior Cabinet ministers and endured open revolt by Tory MPs who had lost confidence in her. 

But how did things unfold so quickly in such a short space of time? Here are the events of the last six weeks that led to Truss’s downfall. 

The ‘mini’ budget

Truss’s troubles began when, just over two weeks into her term, newly appointed Chancellor Kwasi Kwarteng announced the economic package that they had devised together. 

Deemed a mini budget, it turned out to be anything but, as Kwarteng announced the biggest raft of tax cuts for half a century.

Using more than £70 billion of increased borrowing, he set out a package which included scrapping a 45% additional rate income tax band for those earning more than £150,000, abolishing a cap on bankers’ bonuses and bringing forward a cut in the basic rate of income tax from 20% to 19% to April 2023.

The tax-slashing budget sparked chaos in financial markets and saw the pound drop to its lowest level against the dollar since decimalisation in 1971. 

The Bank of England also announced it would buy up to £65 billion worth of government bonds – known as gilts – at an “urgent pace” to prevent borrowing costs from spiralling out of control amid fears some UK pension funds could collapse. 

Despite mounting calls, including from the International Monetary Fund, that the government should reevaluate the tax cuts, Truss defended Kwarteng and the mini budget in a raft of five-minute interviews on several local radio stations. 

“We had to take urgent action to get our economy growing, get Britain moving and also deal with inflation,” Truss told BBC Radio Leeds.

‘It was a decision the Chancellor made’

But in an interview with BBC’s Laura Kuenssberg on 2 October, Truss admitted that she could have done more to prepare the ground for the financial statement.

“I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act,” she said.

“But I do accept we should have laid the ground better… I have learnt from that and I will make sure that in future we do a better job of laying the ground.”

During the interview, Truss attempted to distance herself from the most controversial part of the mini budget.

Asked whether scrapping the top rate of tax was discussed with the wider Cabinet, she said: “No, no, we didn’t. It was a decision that the Chancellor made.”

Truss repeatedly refused to rule out cuts to public services, saying she would not preempt Kwarteng’s medium-term fiscal plan in November, and also left the door open to a real-terms pay cut for those on low wages.

Rumblings in the Tory party had already begun in the wake of the turmoil caused by the mini budget, with Michael Gove claiming the abolition of the top rate of tax at a time when people are facing hardship displays “the wrong values”.

Pressed on whether he would vote for the package in the Commons, he said: “I don’t believe it’s right.”

Former culture secretary Nadine Dorries also accused Truss of failing to be loyal by “throwing your Chancellor under a bus” on the first day of the Conservative Party conference.

It followed an opinion poll which put Labour on 46%, 19 points clear of the Conservatives on 27%.

The lady is for turning

The following day, in a dramatic U-turn, Truss and Kwarteng abandoned their plan to abolish the 45% rate of income tax for top earners.

“We get it and we have listened,” Truss said, less than 24 hours after she said she remained absolutely committed to the cut.

The move came as a massive blow to their authority and caused further divisiveness within the Tory party. 

Home Secretary Suella Braverman publicly said she was “disappointed” by the tax U-turn, and accused Tory rebels like Michael Gove of staging a “coup”.

This prompted trade secretary Kemi Badenoch to criticise Braverman, saying: “I think that sort of a language is just too inflammatory.”

Cabinet ministers emerged in the following days to urge the party to unite behind Truss or risk ending up in opposition, but the infighting continued, with MPs urging the prime minister to abandon other parts of the budget in an effort to restore market confidence.

On ITV’s Peston programme, Conservative former minister David Davis deemed the mini budget a “maxi-shambles” and suggested reversing some of the tax cuts would allow Truss and Kwarteng to avert leadership challenges for a few months.

Meanwhile, MPs openly criticised Truss at a meeting of the 1922 Committee, with some raising concerns about soaring mortgage rates and the Tories’ slump in the polls.

Kwarteng is shown the door

Having been close friends and political allies for years, the prime minister and her chancellor seemed to be on the same page despite the economic and political turmoil. 

Truss insisted she would not cut spending to balance the books, despite British government borrowing costs having hit a 20-year high, while Kwarteng said that his “total focus is on delivering on the mini-budget” in response to U-turn speculation.

But by 14 October, this unity came to an end. Truss sacked Kwarteng after he flew back early from International Monetary Fund talks in Washington.

He was swiftly replaced by Jeremy Hunt, a former foreign secretary who backed her rival Rishi Sunak in the Tory leadership contest.

While Hunt’s appointment was welcomed by some Tory MPs as “an experienced pair of hands”, it was not popular with all of them, with some questioning why Kwarteng was the one who had to go when he was implementing the policies Truss advocated in her leadership campaign.

More U-turns

At a hastily arranged press conference following Kwarteng’s departure, Truss dismissed calls for her resignation, saying she was “absolutely determined to see through what I have promised”.

A raft of reversals then followed. Plans to scrap a corporation tax hike from 19% to 25% were scrapped, while Truss admitted that public spending would have to grow less rapidly than previously planned.

Taking just four questions from journalists, Truss dodged a question on whether she had any “credibility” to continue as Prime Minister and swiftly left after just eight minutes, with reports later suggesting the press conference had only made matters worse.  

Days later, former minister Crispin Blunt became the first Tory MP to publicly call for Truss to quit, saying the “game is up” for the Prime Minister. He was followed by Andrew Bridgen and Jamie Wallis.

Other senior figures within the parliamentary party also expressed deep unease with Truss’s leadership, but stopped short of calling for her to go.

‘In office, but not in power’

On 17 October, Jeremy Hunt shredded the bulk of the mini budget, bringing so-called Trussonomics to an end.

In an emergency statement, he confirmed he was ditching “almost all the tax measures” in the mini budget, including the planned cut to the basic rate of income tax from 20% to 19% in April next year.

He also scaled back on the energy support package, and axed VAT-free shopping for overseas tourists and a freeze on alcohol duty.

The move was a humiliating one for Truss, who failed to answer an urgent question submitted by Labour later that afternoon in the House of Commons. 

In a sit-down interview with the BBC’s Chris Mason that evening, she apologised for her “mistakes” but pledged to lead the Tories into the next general election.

The UK newspapers were scathing in their verdict of the extraordinary day in British politics the next morning.

The Sun dubbed Truss the “ghost PM”, while The Daily Mail wrote that she was “in office, but not in power”, a reference to the appearance of government control moving into the new Chancellor’s hands.

‘A fighter, not a quitter’

Another U-turn was announced on Wednesday when Truss took part in Prime Minister’s Questions and insisted that she was “completely committed” to the triple lock on state pensions. 

Truss said that she was “a fighter, not a quitter” during a humiliating clash with Labour leader Keir Starmer, who said the Conservatives’ economic credibility was “gone” and said of the Prime Minister: “Why is she still here?”

Later that evening, Suella Braverman dramatically quit as home secretary, citing a “technical infringement” of the ministerial rules.

In her resignation letter, she wasted no time in criticising Truss’s “tumultuous” premiership.

“It is obvious to everyone that we are going through a tumultuous time. I have concerns about the direction of this government,” she wrote.

“Not only have we broken key pledges that were promised to our voters, but I have had serious concerns about this government’s commitment to honouring manifesto commitments, such as reducing overall migration numbers and stopping illegal migration, particularly the dangerous small boats crossings.”

Her exit came just five days after Kwarteng’s, causing Truss to lose two people from the so-called “four great offices of state” within her first six weeks in power.

Commons chaos

On the same evening as Braverman resigned, the Commons descended into mayhem. 

A Labour vote in the Commons seeking to ban fracking caused confusion among Tory MPs after they were told it was being treated as a “confidence motion” in Truss’s embattled Government.

Climate minister Graham Stuart told the Commons minutes before the vote that “quite clearly this is not a confidence vote”, despite deputy chief whip Craig Whittaker earlier issuing a “100% hard” three-line whip, meaning any Tory MP that rebelled could be thrown out of the parliamentary party.

In extraordinary scenes that followed, Cabinet ministers Therese Coffey and Jacob Rees-Mogg were among a group of senior Tories accused of pressuring colleagues to go into the “no” lobby, with Labour former minister Chris Bryant saying some MPs had been “physically manhandled into another lobby” and “bullied” into voting with the party.

Business Secretary Rees-Mogg insisted he saw no evidence of anyone being manhandled, but senior Tory MP Charles Walker said what took place was “inexcusable” and “a pitiful reflection on the Conservative Parliamentary Party”.

Labour’s fracking ban motion was defeated by 230 votes to 326, with the division list showing 40 Conservative MPs did not vote.

It seems this was the final straw. Overnight, multiple Tory MPs called for Truss to go, including former Brexit minister David Frost, who backed her to be prime minister.

“As Suella Braverman made so clear this afternoon, the Government is implementing neither the programme Liz Truss originally advocated nor the 2019 manifesto. It is going in a completely different direction,” he wrote in The Telegraph.

“There is no shred of a mandate for this. It’s only happening because the Truss Government messed things up more badly than anyone could have imagined … Something has to give”.

Just hours later, Truss announced her resignation.

Talk now turns to who will replace her. The 1922 Committee has announced that a leadership campaign will take place over the next week, with a successor to be chosen by next Friday.

Additional reporting from the Press Association

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