Trouble has mounted for the recently-elected British Prime Minister Liz Truss as reports claimed that lawmakers will try to oust her this week amid a political crisis. The Daily Mail quoted sources as saying that over 100 members of parliament (MPs), belonging to the governing Conservative Party, are ready to submit letters of no confidence in Truss to the head of the Conservative Party's committee which organises the leadership contest.

This has triggered a warning of general elections.

Meanwhile, Graham, the Conservative Party committee's head, argued that Truss, along with newly appointed Chancellor Jeremy Hunt, deserve a chance to set out economic strategy in a budget on October 31, the report said.

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Former minister Crispin Blunt was quoted as saying, "The game is up and it's now a question as to how the succession is managed." Meanwhile, Conservative lawmaker Robert Halfon fumed that the last few weeks had brought "one horror story after another".

In a damage control move, Liz Truss might meet moderate Tory MPs this week in a bid to avoid a leadership coup.

Truss had won the UK PM post and the Conservative Party leadership last month. Nearly six weeks into her prime ministerialship, she is now fighting for her political survival after ditching key parts of the programme.

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Errors with UK economic package

During the contest to lead the Conservatives, Truss called herself a disruptor who would challenge economic "orthodoxy", Associated Press reported. She had promised she would cut taxes and slash red tape, and would spur Britain's sluggish economy to grow.

On September 23, Treasury chief Kwasi Kwarteng announced the economic plan he and Truss had drawn up. It included 45 billion pounds ($50 billion) in tax cuts — including an income tax reduction for the highest earners — without an accompanying assessment of how the government would pay for them.

Truss was doing what she and allies said she would.

The fallout

However, a deep political and economic crisis engulfed the UK after these economic policies received backlash from the public.

The pound plunged to a record low against the US dollar and the cost of government borrowing soared.

The Bank of England was forced to step in to buy government bonds and prevent the financial crisis from spreading to the wider economy.

The central bank also warned that interest rates will have to rise even faster than expected to curb inflation that is running at around 10 percent, leaving millions of homeowners facing big increases in mortgage payments.

Recently, Kwasi Kwarteng, the UK Finance Minister, was fired and replaced by former foreign minister Jeremy Hunt. At a brief, the prime minister also acknowledged that “parts of our mini budget went further and faster than markets were expecting.”

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She reversed a planned cut in corporation tax, another pillar of her economic plan, to “reassure the markets of our fiscal discipline.” Earlier this month, the government had put an end to its plan to remove the top income tax rate after public outrage. However, it failed to quell the market turbulence.

Meanwhile, Goldman Sachs has downgraded its growth forecast for the UK economy following the government's tax U-turns, according to a Bloomberg report.

Damage control

Hunt has signaled that he plans to rip up much of Truss' remaining economic plan when he makes a medium-term budget statement on October 31. He said tax increases and public spending cuts will be needed to restore the government’s fiscal credibility.

Hunt insisted on Sunday: “The prime minister’s in charge...She’s listened. She’s changed. She’s been willing to do that most difficult thing in politics, which is to change tack,” Hunt was quoted by the BBC as saying.

He will outline details of the plans later on Monday.

What's ahead for Truss

The UK PM had been under a lot of pressure to rethink her economic policies as opinion polls showed that the support for the ruling Conservative Party reducing and lawmakers from her own party allegedly plotting to oust her following a tumultous five weeks in office.

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According to reports, Conservative lawmakers are agonizing about whether to try to replace their leader for a second time this year. In July, the party had forced out Boris Johnson as the prime minister over some scandals.

(With inputs from agencies)

First Published:Oct 17, 2022 2:37 PM IST