'Back again? Dear, oh dear': King Charles holds audience with Liz Truss / ‘She’s totally lost it’: inside story of the unravelling of Liz Truss’s premiership

‘She’s totally lost it’: inside story of the unravelling of Liz Truss’s premiership

 

Approaching one year on from the start of her tenure, a look back on how it all fell apart within 49 days

 

by Aubrey Allegretti Senior political correspondent

Fri 1 Sep 2023 07.00 EDT

 

When Liz Truss addressed the nation from Downing Street in her first speech as prime minister, she promised “action this day, and action every day”. It was meant to be a Churchillian call to arms demonstrating her determination to solve the intractable issues facing Britain. Instead, it foreshadowed the most chaotic period in recent political history.

 

As the sole survivor through the cabinets of the three previous Conservative-led governments, Truss was used to putting pragmatism above principles. But that approach was cast aside when she swept in to No 10.

 

In her first week in office, an aide suggested she should “be like Blair” and avoid immediately rocking the boat. He was slapped down. Truss told him to stop talking – and the aide was said to have been cut out of further meetings.

 

Such single-mindedness quickly collided headlong with the realities of government. With an inexperienced team in No 10, and a divided party, the foundations of her administration were shaky from the start. Within 49 extraordinary days, it had fallen apart.

 

‘Things got off to a bad start on day one’

The early omens were hardly encouraging. On Tuesday 6 September, Truss flew to Scotland to meet Queen Elizabeth, who would formally invite her to form a new government. Thick fog delayed her plane’s landing at Aberdeen airport. Finally arriving at Balmoral, Truss shook hands with the smiling monarch. The bad weather persisted, delaying Truss’s return to Downing Street.

 

As she was driven towards No 10 on the last leg of her round trip, the car made several detours to wait for a break in the rain in which Truss could make a speech, while a bin bag was temporarily used to protect the waiting, sodden podium.

 

Truss eventually made a hurried address lasting four minutes and five seconds. She warned of “severe global headwinds” but insisted Britain would “ride out the storm”.

 

That evening, she appointed a new cabinet, but she left Wendy Morton, the chief whip, and Thérèse Coffey, the deputy prime minister, to conduct junior ministerial hirings and firings.

 

“It was silly of Liz not to squeeze every ounce of goodwill out of people by being the one to appoint them, so things got off to a bad start on literally day one,” said one of those appointed that day.

 

Instead, Truss was putting the finishing details to a package to protect people from spiralling energy costs. The plan had been worked on in secret during the leadership race as millions fretted about whether they could afford their bills come winter. Though she had railed during the leadership campaign against “handouts”, Truss relented.

 

The energy price guarantee was relatively well received, with no observable wobbles in the markets despite the intervention’s £100bn price tag. But 55 minutes into a Commons debate on the issue on 8 September, a cabinet colleague appeared at Truss’s side with news that any prime minister would dread. Nadhim Zahawi, the chancellor of the duchy of Lancaster, handed her a note saying the queen’s health was deteriorating.

 

It was a moment for which officials had been preparing for years. When the queen’s death was announced at 6.30pm, Operation London Bridge was activated – and the cogs in the British political system ground to a halt.

 

For 10 days, most officials were diverted to help with preparations for the queen’s lying in state and funeral.

 

‘There was basically zero institutional memory left’

For Truss’s newly assembled team of political aides, it was a chance to get to know each other. The group included special advisers who had worked with Truss at the Foreign Office, and a handful from the Boris Johnson and Theresa May eras. Among others were public affairs executives and lobbyists.

 

“It would have been the perfect moment for some team bonding, but we couldn’t even go to the pub,” recalled one aide.

 

The lobbyist Mark Fullbrook was brought in as No 10 chief of staff, with Ruth Porter, a public affairs executive, designated as his deputy. Jason Stein, a former media aide to several cabinet ministers and to Prince Andrew, was bought back in as a special adviser. Adam Jones was appointed as head of political communications.

 

An overwhelming number of the senior figures brought into the administration had limited experience running a Whitehall department, let alone the country. The entire legislative affairs team – in charge of drafting and timetabling bills – was replaced too.

 

“It was like she’d stripped off all the wallpaper, then the paint and floorboards too. There was basically zero institutional memory left,” one Truss-era cabinet minister said.

 

As the mourning period for the queen wore on, Truss set about with changes behind the closed door of No 10, setting up her main office in the cabinet room and ordering a full-scale desk reorganisation in which the policy unit was evicted and moved into the Cabinet Office.

 

In the corridors of power, proximity is everything. Looking back, a No 10 source admitted the move meant there were “fewer people in-house to quality-check”.

 

Mini-budget: disaster strikes

Truss was determined to overhaul the high-tax, high-spend approach she had accused Rishi Sunak of adopting in his No 11 days. She ordered the new chancellor, Kwasi Kwarteng, to remould the economy.

 

The mini-budget was pencilled in for Friday 23 September, the final sitting day of the Commons before recess. Labour’s autumn conference would begin two days later and Truss thought the statement would “blow them out of the water”, leaving the opposition facing uncomfortable questions about whether they would support this tax cut or that.

 

 

Kwarteng’s team privately feared that the size of the statement was ballooning. At first, it was a vehicle to implement Truss’s campaign promises of reversing the planned national insurance and corporation tax rises. But new measures kept being added at Truss’s behest: investment zones, scrapping the cap on bankers’ bonuses and – most controversially – abolishing the top rate of income tax.

 

This last measure had been discussed by Truss and Kwarteng over the summer, but they had not intended to announce it so soon. Truss was keen to use the honeymoon period that she thought would be afforded to them to “go big”, but there was disbelief among Tory MPs when the details emerged.

 

Jitters had already set in because of the refusal to formally badge the announcement as a budget. This was a deliberate tactic taken by No 10 because doing so would have involved the Office for Budget Responsibility producing its own analysis and forecasts on the plans. Truss viewed the OBR as part of the “economic establishment” and had already sacked the most senior civil servant in the Treasury, Tom Scholar.

 

Kwarteng delivered the statement to the Commons in 26 mesmerising minutes. The significance of the event did not sink in straight away. Most MPs sat in shellshock. Only one Tory dared to raise a concern. Mel Stride, the Treasury select committee chair, decried the “vast void” at the centre of Kwarteng’s statement, namely the lack of OBR scrutiny.

 

Kwarteng’s team was brimming with confidence. Chris Philp, the chief secretary to the Treasury, fired out a tweet at 10.17am saying it was “great to see sterling strengthen on the back of the new UK growth plan”, with a graph showing a rise in the pound’s value against the US dollar.

 

Less than half an hour later, the pound had fallen to a 37-year low.

 

Kwarteng had expected some market backlash and still headed off that evening to the Two Chairmen pub in Westminster to celebrate. The real backlash would come two days later. In an incredibly inflammatory move, on the Sunday Kwarteng took to a BBC studio to declare: “There’s more to come.”

 

The markets duly went into a frenzy. It sparked a run on the pound and fears of sharply higher borrowing costs. Worse, it precipitated a crisis in the UK pensions industry.

 

Comparisons with Black Wednesday in 1992 and fears of a 2008-style financial crash forced the Bank of England to step in. The Bank’s governor, Andrew Bailey, complained of being blindsided by the mini-budget’s £45bn of seemingly unfunded tax cuts, prompting Threadneedle Street to buy up to £65bn of UK government bonds.

 

Truss’s initial instinct was to say nothing. She “pathologically hated backing down”, an aide recalled. But after a meeting with Kwarteng that was said to have descended into a shouting match, she agreed to the Treasury issuing a statement on Monday designed to calm the markets. It reassured the City that forecasts by the OBR would be published and there would be a further announcement in the autumn on plans to avoid debt spiralling out of control.

 

Truss went back into hiding. No 10 aides feared that the markets could “smell our nerves” and the silence only made things worse.

 

In an attempt to avoid looking like Downing Street had descended into full-scale panic, eight BBC local radio interviews were set up. “They were, objectively, a disaster,” said one of her senior team. Over the course of an hour, interviewers from the radio stations in Leeds (where she grew up), Norfolk (she is the MP for South West Norfolk), Kent, Lancashire, Nottingham, Tees Valley, Bristol and Stoke-on-Trent unleashed the pent-up anger of millions of nervous Britons.

 

She was cut down to size within minutes by the first presenter, who asked Truss bluntly: “Where’ve you been?”

 

What followed was ritual humiliation for the prime minister. The questions kept relaying fury from listeners. One asked pointedly: “Are you ashamed of what you have done?”

 

Seemingly not. “She was wounded, but that only made her more angry and defiant,” said one aide. “The belief was we just needed to explain better and harder.”

 

The U-turns begin

Truss stuck to her stance on the opening day of the Tory party conference in Birmingham, which began a few days later, on Sunday 2 October. Settling into her seat in the BBC studio for the traditional leader’s sitdown, she was determined to appear unfazed.

 

Truss brushed off the backlash to the mini-budget, saying she stood by the measures. But there was a hint of contrition. “I do accept we should have laid the ground better,” was the most she could muster.

 

Michael Gove sat opposite the prime minister, ready to savage her answers on live television. “It’s still the case that there is an inadequate realisation at the top of government of the scale of change required,” he said.

 

Nevertheless, Truss launched a charm offensive to try to woo her critics. She invited those viewed as “persuadable” up to her hotel suite aiming to win them over, succeeding with the likes of Greg Hands, a former chief secretary to the Treasury who afterwards dutifully tweeted out a defence of the mini-budget. Others, such as John Glen, were unconvinced.

 

The number of Tory MPs who were threatening to vote against the mini-budget began to mount. Jake Berry, the Conservative party chair, added to the febrile atmosphere by saying those who did so would lose the party whip.

 

With support ebbing away, Truss realised she might not have the numbers to get her plans through parliament. Such a defeat would have been treated as a vote of no confidence.

 

With the tide turning against her, Truss relented. Late on the evening of Sunday 2 October, she told Kwarteng to U-turn on the abolition of the top tax rate.

 

A planned visit and interview with Truss the following morning were scrapped and a wider malaise quickly set in. Penny Mordaunt, the leader of the Commons, declared “our comms is shit” at a late-night reception, while another minister, Conor Burns, tipped Kemi Badenoch as “the future of our party” – much to Truss’s fury.

 

Meanwhile, Grant Shapps strolled around the party conference hotel boasting about his spreadsheet containing a list of unhappy MPs and their grievances. He had felt slighted by her at the start of the leadership election, and when he was passed over for a cabinet job became one of the leading figures in the fight to remove her.

 

What started as a slight polling deficit for the Tories became a gulf. Labour’s lead soared to more than 30 points and ministers privately began putting Truss on notice.

 

The unravelling

The greater the criticism of Truss became, the more she isolated herself. Not only did the pool of allies she would speak to narrow, but others struggled to contact her to relay their concerns or offer support after her phone was hacked.

 

The incident took place during the summer leadership race but did not publicly emerge until after she had left No 10, meaning many remained in the dark about how to get hold of her.

 

Government ground to a halt (again) and the sole focus of Truss’s team turned to trying to shore up support. David Canzini, a political strategist brought in during the dying days of Johnson’s government, was drafted back to run a “war room” operation in No 10.

 

It started strongly, with Berry chairing the morning meetings in the Pillared Room and Hands brought in to handle MP relations. “But people slowly dropped out as they saw which way the wind was blowing, until the point you looked around the room and realised it was basically empty,” said one of those present.

 

Adam Jones, Truss’s political communications director, took some time off after the party conference for his wedding and honeymoon and never returned. Jason Stein stepped into his place and in an email to staff joked: “I’ll try not to break anything.”

 

By mid-October, MPs were whispering that Truss had until Christmas to turn things around. But that was about to change.

 

Fresh from a disastrous party conference, Truss arrived at committee room 14 on a dusty corridor in parliament to face a grilling from the 1922 Committee of Tory backbenchers. Every question was hostile. Mark Harper, Kevin Hollinrake, James Cartlidge – who would all become ministers in the Sunak government – were among those who voiced their concerns.

 

Robert Halfon went one step further and directly blamed Truss for trashing the Conservative party brand. The unhappiness of the parliamentary party was becoming increasingly stark, emboldening MPs to think the unthinkable: that they might be about to defenestrate a second prime minister in just over a month.

 

Meanwhile, Kwarteng faced an awkward showdown of his own in Washington. He had flown out for an annual gathering hosted by International Monetary Fund after it issued a stern slapdown of the mini-budget. Though he attended some talks, he was scrambled home a day early, boarding an overnight flight.

 

No one believed the official explanation from the Treasury that it was to work on the upcoming medium-term fiscal plan. News of his imminent sacking leaked and Kwarteng found out via Twitter as he was being driven to Downing Street to be told the news personally.

 

The conversation with Truss was short. She told him he was being sacked, and Kwarteng cooly replied that he already knew.

 

When Kwarteng exited the cabinet room, an observer remarked his shirt was hanging out at the back: “It literally looked like he was leaving with his tail was between his legs.”

 

Jeremy Hunt was asked to take the job. Normally affable, on this occasion he was solemn – he requested that no pictures of him smiling be released by in-house government photographers. Hunt was now running the show, and Truss’s supporters felt the entire policy platform on which she had entered No 10 was about to be ripped to shreds.

 

Truss made one last effort to steady the ship, calling a press conference that afternoon. It lasted less than nine minutes but had been intended to go on much longer. She announced a second U-turn, that the planned national insurance rise she had vowed to cancel would go ahead.

 

While Truss said she was “absolutely determined” to stay in post, insiders said this was the moment she knew her time in No 10 was up. After taking just three questions, Truss hurried off stage – to shouts of “aren’t you going to apologise?” from the remaining reporters.

 

The final week

Truss’s premiership had become a tinderbox. There was no need for ministerial resignations or no-confidence letters – the sense of inevitability that she could survive for only a few more days was overwhelming.

 

Truss became ever less involved. She dodged an urgent question in parliament on recent economic turmoil and was mocked when Mordaunt, who stepped in to answer on her behalf, insisted Truss was not hiding “under a desk”.

 

Critics began speculating who would last longer – the prime minister, or a lettuce. In an effort to stay out of the fray, Truss delegated decisions to her most ardent supporter, Coffey.

 

Wednesday 19 October started worse than terribly. A gruelling prime minister’s questions left uncomfortable grimaces on the faces of the Tory MPs behind Truss.

 

Amid the uncertainty, another, almost forgotten scandal: Suella Braverman, the home secretary, was forced out for breaching the ministerial code by sending an official document from her personal email to a fellow MP.

 

But the most bizarre twist of events was yet to come. That afternoon, Labour tabled a craftily worded motion. It would have guaranteed parliamentary time for a bill to ban fracking. The business secretary, Jacob Rees-Mogg, was in favour of reviving the controversial drilling practice but many Tory MPs were not. To avoid a mass revolt, the chief whip, Wendy Morton, determined that it would be treated as a confidence vote – meaning anyone who defied the whip would face ejection from the parliamentary party.

 

Towards the end of the debate, communications broke down. On the floor of the Commons, with less than 10 minutes until the division bells started ringing, the energy minister, Graham Stuart, announced that the confidence vote had been called off. Mayhem broke out. Coffey was accused of manhandling a Tory MP to force them to vote with the government, while Morton and her deputy, Craig Whittaker, felt so undermined that they tried to resign on the spot.

 

Both were dissuaded from doing so in the hours that followed, but it was clear their authority had vanished – and that Truss had lost control of the government and her party.

 

‘That’s when I thought she’s totally lost it’

Immediately after that mess had unfurled in parliament, half the parliamentary party drifted across to a reception to mark the 100th anniversary of the Carlton Club. Swilling champagne at the private members’ club situated on the edge of Mayfair, each peered at their phones for updates on the government’s imminent collapse.

 

Gallows humour started to percolate through the room. Hunt and the foreign secretary, James Cleverly, gave speeches from the grand central staircase, alluding to the chaos. Mingling in the crowd were members of the 1922 Committee executive – the so-called men in grey suits whose job it was to tell Truss she could go quietly or be pushed. “You had the assassins and the about-to-be-assassinated milling around in black tie – it was like a game a Cluedo,” said one of those who was present.

 

Those who had been leading the campaign to oust Truss knew the moment had arrived. One told Graham Brady, the chair of the 1922 Committee, that there were now enough no-confidence letters from colleagues poised to be submitted to trigger a no-confidence vote. And so on Thursday morning, Brady traipsed across to No 10 to tell Truss she had lost the support of the parliamentary party.

 

Truss decided not to fight on and summoned her aides to the cabinet room. “There was no round of applause or tears, just an emotionless and exhausted room of people,” recalled one of those present.

 

In the days before she formally stepped down, Truss held farewell parties for her supporters at the prime ministerial grace-and-favour mansion of Chequers. Even then, she defended everything she had sought to achieve, saying she had “the right policies at the wrong time”.

 

“That’s when I thought ‘she’s totally lost it’,” said a former aide.

 

One year on from Truss taking office aiming to remould the economy, interest rates and mortgage costs have risen, inflation is uncomfortably high and growth, meanwhile is practically nonexistent.

 

Her successor, Sunak, is still struggling to draw a line under what some Tory MPs call the “Trusterfuck” that they believe will cost them their seats and the party its majority at the next election.