Night of hasty reversal: how Truss and Kwarteng dropped their tax cut | Conservative Conference 2022

ONELiz Truss was waiting to take to the stage at an event for northern MPs on the drinks circuit at the Conservative party conference on Sunday night, and was enthusiastically introduced as the ‘tax-cutting prime minister’ by the party chairman, Jake Berry.

Just over half an hour later, the Prime Minister presented her tax philosophy to the party faithful at a drinks party on the 25th floor of the luxury Cube building in Birmingham. “Honestly, we haven’t made enough conservative arguments in recent years,” he told them.

Tory members threw back glasses of champagne and some compared her to Margaret Thatcher for doubling down so hard on her plan to cut the top rate of tax to 45p. Just over 12 hours earlier, Truss had insisted to the BBC’s Laura Kunsberg that she was in her place, prompting Michael Gove to make his criticism public.

Shortly after the prime minister’s televised appearance, Kwasi Kwarteng’s team sent a preview of his conference speech in which he was to say: “We must stay the course. I am confident that our plan is the right one.”

But behind the scenes, talks of a possible reversal were already underway. As early as Friday, Truss and her No 10 team were calling Tory MPs. He spoke to a former cabinet minister just as there were voters knocking on the door. “I told her I had just been told how unfair it was that we were protecting the rich while my constituent was worrying about paying his mortgage.”

Some MPs suspected something was up when Tory whips failed to make their normal weekend round to test mood. “It seemed odd, especially after such a tumultuous week,” said one. “But it also meant they didn’t know if they had the numbers to get the policy through the Commons.”

Kwarteng, the chancellor, has also had calls, including on Saturday with former transport secretary Grant Shapps, known for his spreadsheet that keeps track of MPs’ views. “It was clear they weren’t going to get over it,” said Shapps, who the next day joined Gove in the rebellion.

Downing Street insiders said Truss and her chancellor were in regular contact over the weekend, with calls increasing on Sunday as it became clear the rebellion was growing. In the early afternoon, when Kwarteng briefly attended a business dinner, guests said his position was a “far cry” from Truss’s on TV earlier. “Kwasi was a lot less confident about 45p than before,” said one.

He then had a quick dinner with senior Sun journalists at the Malmaison Hotel before being whisked back to the conference zone, where at 10pm. joined Truss and their closest aides in her suite at the Hyatt Hotel in Birmingham.

The mood was said to be somber as the pair compared notes on their talks with Tory MPs. They agreed to meet again after the prime minister’s drinks at the Cube and reconvened around 11pm just as the damaging headlines about the Tory mutiny began to fall. They knew what they had to do: reject the policy immediately. It was agreed that the chancellor would kill it in his morning interviews.

News of the decision began to filter in shortly after, with late-night revelers in the Hyatt bar letting out small squeals as they pointed their phones at each other, and one minister was seen rolling his eyes.

Downing Street aides were forced to work into the early hours to prepare for the 7am announcement, although several Treasury officials admitted the first they heard of the reversal was when they woke up in the morning and saw the news.

The Chief Secretary to the Treasury, Chris Philp, was briefed and, while unhappy to be accused of being the face behind the policy, was described by one source as a “Duracell bunny” for his performance in the morning round.

Cabinet ministers – who had been frozen out of the original policy decision – were informed of the reversal minutes before Kwarteng posted a tweet saying “we understand and have heard” at 7.30am. of Monday. Several said they believed it was the right decision. “I think we’ve come into contact with the inevitable,” said one.

The chancellor blocked when asked on BBC Breakfast, LBC Radio and then the Today program who had made the final decision. First, he said Truss had “decided not to go ahead with the repeal” before, moments later, adding: “No, we talked together, I said that’s what I intended to do and we decided together.”

But many Tory MPs fear that whoever made the final decision came too late. “The damage is already done,” said one. “We will always be the party that tried to cut taxes for the rich at the expense of the poor. It’s a long time until the next election, but this will remain.”

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