For more moderate Tories, the last few days have been the best politically since 2015. Despite being a Brexiteer who has planted himself on the Party’s Right on issues such as immigration, Sunak is about as good as it gets!

Grounds for optimism...?

Truss’s ‘libertarian’ premiership hit a brick wall with significant collateral damage whilst the unedifying attempted return of Johnson ended in humiliation. His cringe worthy statement saying he could have been PM again but, for unity reasons in parliament decided to pull back, was breath taking in its hubris. This really should be it for him.

Never mind. Sunak is PM now and not a moment too soon. To be certain of closing the deal he has had to compromise on ministerial appointments, and it will work for now but probably not for long.

The most notable appointment was Suella Braverman as Home Secretary. Having just resigned a few days ago for sending confidential material from a personal email address, she is back in the same post. The price for her support in the leadership race. Understandable but the cost may be too great in the medium-term. The only saving grace is that if she storms off to the back benches again that will be it for her too!

Otherwise, a more continuity Cabinet than one might have guessed. Hunt is probably not Sunak’s choice for Chancellor. He is his own man and notably, for example, only gave Braverman’s appointment tepid support but ‘he will do for now’ in the midst of an economic crisis. They are sufficiently agreed on what needs to be done and should, will have to work closely together. Maintaining the likes of Cleverly, Coffey and Wallace as Truss/Johnson supporters is just good politics, whilst the return of loyalists such as Raab and Gove makes sense too.

The danger for Sunak is that continuity today may not impress the electorate tomorrow. Same old, same old Tories voters might think. In fact, there is some evidence to suggest they have now tuned out like they did in 1992/93 and nothing can rescue the Tories’ electoral prospects from here.

What is certain is that Sunak will have to stamp his authority on the Cabinet with another reshuffle closer to the General Election. Tensions are running high and if Sunak actually governs as a moderate, that reshuffle may be sooner than expected.

Sunak’s compromises work for now, but the Tories’ addiction to further political drama may be hard to cure…

At the start of the week, it was an easy prediction to make. Liz Truss would be gone in weeks, possibly days. After the chaos of the vote on fracking on Wednesday, it was the latter. A wholly self-inflicted disaster, it is difficult to feel much sympathy for Truss or indeed the Tories as a whole for putting her in the position of PM in the first place.

And now, incredibly, we have a strong possibility of the resurrection of Boris Johnson. Political soap opera at its worst.

Tory Party continues to shrink in esteem…

Let’s just remind ourselves of Johnson’s past reign and why he had to resign. Caught regularly lying on a range of issues, covid parties, taking ‘corrupt’ money for decorating his Downing Street flat, losing ethics advisers, 60 ministers resigning at his behaviour forcing Johnson to quit. The list is endless and that is before his fundamental administrative chaos.

And think what happens if he wins the leadership a second time around? Does Hunt stay around as Chancellor? There is no love lost between them, and Johnson is a profligate spender who privately backed Truss. The talented Sunak will probably leave politics. The Right will remain in the ascendant. Relations with our largest trading partner, Europe, will continue to deteriorate. Several Tory MPs are threatening to quit forcing by-elections.

More chaos as the electorate recoil at another, this time discredited former PM, foisted on the country a second time by a tiny minority of Tory members. Johnson’s one saving grace is that he did have an original mandate from the 2019 GE but when he left office, 69% of the public and a majority of Tory voters wanted him gone.

Of course, Johnson is not Truss and that in itself might lead to a slight recovery in the polls. However, the longer-term answer is some thing like Sunak for PM, Hunt staying on in his role as Chancellor and Penny Mordaunt being made Foreign Secretary. It is not whether but only the scale of Tory electoral defeat being debated at the next GE and Johnson is no solution versus more talented colleagues who can rebuild the Party afterwards.

Common sense should prevail, and Johnson left on the backbenches to rack up millions in speaker fees. Meanwhile Prime Minister Sunak and Chancellor Hunt claw some reputation back for the Tories on the economy.

The problem is what do the Tories most lack collectively? Common sense. It could be a very depressing time for moderate voters as today’s Tory Party is lost to them.

To the almost certain horror of the hard-right, libertarian wing of the Conservative Party, moderates have taken back control. The grown-ups are back in charge for now and the sense of relief is palpable.

Liz Truss’s 38 day experiment comprising unfunded tax cuts and libertarian factionalism prolonged only by the death of the Queen, is over. Truss is a busted flush. Her agenda has gone. This morning, incredibly, Jeremy Hunt reversed nearly all aspects of the mini budget. She now offers nothing, not even able communication skills, and will be gone within weeks, possibly even days.

Jeremy Hunt takes charge…

The beneficiaries? Jeremy Hunt, Rishi Sunak, Penny Mordaunt. Putting Brexit to one side, they are moderates, representing the centre/centre-left of the Party. Believers in sound finances, social liberalism, competent government, any one of them would govern by making appointments from all sides of the Party based on merit.

It is time for the Conservative Party to stop divisively thinking of politics in terms of North versus South, blue versus red walls, establishment versus radicals, experts versus who? It is time for competence over ideology and country before Party.

So far, so good but there are still two very large threats facing the Tories. One potentially self-inflicted, one outside their control.

Taking the first, it is still the same underlying Party as it was, with much of its membership very right-wing, and unpleasant ideologues lurking in the wings. Members were seemingly happy with the chaos which came before Truss under Johnson. And they voted in Truss despite all the warning signs. If, in an inevitable change of leader, another election contest is held (that in itself would finish the Tories) with the drift to the Right reconfirmed or heaven forbid, there is a re-coronation of Johnson, then it is game over. No moderate will want anything to do with them. The Party would finally split and lose the next General Election very, very heavily indeed.

Second, it is probably too late for the Tories, anyway. The public is heartedly sick of their pantomime approach to government. Their arrogance, sense of entitlement, treating government as one big experiment. It has caused real damage to the fabric of society, the institutions they are meant to revere, to international relations.

However dull Starmer is and to whatever extent some extremes still lurk in corners of the Labour Party, it is time for a change. For the health of democracy. For the health of the Tory Party.

Activities in the main hall of the annual Conservative Party conference are the least interesting part. Set speeches from ministers to an often sleepy audience which appreciates slogans rather than anything more in-depth, are best avoided. Outside the weird bubble of such gatherings, they barely register with the public.

Not to everyone’s taste…

Which takes this blog to Liz Truss’s speech in Birmingham last week… The Prime Minister is a weak communicator at the best of times which is a real problem in the worst of times. To be fair, in the face of a disastrous conference, Wednesday’s speech was relatively well delivered but it wouldn’t be to a thinking person’s taste. Best ignored.

Why the obsession with growth? Simple in concept, it is not an end in itself. Politicians who do not (or pretend to not) understand economics see it as nirvana. Nonsense.

It avoids the more subtle concept of low productivity, the curse of the UK’s economy. It ignores a green agenda and immediate quality of life issues. It ignores how wealth is distributed except for the weak tinkling from trickle down economics. It ignores how to achieve it with sound public finances.

And then we turn to the ‘anti-growth coalition’. All the Tory Party’s prejudices inaccurately grouped under one slogan. Even for a party conference, Truss should be ashamed of herself for such cheap jibes.

This week we have had more U-turns. After reversing the abolition of the 45% tax band mid-conference, the date for outlining the government’s financial plans has been brought forward by nearly a month; despite denigrating such expertise we have the appointment of an experienced treasury hand as Permanent Secretary and almost certainly welfare benefits will be indexed to inflation rather than earnings despite initial briefings otherwise. Meanwhile, gilt yields tick up reflecting a continuing lack of confidence in the government’s stewardship of the economy.

If you play strong, you had better be strong. Increasingly, the public’s view of the Truss government is they don’t like its priorities or now its weaknesses and, specifically, if you can’t trust the Conservatives with the economy, what’s the point?

The Labour opinion poll lead is massive and few Tory MPs believe it will be reversed. Truss’s legacy after just a few weeks in power. Quite a feat.

I’m currently on a business trip to the United States expecting to write about US politics. But, relatively speaking, little is happening here compared to the chaos unfolding in the UK. Biden’s stock is slowly rising, albeit from a very low base, and Trump is increasingly discredited. All but his most loyal fanatics are tiring of the Trump drama. Politics is no less polarised and the lead players may well change but, except for hurricanes of the weather sort, the news agenda is fairly quiet.

Meanwhile, from here, the UK looks like a horror show and in meetings with US asset managers, there is real puzzlement with the actions of the Truss government. It seems in freefall as the consequences of reckless tax cuts come home to roost through violent market reactions.

They discuss whether politics over the pond are those of an Emerging Market which is where the UK is going to end up if we carry on like this. In an investment category with the likes of South America, Eastern Europe et al…

Mainstream views from investment professionals are that our economic woes are entirely self-inflicted, starting with Brexit and now multiplying through the actions of an increasingly ideological, some might say out of control Tory administration. Regardless of this blog’s well documented views on unTory behaviour, I am simply relating what I am hearing.

Here in the US, they don’t know Starmer but they do know Johnson and now Truss. Oh dear…they are not impressed.

And when you hear Truss might be replaced by Johnson or the recently defeated, but seemingly very wise Rishi Sunak, the sense of chaos grows. We should be ashamed at the current state of UK politics which is getting too much attention even by this famously inward-looking ally.

The best comment I have recently read on Twitter came from a parent who said whilst it was impressive Queen Elizabeth had overseen 15 PMs, his six year old daughter had seen four. Incredibly, that may rise to five before his daughter makes seven…

Meanwhile, my US trip is now increasingly and achingly expensive…

You have to give it to the new PM. She has flown out of the traps with a massive intervention in energy markets and huge tax cuts.

Moving fast…

The ideological divide has never been clearer. Tories cut taxes to drive growth, aiming to shrink the State. Labour raise taxes selectively to sort the cost of living crisis with no desire to shrink anything. The ‘shopping trolley’ days of the Johnson regime are over.

The challenge for Truss is twofold. First, the Tories have been in power for 12 years and there must be a limit to how often they can reinvent themselves. Second, it is a massive £105 billion gamble with the public finances.

And the verdict from objective markets? Interest rate and inflation expectations have been revised upwards, stocks have fallen, and Sterling is at a 40 year low, heading to parity against the US dollar.

Johnson was unTory in all sorts of ways as this blog has written about many times, but this mini (more like max!) budget is, if anything, more unTory. Debt will soar and the cost of servicing it in the face of rising interest rates will soar faster. Sound finances were always at the heart of Tory administrations but not now with these unfunded tax cuts. Rishi Sunak must be turning in his political grave…

The hope is that the stimulus will rejuvenate the economy in time for the next election and any negative consequences from these new policies can be parked until after then. Truss will have to be incredibly fortunate for this to happen at the very least in terms of timing.

Labour’s response to Kwasi Kwarteng’s statement by the Shadow Chancellor, Rachel Reeves, impressed and she looks and sounds like a future leader. Of course, the ideological divide may work in the Tories’ favour but if Labour can’t win next time round, surely we are heading towards a One Party State. Now that’s a thought…

I have a confession…. One of my roles as a Tory parliamentary assessor back in the days of Cameron was to help ensure more women candidates were selected. I came across an email exchange in 2008 with one Liz Truss, providing coaching advice to help her selection chances. She was picked to fight a safe Tory seat in Norfolk shortly afterwards. The rest is history as they say. Only time will tell whether I should have kept this to myself…

So, as expected, Liz Truss is the new PM but by a smaller majority than many forecast. And what a mountain she now has to climb as she faces energy, inflation and NHS crises.

Expectations are so low there is little downside…

It will be tough. She starts with only 57% support from Tory members (47% if you include those who didn’t vote), 32% of MPs (15% at the start of the contest) and a 12% approval rating from general voters according to some polls.

Truss’s self-belief is apparently legendary according to colleagues. It will need to be.

And that self-belief has already showed itself with a bold start. A partisan Cabinet of allies and a move to the Right with tax cuts combined with huge amounts of new borrowing and continuing culture wars. One Cabinet minister particularly makes you shudder. Suella Braverman as Home Secretary. Really? Likely to be highly aggressive on immigration, the EU and careless with judicial independence. She will have liberals and the Left foaming at the mouth. Perhaps that is the point.

So the Opposition has all to play for. With the scale of crises engulfing the country, Truss hasn’t got long to prove herself and many of all persuasions think she will fail. One misstep and it is game over.

But therein lies the trap. Big policy announcements, some borrowed ideas from opponents, might just surprise massively low voter expectations on the upside. Constant, urgent activity from a government simply doing things might impress.

On balance, Truss will probably fail because her Government lacks the necessary communication skills from the top, is too right-wing and partisan, managing to upset voters in the North and South for different reasons in the process.

But if I were Starmer or even Ed Davey of the LibDems I would articulate a clear alternative quickly and keep my guard up.

Just back from holiday in France and the French are as perplexed as I am. They cannot understand a seeming meltdown in the UK and that’s not just about the heatwave. Despite France’s own troubles, a UK government gone AWOL, a cost of living crisis, record inflation, 15 hour waits for an ambulance and still rowing about Brexit is starting to make them feel fortunate compared to our good selves. It probably won’t last but current challenges over here do appear somewhat self-inflicted…

And back in the UK, one reads in The Times that Tory voters have had a change of mind about Johnson and now want him back in the face of a Sunak or Truss premiership. Oh, the fickleness of the electorate! Only a few weeks ago a majority wanted him to go, a view supported by some 60 ministerial resignations. But apparently 49% of Tory supporters now want Johnson to stay, more than the combined support for the current contenders.

Apparently, a plague on both their houses…

The real problem of course lies in the lack of credibility at the heart of the leadership campaign. Again, according to The Times, 40% of voters who chose the Tories in 2019 said the contest had made them think worse of the Conservative Party whilst under a quarter were convinced of the candidates’ plans to tackle the cost of living crisis. Truss offers a tax cutting splurge immediately whilst Sunak advocates sound money and then offers tax cuts of one sort or the other now and in the future. Few are convinced as they vie for the attention of a wholly unrepresentative Tory membership.

And the aggression! Sunak is going for broke in tearing apart Truss’s economic plans. One can only think he plans to leave politics if he loses or believes Truss’s government will implode very shortly and he will be there to pick up the pieces saying, ‘I told you so’.

This is all fodder for Labour. One can only imagine the soundbites they are collecting for the next general election campaign. However, with a 15% opinion poll lead, it is theirs to lose and the gap in popularity has really only been built by the Tories destroying each other. Few understand what Starmer and his colleagues really stand for.

Today, it feels like a clear Truss victory, a brief Tory opinion poll recovery and then possibly mayhem. In the meantime, the country faces huge challenges as yet unaddressed. The outlook for the Autumn is stormy. Bring back the heatwave…

The Leadership contest to date has been unedifying. Rishi Sunak and Liz Truss running an almost scorched earth policy as they critique each other’s policy offerings. Neither may get a role in each other’s Cabinet, least of all Sunak who will probably leave politics if he loses or at least take a back seat.

Who is the real Thatcherite and does it matter?

It makes you wonder what the Tory Government has been doing for the past 12 years to face such internal criticism and why such an improvement of approach is needed? Sunak has participated in a Johnson Cabinet with all its populism and lack of integrity for nearly three years. Truss longer, and whilst she has less problem with Johnson, has trashed her government’s economic policies.

The main divide is economics but a crucial, more subtle one, is culture. We will come back to that later. But in terms of tax and spend, each candidate claims to be an heir to Thatcher. Really? One doubts Thatcher, for all her loathing of the EU, would have actually taken the economic risk of leaving it, and she always stood for sound money, raising taxes in her early years to protect the nation’s finances.

Both now believe in Brexit, but Liz Truss also supports £30 billion of unfunded tax cuts to drive growth. There is no evidence this would work. Conventional wisdom suggests it will drive up inflation and interest rates, negating any benefits such extra expenditure might bring. But apparently conventional wisdom is now confined to ‘Group or Treasury think’. Sunak, a more conventional Tory, wants inflation down before tax cuts and places himself as careful with the nation’s finances. Now that is more Thatcherite!

The problem for Sunak is that the Tory membership is not listening. One suspects they find him too slick, too rich and ultimately a Johnson knifer. His performance in the BBC debate on Monday was uncharacteristically aggressive, the impression being he feels he has nothing to lose. Truss, on the other hand, is going for growth come what may. She wants those tax cuts, a 20% reduction in crime (how?), Rwanda, the destruction of the Northern Ireland Protocol and a more aggressive approach to the EU generally. All this tunes in culturally with the narrow voting audience she is aiming for. In addition, one only needs to look at mooted Cabinet picks generally to know Sunak is a centrist Tory whilst Truss, playing to the Right, will continue fighting Johnson’s culture wars whether deep down she believes in them or not.

Truss is likely to win and the Tories will march further to the Right into unchartered waters under her leadership, vacating what little of the centre-right ground they might once have held. The problem for the next General Election (unlikely to be before July 2023 boundary changes which theoretically give the Tories a further 13 seats) is that Truss is no Johnsonian communicator and starts with only 32% of her colleagues supporting her. Her approach to governing may not hold enough Red Wall seats and will almost certainly lose her more seats in the South. The Labour and LibDem leaders are consequently very happy…

The only way Truss’s march on No.10 may get interrupted is if there is a ‘blow-up’ during the campaign. Intriguingly, the electorate of Tory members are allowed to change their postal vote on-line later in the contest if they wish to. Someone is hedging their bets somewhere…

All this is a reminder that Party members of all persuasions are generally not at their wisest in choosing their leaders. Surely, for the Tories, when in office, only MPs should pick who should be Prime Minister leaving a wider vote for those relatively rare periods of Opposition. The public, today, is entitled to feel disenfranchised by a Tory membership which sometimes isn’t in tune even with Tory voters.

The Conservative Party’s summer is likely to be long, hot and unpleasant. Time to leave the country and go on holiday. An EU country seems a suitable destination…

Happy August!