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!

This has been an excruciating two weeks for Tory sympathisers. They have watched agog as candidates ripped each other apart in the race to be their Party’s next leader, most noticeably in the TV debates.

And now, as the process wends its way to the judgement of Conservative Party members, there is a somewhat unedifying choice between the last two candidates standing: Rishi Sunak verus Liz Truss.

Hobson’s choice…?

The most qualified and able by far is Rishi Sunak. He rose to the job of Chancellor in the most challenging of circumstances and acquitted himself well. The problem he has is that in pursuing the perfectly legitimate objective of controlled budget deficits, he has increased taxes to a 70 year high which is not going down well with voters generally or Tory members in particular. He has attacked Truss, his final opponent, for her fantasy approach to economics. She has, in return, attacked him for these tax rises. Both have created much fodder for Labour which was painfully evident in PMQs this afternoon. Keir Starmer, its leader, had a field day.

The additional challenge Sunak has is that he is a rich Thatcherite (incredibly painted as ‘left-wing’ by Truss supporters) with a slightly questionable family tax history. I am just not sure this will play well in Red Wall seats and, again, provides much ammunition to those on the opposition benches.

Then to Liz Truss. She is widely considered awful by many of her colleagues, more than two-thirds of which didn’t vote for her. I have experienced the most diplomatic of senior Tories holding their heads in their hands when her name is mentioned. No credible record as a minister who, as a former Remainer, has styled herself as tough on the EU to reach the last two of this contest. She has advocated breaking international law over the Northern Ireland Protocol and relations with our largest trading partner would almost certainly deteriorate if she were to be elected. She has acquired some distinctly unpleasant right-wing supporters on her journey, is economically illiterate and would quickly lose credibility as PM. Oh dear.

The person eliminated today is Penny Mordaunt. She ran a weak campaign with little substance, but one senses she would have picked a solid team behind her. A moderate Brexiteer and social liberal, depressingly savaged by the Daily Mail, she would have provided a better choice against Sunak.

Well, the Tory Party is where it is. Presenting a Hobson’s choice to many, three things strike me as obvious; it has to be Sunak as leader (he has a good chance despite Tory members favouring Truss today); the election is surely not going to be held until 2024 in the hope that voters forget the happenings of this summer and Labour’s chances of winning the next election have improved immeasurably.

Actually, not much has changed. Sunak (101 votes, increase of 13) leads, followed by Mordaunt (83 votes, increase of 16). Truss third (64 votes, increase of 14) which must be a little disappointing. Kemi Badenoch fourth (49 votes, increase of 9) has done well but there may be some skullduggery here. Gove is supporting her! Tugendhat fourth (32 votes, decrease of 5) which is certainly disappointing. Finally, a sigh of relief all round, Suella Braverman has been eliminated (27 votes, decrease of 5).

The Famous Five…

No clear result in sight as we move to the television debates, beginning Friday (probably four of them), but the momentum today still resides with Mordaunt who is scoring well amongst Tory members. Mordaunt is, as yet, untested but you can tell she is perceived as a threat. The attacks on her are rising.

Sunak toured the studios today and sounded a little slick and evasive. Justin Webb on the Today programme was having none of it and roughed him up somewhat. Rumours that Gavin Williamson is lending the ex-Chancellor’s campaign his dark arts also doesn’t help. You have to ask what is Williamson for in politics? Sunak will have to up his game.

As for the others, Truss is still in the race. Badenoch and Tugendhat looking for profile and promotions in the next Cabinet.

Starmer et al should be putting the work in to maximise the damage being done to the Tories’ reputation from this leadership contest otherwise a crucial opportunity will be lost. Meanwhile, the poor voting public look on with a mixture of disgust, boredom, indifference but just… just occasionally… fascination.

We will all know who the last two candidates are by next Thursday. Phew!

So still all to play for but Penny Mordaunt is the one to beat and presents the trickiest challenge for Keir Starmer.

Jeremy Hunt (18 votes) and Sajid Javid (eliminated earlier) have paid the price for dullness. Nadim Zahawi (25 votes) has paid the price for missteps in becoming Chancellor and then calling for Johnson to stand down. His tax arrangements also look curious, and the Tories don’t want to go there. They have all gone. You need to get 30 votes to reach tomorrow’s next round of voting.

All change at the top…

On the Right of a Party which has already drifted further to the right, Truss (50 votes) did less well than expected and it is more difficult today to see her in the last two to be voted on by the membership. Incredibly the controversial Suella Braverman (32 votes) is still just in the race, but her time must be up.

On the Left, Tom Tugendhat (37 votes) did respectably but his time looks to be up too. He deserves a key post in the next Cabinet.

Kemi Badenoch (40 votes) performed strongly. What she represents is uncertain, but her time will come again.

That leaves Rishi Sunak (88 votes). He leads but not by enough. Would voters warm to a rich, avowed Thatcherite after years of austerity and a cost-of-living crisis? Also, with tax issues. Umm… I think he would be Starmer’s choice…He also has many enemies in the Johnson camp.

So, today, it seems like Sunak versus Mordaunt, incredibly with the momentum behind Mordaunt. Read this quickly. It could all change tomorrow and this snap analysis only has a shelf life of 24 hours!