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Truss warns Tories not to retreat to ‘status quo’ after market collapse

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Liz Truss sounded defiant today, kicking off the Tory conference and warning unruly MPs not to retreat to the ‘status quo’ after the market collapse.

The prime minister launches the meeting in Birmingham against the backdrop of the pound’s plunge and a rise in borrowing costs following the tax cut in Kwasi Kwarteng’s emergency budget.

The chancellor has suggested that “in hindsight” he might have done things differently, with the lack of independent OBR fees and a debt management plan that deter traders.

But Ms Truss insisted there is no prospect of firing Mr Kwarteng, urging Conservatives to back her leadership, saying “the status quo is not an option”.

As part of the reforms, the definition of a small business will be increased from 250 employees to 500, cutting red tape for tens of thousands of businesses. The government also wants to copy a French model to stimulate childcare.

The grim political ramifications of the market turmoil for the Tories were exposed in a poll that put Labor at 46 percent, 19 points ahead and enough for a landslide election victory. Others have shown Keir Starmer’s game with an advantage of up to 33 points.

Liz Truss launches meeting in Birmingham against backdrop of pound plunge and rise in borrowing costs following Kwasi Kwarteng's emergency budget tax cut

Liz Truss launches meeting in Birmingham against backdrop of pound plunge and rise in borrowing costs following Kwasi Kwarteng’s emergency budget tax cut

The grim political ramifications of the market turmoil for the Tories were exposed with a poll that put Labor at 46 percent, 19 points ahead

The grim political ramifications of the market turmoil for the Tories were exposed with a poll that put Labor at 46 percent, 19 points ahead

The grim political ramifications of the market turmoil for the Tories were exposed with a poll that put Labor at 46 percent, 19 points ahead

It follows a tumultuous week in which the pound plunged to record levels against the dollar and the Bank of England stepped in to prevent the collapse of the pension sector in the wake of Kwarteng’s package of unfunded £45 billion tax cuts from the government. Mr. Quarteng.

While some Tory MPs speculated she might not last until the end of the year, Sir Keir Starmer sought to address discontent in the Conservative ranks and urged the rebels to work with Labor to government’s tax plans in the House of Commons.

But in an interview with The Sunday Telegraph, the prime minister said that although the budget was drawn up in a ‘rush’, she stuck to her butt and that tax cuts are essential to get the economy growing again.

“Change is always something people can worry about. But what I’m essentially saying is that we need to change, and the status quo is not an option,” she said.

“We can’t continue on the current trajectory of controlled decline… We need to move in a new direction.”

Mr. Kwarteng admitted that he was surprised by the reaction of the financial markets to his mini-budget.

He told The Mail on Sunday that it had been put together “very quickly” due to the need to support people with their energy bills, but that he was “100 percent convinced” it was the right plan.

“It’s very hard to actually anticipate how markets will react to something and if politicians were really good at reading markets I would think they would probably be market traders,” he said.

“I think we’re seeing more stability now and I’m hopeful we can build on that.”

Ms Truss announced that the first of the government’s supply-side reforms designed to support the growth plan will extend the small business exemption from companies with up to 250 employees to companies with up to 500.

She said the change would free an additional 40,000 companies from red tape and make it “easier for them to carry on with their business.”

She is also working on the creation of new ‘childcare agencies’ in a French system to reduce the cost of childcare.

But there are persistent reports of letters to the Conservative 1922 Committee chairman, Sir Graham Brady, from Tory MPs calling for a vote of no confidence in her.

While under current rules she is protected from a leadership challenge a year after her election, the 1922 director has the power to change those rules if competition demand becomes overwhelming.

Former Cabinet Minister Michael Gove appears to join the critique as he appears on the fringes of the conference this afternoon.

Kwasi Kwarteng told The Mail on Sunday that the budget had been put together “very quickly” due to the need to support people with their energy bills, but that he was “100 percent convinced” that it was the right plan.

Mrs Truss was all smiles when she arrived in Birmingham for the Tory conference last night

Mrs Truss was all smiles when she arrived in Birmingham for the Tory conference last night

Mrs Truss was all smiles when she arrived in Birmingham for the Tory conference last night

A number of other prominent figures – including defeated rival Mrs Truss, Rishi Sunak and former ministers Priti Patel, Sajid Javid and David Davis – are staying out of the conference.

South Suffolk MP James Cartlidge has joined the attack, warning that cutting benefits and cutting taxes for top earners in a cost of living crisis was ‘unacceptable’.

This doesn’t mean that after we lose market support for proposed unfunded tax measures, we’re trying to regain that support with on-the-back-foot, un-pitch-rolled cuts to benefits when the cost of food and staples skyrocket, while maintaining a tax cut for the richest,” he tweeted.

But former Secretary of State Jeremy Hunt, who supported Rishi Sunak for the leadership, said Ms Truss must be given a fair chance to make her plan work.

“It was clearly a very shaky week. But we have to let things sink in. And I think that will be the time to make a judgment,” he told GB News.