BIRMINGHAM, England—U.K. Prime Minister Liz Truss, after a turbulent first month in power, tried to recover the confidence of both the public and her own party on Wednesday by defending her controversial plans for tax cuts as the best path to stir a slumbering British economy.
Speaking to her restive Conservative Party at the close of its annual conference, Ms. Truss called on party members to unite to attack “antigrowth” political opponents and back her agenda of lower taxes and deregulation.
“Whenever there is change there is disruption,” she said. “Not everyone will be in favor. But everyone will benefit.”
The speech capped a turbulent four-day conference that has seen senior lawmakers openly defy the new prime minister and the chancellor of the exchequer, forcing them to scrap a marquee plan to cut the 45% top tax rate, part of a broader set of tax cuts that sparked a week of turmoil on U.K. financial markets and hit Ms. Truss’ standing with her party and the public.
Ms. Truss has been prime minister for under a month, having taken over for her ousted predecessor Boris Johnson, but already her authority is being challenged within her own party and her poll numbers have crumpled. Her tax cut plan has also galvanized the opposition Labour Party, which had its own annual conference recently.
On Wednesday pollster YouGov said just 14% of the British public have a favorable opinion of Ms. Truss, according to a survey taken Oct. 1-2, down from 26% favorability on Sept. 21-22. The numbers make her even less popular than Mr. Johnson was after a series of scandals caused the Conservatives to push him out of power and hold a new leadership contest.
The poll also showed that support from Conservative voters in the 2019 election had cratered, with 60% of those voters having an unfavorable view of the new prime minister.
Things are unlikely to get much better in coming months given a looming economic recession as well as rising inflation and interest rates. In a sign of the challenges, many of the people at the Conservative conference had already returned home before Wednesday when the nation was hit by wide scale train strikes demanding higher wages. Meanwhile environmental protesters disrupted the speech to hold up a banner with the words “Who voted for this?”
In her speech, Ms. Truss laid out her back story, growing up in Northern England and the discrimination she felt as a woman, while expanding on her vision for a smaller government. She argued that the economy must expand to fund better public services and that strong Western economies were vital in the face of emboldened authoritarian regimes like Russia and China.
“When the government plays too big a role, people feel smaller,” she said.
The prime minister also sought to unite her party against the opposition political parties that she labeled as “enemies of enterprise” and unwilling to stop the state from ever expanding. “I will not allow the antigrowth coalition to hold us back,” she said. She pledged to build more homes, make child care more affordable and roll out faster internet connections.
Ms. Truss inherited an economy teetering on recession and suffering from one of the highest inflation rates among wealthy countries. Her new government quickly rolled out a large bailout plan to protect homes and businesses from rising energy costs from the war in Ukraine.
But days later, her government also announced sweeping tax cuts without plans to fund them. What followed was a week of near chaos on U.K. financial markets, which briefly sent the pound to record lows and the costs of government borrowing skyrocketing.
The turmoil died down after the central bank intervened to stabilize the U.K. debt market and the government signaled that it would take fiscal responsibility more seriously, including ditching the cut to the top tax rate.
Now, concerns are growing among some members of her party that her government will seek to fund the tax cuts by ensuring spending on social programs doesn’t keep up with inflation, meaning a decline in real terms. Already, senior party leaders have said they would block such policies, setting up a possible showdown for Ms. Truss.
“She is right to focus on the problem of growth but her answer is divisive and unpopular in the wider country,” says Matthew Goodwin, a politics professor at the University of Kent. He pointed to a recent survey of British voter attitudes in which just 6% favored both cutting taxes and public services.
Ms. Truss now faces trying to sell her own party on the changes, including promises of deregulation in coming months, as well as outlining how it plans to pay for the tax cuts.
Some senior Conservatives expect her to moderate her plans and reshuffle her cabinet to bring in Tories who didn’t support her leadership bid to help stabilize the party. Others said she needs time to see her policies through. A key date is already approaching: local elections in May which will act as a public referendum on her leadership.
If the drumbeat of bad news continues, it isn’t clear what happens next to Ms. Truss. Conservative Party bylaws mean that she can’t be forced out by her own party for a year. Meanwhile lawmakers are loath to foist another leader on the British public. The Tories have already replaced two of their own prime ministers in the past three years.
A spokesperson for the prime minister didn’t immediately respond to a request for comment. Ms. Truss sounded defiant on Wednesday. “You can trust me to do what it takes,” she said.
The prime minister will likely have to hunker down and keep selling her plan, said Mr. Goodwin. “She can’t really slump any further in the polls…in a sense the only way is up,” he said.
Write to Max Colchester at [email protected]
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