Britain’s ruling Conservative party will choose a new leader next week after prime minister Liz Truss resigned following a 44-day tenure marked by financial turmoil, policy U-turns and collapsing poll ratings.
Ms Truss was told to quit by senior party figures, leaving bitterly divided Tory MPs with the challenge of choosing the UK’s third prime minister in a matter of months.
She will go down in history as Britain’s shortest-serving prime minister, her government having collapsed in the wake of its failed “mini” budget last month, which contained £45 billion of unfunded tax cuts and triggered turmoil in the sterling and gilt markets.
The party has set a high threshold for leadership hopefuls, who will have to secure the support of 100 MPs — a big jump on the 20 needed to enter this summer’s contest when Ms Truss herself was chosen.
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Sir Graham Brady, chair of the 1922 committee of backbench Tory MPs, said that if only one candidate won enough support, then the new leader would be confirmed on Monday, when nominations close.
Otherwise, the leader will be chosen by Friday October 28th, with MPs set to reduce the list to two and party members then voting online to determine the result.
As there are 357 Conservative MPs, a maximum of three can make it on to the ballot.
“We fixed a high threshold but a threshold that should be achievable by any serious candidate who has a realistic prospect of going through,” Mr Brady said.
The new system sparked off speculation that it was intended to hand more control of the process to MPs, rather than to party members who might prefer candidates such as Boris Johnson, the former prime minister, or Suella Braverman, the right-wing former home secretary.
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In a brief statement in Downing Street, Ms Truss said she had notified King Charles she was standing down as Conservative leader so that a new party leader and prime minister could be chosen next week.
She added that she had been elected Tory leader to deliver a “low tax, high growth” economy, taking advantage of the “freedoms of Brexit”. But she conceded defeat: “Given the situation, I cannot deliver the mandate on which I was elected by the Conservative party.”
Rishi Sunak, former chancellor, and Penny Mordaunt, leader of the House of Commons, are the two frontrunners to replace her, although several other candidates could enter the fray.
Ms Braverman will be encouraged by supporters to stand as a flag-bearer for the Tory right, while Johnson’s supporters believe he could make a comeback, little more than three months after he was forced out of office.
Jeremy Hunt, the chancellor, has ruled out another run for the Tory leadership and hopes to stay at the Treasury. However, Ms Truss’s statement throws Britain’s economic prospects into further confusion.
The chancellor is scheduled to deliver a plan to fill a £40 billion hole in Britain’s public accounts on October 31st, but a new prime minister is expected to be in place by that date and will want to put their stamp on the plan.
Mr Brady, in his capacity as leader of the Tory backbenchers, was among those who saw Ms Truss in the hours before she resigned, as were Jake Berry, Tory chair, and Thérèse Coffey, deputy prime minister.
At least a dozen Tory MPs had called on Ms Truss to resign, including Miriam Cates, who is a member of the 1922 committee executive. “It seems untenable,” she said. “Yes, I do think it’s time for the prime minister to go.”
During Truss’s premiership, which only began on September 6th, her economic strategy has crashed and burned, her chancellor Kwasi Kwarteng was sacked and Ms Braverman was forced to resign as home secretary on Wednesday. The opposition Labour party has taken a lead of over 30 points in several recent polls.
Gilts largely shrugged off the news of Truss’s resignation, after rallying in the lead-up to her statement. The yield on the benchmark 10-year gilt was 0.03 percentage points higher at 3.9 per cent by late afternoon in London trading. The 30-year yield slipped 0.04 percentage points to 3.95 per cent, a small rise. Sterling held on to most of its gains against the dollar to trade 0.4 per cent higher on the day at $1.126. It had earlier climbed above $1.133.
- Additional reporting by Tommy Stubbington
- Copyright The Financial Times Limited 2022