Jeremy Hunt is to make an emergency statement to the Commons on Monday in an attempt to stabilise financial markets, as Liz Truss battled to preserve her authority amid speculation she could be deposed as UK prime minister within days. Hunt, who has ripped up much of Truss’s economic programme since being appointed as chancellor in place of the sacked Kwasi Kwarteng, is expected to initially set out changes to last-month’s mini-budget this morning, via a Treasury statement and TV clip. The full Commons statement would then happen at about 3.30pm. Hunt is expected to roll back more of the unfunded tax cuts and other measures in the mini-budget, including the plans to cut the basic rate of tax by 1p. In a sign of the panic within Truss’s government, and the apparent role Hunt now has of being the only person trusted to speak on economic issues, no minister was sent out for the usual morning round of TV and radio interviews on Monday.
In a highly unusual statement, released at 6am UK time, the Treasury said Hunt’s statement would be “bringing forward measures from the medium-term fiscal plan that will support fiscal sustainability”. The rest of the plan would then be unveiled on 31 October, as scheduled, it said. The statement added: “This follows the prime minister’s statement on Friday, and further conversations between the prime minister and the chancellor over the weekend, to ensure sustainable public finances underpin economic growth.” There will be significant focus on the currency and gilt markets to gauge their reaction to Truss’s decision to ditch large parts of the mini-budget, in which Kwarteng unveiled billions of pounds of tax cuts, spooking investors. The pound rose on news of Hunt’s statement. Sterling leaped to $1.129 at one stage, having kicked off more nervously, dipping to $1.122 in overnight trading ahead of what many have feared would be a testing day on the markets. The Treasury’s announcement of an emergency fiscal statement came before markets opened for the first time since the Bank of England ended its government bond-buying scheme, with all eyes on the reaction in gilt trading. The Bank stuck to its guns by ending its emergency gilt-buying programme on Friday despite fears it would lead to a return to the volatile market conditions that sparked a damaging sell-off in gilts that left some pension funds on the verge of collapse. Pat McFadden, the shadow Treasury chief secretary, said the decision to make an emergency statement showed “ministers are now terrified of market reaction”. “I think it is evidence of the panic that the government is in and the damage that has been caused over the last few weeks,” he told BBC Radio 4’s Today programme. Hunt has been the effective public face of the government since the weekend, insisting Truss was still “in charge”, but warning about public spending cuts and possible additional U-turns on the mini-budget, including scrapping the 1p cut to the income tax base rate. “We are going to have to take some very difficult decisions, both on spending and on tax,” he told the BBC’s Laura Kuenssberg. “Spending is not going to increase by as much as people hoped and indeed we’re going have to ask all government departments to find more efficiencies than they had planned. Taxes are not going to go down as quickly as people thought, and some taxes are going to go up.” Truss was due to gather her cabinet at No 10 on Monday evening before a series of meetings with mutinous Tory MPs. Amid widespread talk of imminent efforts to unseat Truss, despite Tory leadership rules officially giving her a year’s grace before a challenge can be launched, a poll projected a 1997-style landslide for Labour if there was an election. The poll, by Opinium for the Trades Union Congress using the MRP method to estimate constituency-level results, projected Labour winning 411 seats. It suggested the Conservatives would lose 219 seats to end up on 137, with the Liberal Democrats on 39 seats and SNP on 37, with 10 cabinet ministers including Jeremy Hunt, Jacob Rees-Mogg and Thérèse Coffey being ejected, along with Boris Johnson. Plotting at Westminster continued with a group of senior Tory MPs, many of them supporters of Rishi Sunak, planning to meet on Monday night for a dinner hosted by ex-Treasury minister Mel Stride, amid speculation that as many as 100 no confidence letters have been submitted to Sir Graham Brady, the chairman of the backbench 1922 Committee, who controls the leadership rules. The veteran Tory MP Crispin Blunt was the first to go public in calling for Truss to step down, saying he did not think the prime minister could survive the current crisis. “I think the game is up and it’s now a question as to how the succession is managed,” he said.