Tories in 'open revolt' against Liz Truss over 'kamikaze' budget

Liz Truss has faced fresh demands from angry MPs to explain how she plans to stop Government debt from spiralling out of control without raising taxes or cutting spending.

Conservative backbenchers openly criticised her at a bruising meeting of the 1922 Committee which came at the end of another day of economic turbulence.

During Prime Minister's Questions, Ms Truss ruled out a U-turn on her plan to cut income and corporation tax, and said she "absolutely" stood by a promise to protect current levels of public spending. Labour branded it a “kamikaze budget”.

Ministers are apparently relying on hitting their goal of raising annual economic growth to 2.5 per cent, which would allow them to reduce debt as a proportion of GDP without changing their tax or spending plans.

Liz Truss during Prime Minister's Questions in the House of Commons.

But multiple Tory MPs have called on the Prime Minister to reverse some of her planned tax cuts in order to reassure the markets that she is capable of balancing the books.

Speaking to the 1922 Committee of MPs last night, Ms Truss "called for the party to highlight the devastation that would have been caused to small business had we not acted" by capping energy bills, according to a No 10 source. She added that "Labour had no plan to avert this".

But in response, critics including Robert Halfon, the chairman of the Commons education committee, accused her to her face of abandoning Conservative values and questioned her decision-making ability - prompting rounds of applause from colleagues.

One MP told i: "That was a worse 1922 meeting than any under Theresa May. Brutal." MPs are "openly plotting how to put this Government out of its misery", they said.

Ms Truss and Kwasi Kwarteng will hold talks with rebel MPs from next week to convince them that the "medium-term fiscal plan" on 31 October will address their concerns, according to Therese Coffey, the Deputy Prime Minister. She added: "It's all about engagement."

Mel Stride, chair of the Treasury committee, warned that the Chancellor had to show "a clear change in tack". He tweeted: "Given the clear Government position expressed today on protecting public spending there is an emerging question. Whether any plan that does not now include at least some element of further row back on the tax package can actually satisfy the markets."

Damian Green, Theresa May's former deputy, said the idea of reversing last month's mini Budget was "a topic of conversation around the tea rooms of the House of Commons". He told the BBC: "There are various things you could do and one of the obvious ways – because you do need some big numbers to change – one of the obvious ways would be possibly to defer some of the tax cuts or the failure to put taxes up."

And multiple backbenchers stood up in the Commons to call for the Government to reconsider its tax policies. Robert Largan, the MP for High Peak, said: "The Conservative party stands for low taxes but also for fiscal responsibility and sound money. Given that the Prime Minister has just said that there will not be public-sector spending cuts, can I ask if the Government are considering deferring any of the tax measures recently announced by the Chancellor?"