Tory party conference: HS2, Liz Truss and the economy dominate as fault lines grappled by Rishi Sunak become evident

The Chancellor’s speech was overshadowed by HS2 being axed and a cameo from former prime minister Liz Truss

HS2, Liz Truss and question marks over the handling of the economy have dominated at Tory conference where the party is clearly divided.

Amid talk of lower turnout and low morale, Monday saw former prime minister Ms Truss effectively campaigning against Rishi Sunak, while the most senior Tory outside of London in Andy Street, the Mayor of the West Midlands, threatened to resign over HS2.

In a sign of the fault lines within the party, Rishi Sunak made a clear pitch to the Tory right with plans to scale back HS2, slash the Civil Service and impose tougher benefits conditions, as supporters of his predecessor grew louder.

Former prime minister Liz Truss leaves the Great British Growth Rally, a fringe event where she spoke alongside Dame Priti Patel, Sir Jacob Rees-Mogg and Ranil Jayawardena. Wire

Elsewhere, Ms Truss attracted a huge crowd to her “make Britain grow again” tax cuts rally, something appreciated by many in the membership while prompting derision, if not anger, among party figures.

The disputes within the party started over ongoing rumours the HS2 leg from Birmingham to Manchester would be scrapped – a decision that prompted a furious backlash from Tory grandees, businesses and delegates.

Greeted by some in the party as a sensible money-saving decision, the move to axe improved transport links to Manchester while holding the party conference in the city prompted accusations Mr Sunak was “tone deaf”.

Downing Street insist “no final decisions” have been made over axing the northern leg of the high-speed rail plans, with Cabinet sign-off expected before an announcement.

However, a spokesman for Chancellor Jeremy Hunt refused to deny the plans had been approved in the Treasury, while also making clear it was a decision not made by them, but the Prime Minister.

In the immediate aftermath, MPs on the right of the party praised the move, arguing the money could be “better spent on other infrastructure projects”.

Others were more critical, arguing the indecision had been an “unwelcome distraction”, but briefing it had, as the Chancellor delivered his conference speech, “sucked the oxygen away from anything good we had to say”.

One MP said: “I don’t have an issue with the decision, but briefing it out you’re cancelling improvements to Manchester’s transport links while you’re in Manchester is beyond tone deaf, and really embarrassing. I’ve gone onto television and defended it being built to Manchester, now we’re all going to be clipped up by Labour and made out as liars.”

It followed a first day of conference where both the Chancellor and Prime Minister refused to give answers on HS2, with transport secretary Mark Harper forced to spend a whole hour deflecting from the subject while speaking with figures from the rail industry.

So angry was Mr Street over the decision that an impromptu press huddle was organised inviting the vast majority of journalists attending the conference, where the West Midlands mayor urged Mr Sunak not to give up on the HS2 Manchester leg, insisting he could find private sector investment to see it through.

He implored the Prime Minister not to "turn [your] back on a once-in-a-generation opportunity" to "level up" the country, and repeatedly refused to rule out resigning if the decision went ahead.

The news that a decision had been made filtered through as Mr Hunt gave his conference speech, in which he announced plans to cut the size of the civil service, increase the national living wage for over-23s to at least £11 an hour and impose tougher conditions on benefits. Two of these had previously been announced, but represented an attempt to appeal to the right of the party in the face of accusations by some that Mr Sunak was “governing like a remainer”.

One Tory source, on the right of the party, said: “I’d love to give you a reaction to it, but he said f*** all, and all everyone is talking about is Liz Truss. That whole thing could have been an email.”

Under pressure to announce tax cuts, the Chancellor said "the level of tax is too high", but took a more pragmatic and long-term approach to lowering it.

This was in stark contrast to Ms Truss, who prompted crowds so large there were queues to see her, reiterating the membership is more to the right than the MPs, creating a headache for the Government.

She urged members to “unleash their inner conservative” after calling for Mr Hunt to cut corporation tax to 19 per cent or less and to slash Government spending.

Ms Truss said: “Let’s stop taxing and banning things. Let’s instead build things and make things. Let’s be prepared to make conservative arguments again, even if it’s unpopular, even if it’s difficult. I want everybody in this room to unleash their inner conservative.

“And finally, my friends, let’s make Britain grow again.”

A small, but growing part of the Tory party believe Ms Truss is slowly being proved right over the economy. One told The Scotsman her interventions showed why “she could be the leader we need in opposition”. Her approach retains support among numerous popular figures on the right, with her speech attended by Dame Priti Patel, Sir Jacob Rees-Mogg and Nigel Farage.

Others were less kind, with one conference attendee heard saying “what the f*** is she still doing here” as the former prime minister arrived.

Many in the party view her as dangerous, pointing out not just her economic record, but the impact she has on the membership.

A senior Tory source said: “I think her record speaks for itself when it comes to whether you should listen to her. She had what, 49 days as prime minister?

"Rishi Sunak has settled the party following the tumultuous period of her short-term reign, and is on top of his brief and across the details, unlike the last two prime ministers.

"She can do what she wants, but I sense no appetite among Tory MPs to have her back, let alone listen to her. People who worked with her know exactly what she’s like.

“Everyone remembers the impact of her policies, and the party is focused on Rishi’s plan, rather than what caused the mess in the first place.”