Senior Tories hold talks to discuss ousting Liz Truss to ‘rescue’ party

Senior Conservatives will this week hold talks on a "rescue mission" that would see the swift removal of Liz Truss as leader, after the new chancellor Jeremy Hunt dramatically tore up her economic package and signalled a new era of austerity.

A group of senior MPs will meet on Monday to discuss the prime minister's future, with some wanting her to resign within days and others saying she is now "in office but not in control". Some are threatening to publicly call on Truss to stand down after the implosion of her tax-cutting programme.

In a rearguard action to prop up the prime minister, her cabinet allies tonight warned MPs they would precipitate an election and ensure the Tories were "finished as a party" if they toppled a second leader in just a few months.

However, support for Truss is also evaporating inside the cabinet, with members keeping in close touch with her critics. "She is in the departure lounge now and she knows that," said a former minister. "It is a case now of whether she takes part in the process and goes to some extent on her own terms, or whether she tries to resist and is forced out."

Another MP said it "would be grotesque" to allow Truss to endure another appearance at prime minister's questions in the Commons on Wednesday after a series of humiliating U-turns, the sacking of ally Kwasi Kwarteng and the abandonment of her economic prospectus.

Between 15 and 20 former ministers and other senior MPs have been invited to a "dinner of grown-ups", convened by leading supporters of Rishi Sunak, to plan how and when to remove Truss and install Sunak and fellow leadership contender Penny Mordaunt as a unity pairing.

A source familiar with the conversations said: "They are just going to have to sit down and work things out. It now becomes a rescue mission for the Conservative party and the economy. That's where we are."

Another involved in canvassing MPs said that, just as with the removal of Boris Johnson, the process of agreeing to move against Truss remained difficult. "Everything is moving, but everything is much more complex and difficult than all would like," they said. Some moderates also believe Truss can survive if she sees through the coming week, starting with the reopening of markets on Monday.

The battle over her future comes after an extraordinary round of interviews by Hunt, who said it had been wrong to "fly blind" by announcing a raft of tax cuts without explaining how they would be funded. On Saturday night, he said Truss's mini-budget "went too far, too fast".

In a repudiation of the economic plans that won Truss the Tory leadership, he said that some taxes would rise while public spending would be held down. "There are going to be no easy choices - it's going to be very difficult," he said.

"Lots of the things that people are hoping for won't happen."

While he would not guarantee that benefits would rise with inflation, he said he was "very sensitive to the needs" of the poorest households.

Further U-turns on the mini-budget are being examined. At the prime minister's Chequers retreat tomorrow, Hunt and Truss will go through their plans for the medium-term fiscal statement on 31 October. Hunt will be allowed to reexamine the case for a windfall tax on energy companies, and on Saturday night it emerged that he plans to delay the penny cut in income tax that was another key part of Truss's package.

Truss's remaining allies are now battling to shore her up. Loyalists are urging the PM to force a no-confidence vote to go ahead rather than to agree to step down, should she be approached to do so. Under party rules, Truss is protected from a no-confidence vote in her leadership for a year. Those rules could be changed.

However, both Theresa May and Johnson were eventually persuaded to stand down by the chairman of the Tory 1922 Committee, Sir Graham Brady, without a ballot of MPs taking place.

"If we change leader again, we are finished as a party," said a cabinet minister. "When you've got both Philip Hammond and Nadine Dorries saying that if we change leader again there's got to be a general election, that's not light scaremongering.

"If I were Liz, I'd certainly risk a first vote of no confidence. From the point of view of the Tory party, it is best that she survives. Whether that means she will is another matter."

In an attempt to calm the markets yesterday, Bank of England governor Andrew Bailey said there had been an "immediate meeting of minds" between him and Hunt on Friday. However, he warned that "inflationary pressure" would probably need a "stronger response" in terms of increasing interest rates.

Despite Hunt's installation as chancellor, Tory morale remains low. While few MPs believe that Truss will fight the next election, there continues to be disagreement about the timing and mechanism of her removal.

One veteran Tory called on her to step down voluntarily last week. "She has to find the courage to walk away from this, to do it in an orderly fashion - and be thanked for having done so," he said.

"If I were her, I would just say, 'Look, it's not worked and it's not right for me to continue'. I think that she would probably be best advised to sit down with Sir Graham Brady and discuss how we can have a replacement in a day or two."

Another influential figure said: "To be perfectly frank, I think that if there were a delegation to Liz Truss, then she would not put up much of a battle to stop it."