Communication key for Liz Truss as MPs gather for Tory conference

Party conferences can feel like a strange bubble, detached from the outside world.

But every word Liz Truss and her chancellor utter here has the potential for very real consequences.

On the markets - who have already been spooked by their tax-cutting bonanza mini-budget, directly impacting people's money, mortgages and savings.

On the public - who have swung sharply behind Labour in seven polls since that mini-budget, in levels not seen since 2001.

On Tory MPs - many of whom never voted for Ms Truss's economic plan.

All of them want reassurance. So every word matters.

But it's communication that is, so far, proving a problem for the chancellor and PM.

Just a week ago, Kwasi Kwarteng's hints to the BBC's Laura Kuenssberg that even more tax cuts could be on the way were seen as a direct contributor to the pound falling to a record low.

On Thursday, Ms Truss broke a media silence in a series of BBC local radio interviews where she was confronted with people's very real fears about their bills and mortgages.

It doesn't seem likely they will row back on the plans that many argue have fuelled some of the economic turmoil overshadowing this conference, despite pressure from within their own ranks over some aspects.

So communication is key if they are to climb out of the tricky political situation they find themselves in. And it's a fine balance to strike.

"Hardcore members in the hall will want a 'lady's not for turning' speech whereas in the real world (and markets) we want something sane," one former cabinet minister tells me.

"She's almost checkmated herself. She can't U-turn. And pressing on seems terminal too," a former Downing Street spinner observes.

Ms Truss and her chancellor don't agree with that, obviously.

She has admitted there has been economic "disruption" since her chancellor's mini-budget, but has also said in the past she is prepared to be unpopular if it means pushing ahead with the plans she thinks will grow the economy.

But she's under pressure to communicate why her plans are the right ones to do that against the current economic backdrop.

The government's £45bn tax cuts, funded by borrowing, spooked the market, triggered a dramatic fall in the pound, and forced the Bank of England to step in.

Interest rates are up, causing many mortgage deals to be pulled and some people's monthly repayments to rise.

Inflation is still high, and energy bills have gone up - though the rise has been softened.

Ministers are looking at spending cuts across government, at a time when some public services like the NHS are already warning of being dangerously squeezed this winter.

Politically, this plan is one causing particular jitters among MPs - especially when viewed alongside plans to lift the cap on bankers' bonuses and scrap the top 45% rate of tax for the highest earners.

On 23 November, the chancellor is due to set out his "medium-term" fiscal plan, which he argues will show how he intends to get debt falling again.

It could include some government budget tightening, as well as some reforms to the economy which could include things like loosening rules around planning to increase house building in some areas, changes to business regulations, and to immigration rules for workers in sectors hit by staff shortages.

The Office for Budget Responsibility is also set to publish an updated forecast on the country's finances in November, assessing the impact some of their new measures could have.

Some Tory MPs and associations are already lobbying for two changes some feel could ease nerves.

One is to bring forward the for an OBR forecast and the chancellor's further economic reforms to stimulate growth.

"She has to calm the markets, and the public to be honest. She needs to commit to independent analysis as soon as possible," one prominent Tory think tank tells me.

The second is abandoning what some see as a politically-toxic plan to scrap the top rate of tax for the highest earners.

But Ms Truss has shown no indication she will concede to either of these calls.

She and the chancellor have been clear they believe a radical shake-up to the tax system is necessary to grow the economy and, among her supporters, there is surprise that people are surprised.

"Most of her policies were heavily trailed during her leadership campaign," one senior Tory MP who backed Ms Truss in the Tory leadership contest tells me - referring to her repeatedly pledging to scrap the national insurance and corporation tax rises.

"The cut to income tax was only brought forward by 12 months. The only really big surprises were the 45% tax rate [cut] and lifting the cap on bankers' bonuses.

"But I think it's a radical approach that was well-trailed. People have got to come to terms with that.

"If anyone was surprised that this was a radical financial statement, they shouldn't be."

Some of Ms Truss's backers, like this MP, believe it was "quite right" for her to be bold in her desire to stimulate economic growth.

But he does feel that the "big problem" the party has had is a lack of communication and calls for Ms Truss to make a "massive media exercise" a top priority.

"Really what we need is a far more professional approach to all this.

"An explanation of what is happening, why, what is likely to be the consequence.

"The problem is it doesn't seem to be all this is being communicated - for example how the energy support package will help reduce inflation."

This concern about communication is something both her supporters and opponents seem able to agree on.

Conservative MP Sir Charles Walker said: "There's only two years until a general election and once you've lost trust it's very hard to get it back. So it's got to double down. Spend a lot of time explaining to people what it's doing."

One Tory MP who backed Ms Truss tells me that people are "not that upset with the budget" as most of it is "support for energy and the National Insurance reversal".

But adds: "We are angry because they did not roll the pitch, and cannot communicate the strategy so the public feel frightened instead of reassured."

In a sign of just how politically febrile the situation is for Ms Truss, this particular MP - who was a harsh critic of Boris Johnson and backed Ms Truss to be leader - tells me: "I backed Liz and would rather Boris [was] back.

"She is seen by the public as economically incompetent and cannot communicate her strategy. She is done."

Another MP tells me they are not surprised at "how radical" her plans are but that "it's roll out (the timing and communication) has been so appalling."

Some of her supporters are more optimistic, one telling me it'll "blow over" and another that things will "ultimately right themselves, they always do".

But if the last few weeks has shown anything, it's that it's one thing saying you're prepared to be unpopular, quite another if your plans' unpopularity with the markets impact people's mortgages, savings, and the value of the money in their pocket when things are already tough.

For the sake of the economy, and her party's political fortunes, she'll need to use this conference to communicate why she's confident those things are safe under her plans.