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Liz Truss’s about-turn on public sector pay policy has dented her campaign to become the UK’s next prime minister.

The foreign secretary was in the ascendancy against rival Rishi Sunak amid favorable polling and increasingly confident performances in televised debates since the Conservative Party leadership race narrowed to two candidates on July 20. She’d also been boosted by recent U-turns from Sunak on tax policy. 

But on Tuesday, a policy reversal of her own left Truss on the back foot ahead of the next leadership hustings in Cardiff, Wales on Wednesday evening. A plan to pay civil servants less in regions where the cost of living is lower was withdrawn after less than 24 hours following a furious backlash from Tory politicians.

“This is certainly good news for Sunak’s campaign," Alan Wager, a researcher at the think tank UK In A Changing Europe, said in an interview. “It reinforces a broad sense that Truss is making things up and doesn’t know what she is talking about on economic policy, which is something that Sunak has been saying." 

It’s too early to measure the damage, especially given the electorate in the leadership race -- the 175,000 grassroots Conservative Party members -- are notoriously difficult to poll. But the proposal and then its abandonment after less than a day, gave fodder for Sunak, his Tory allies and the opposition Labour Party to go on the attack. 

Truss said late Monday that she planned to establish regional pay boards to align civil service salaries to living costs in their area. The policy, her campaign said, could save the British taxpayer £8.8 billion ($10.8 billion) a year if extended across the public sector -- a workforce that includes nurses, teachers and the police. 

‘Terrible Idea’

The policy appeared to directly contradict Prime Minister Boris Johnson’s manifesto pledge to “level up" economic opportunity across the country, and the backlash followed on Tuesday morning. 

Tory MP Steve Double called it a “terrible idea" that was “hugely damaging to public services. and fellow southwest England MP Gary Streeter called the proposal “disastrous." Ben Houchen, the Tory Tees Valley mayor said he was “speechless." 

Truss’s campaign then put out a statement saying there had been a “willful misrepresentation" of the plan and that it was “simply wrong" to suggest she was going to cut public sector pay. The proposal for regional pay boards was abandoned. 

“This has been an unusual and serious misstep from the Truss campaign," said Salma Shah, a former Tory government adviser. “The particular issue isn’t just about presenting an unpopular policy, it’s not taking ownership of it when a backlash emerged. This type of display of immaturity is not helpful to Liz Truss’s image."

Polling

Truss later on Tuesday told the BBC: “I never had any intention of changing the terms and conditions of teachers and nurses." 

In the run-up to her gaffe, the momentum appeared to be behind Truss, who led Sunak by 24 points in a July 21 YouGov survey of Tory members. A July 29 Techne poll of Conservative “supporters" suggested her lead had narrowed to 5 points.

Truss has also secured a string of high-profile endorsements, including from Penny Mordaunt -- the third-placed candidate who introduced the foreign secretary at Monday evening’s hustings among party members in Exeter, southwest England. 

In a sign that the Tory party faithful want to see progress on Johnson’s core mission to spread economic opportunities, one audience member complained it takes longer to get to Exeter from Penzance, in the extreme southwest, than from London, despite the capital being more than half again as far away. 

Cardiff Hustings

“When are we going to get the kind of infrastructure investment that makes our lives on equal terms to the rest of the country?" he asked.

Both Sunak and Truss pledged to boost investment and improve infrastructure in rural communities, and Truss was met with raucous applause after saying leveling-up “is not just about the north." 

The reaction of the audience in Cardiff may show if Truss’s fleeting flirtation with regional pay boards has damaged her. One Sunak-supporting Welsh Tory MP, Fay Jones, said that if the plan were implemented, it would hit Wales particularly badly.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

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