Robert Peston

When Jeremy Hunt received a message early yesterday morning from a 'Liz Truss' wanting to talk to him, he assumed he was being pranked. He later found out it was indeed the prime minister and she wanted to make him Chancellor. He has totally reset her economic policy this morning, so maybe the prank is on her. He has totally reset her economic policy this morning, so maybe the prank is on her I have just interviewed him, and what he told me is that in what he now says will in effect be a 'full budget' on 31 October, he will announce public spending plans that are lower than those previously announced (otherwise known as spending cuts), plus tax rises and some taxes not falling as fast as hoped (that promised 1p reduction in the basic rate of tax is at risk).

Here in Liverpool, at the start of Labour conference, politics feels more familiar than it has for many years, and also quite confusing and not wholly predictable. And the cause, mostly, is Friday's budget, which very deliberately delivered the bulk of additional income from tax cuts to those on highest earnings. This feels in many ways like a return to the kind of class based politics – what used to be called class war – we haven't seen since the Thatcher years of the 1980s. After all, ever since the election of Blair's New Labour in 1997 we are all supposed to be middle class.

Liz Truss may have been a Remainer but she has learned the political lesson of the EU referendum in the way that her genuine Brexiter opponent has seemingly failed to do.  The point is that in today’s milieu, and especially with an electorate of 160,000 largely Brexit-supporting Tory members, power is with the insurgent. In pinning her colours to at least £30 billion of immediate tax cuts, against Sunak’s steady-as-we-go no-tax-cuts-till-prudent mantra, she has defined herself as the crusader against alleged stultifying Treasury orthodoxy.

After all that, Sunak entered the final members' round to be Tory leader and UK PM with a comfortable 24 vote margin of advantage over the runner-up Liz Truss. But her 113 votes are enough of a mandate from MPs to present Sunak with a serious challenge during the summer contest. What is striking is that the next Tory leader will represent continuity with the Johnson years Tory members, who according to surveys seemingly prefer Truss to Sunak, can't be swayed by the idea that Truss would not be able to lead MPs because too few support her – which would have been a credible argument if Sunak had been supported by nearer 200 of his colleagues. So the fight is on.

That was quite a debate. I’ve never seen senior Tory ministers and MPs lay into each other so publicly.  Rishi Sunak accused Liz Truss and Penny Mordaunt of being socialists – not a compliment in the Tory lexicon – for being reckless with the public finances. Truss attacked Sunak for raising taxes to record levels. Kemi Badenoch called for unity while attacking more or less everyone for everything. Mordaunt seethed at what she saw as the cheap personal attacks she’s faced in recent days, especially over the trans debate. Tom Tugendhat attacked everyone else for being current or recent members of Boris Johnson’s government.

Rishi Sunak and Penny Mordaunt were both committed Brexiters in the 2016 referendum campaign – and both took career risks to support leaving the EU, against the wishes of the then-Prime Minister David Cameron. By contrast Liz Truss campaigned enthusiastically to stay in the EU (see for example the below forceful speech to the 2016 Food and Drink Industry dinner where she makes a powerful industrial case for staying in the EU). https://www.youtube.com/watch?v=u0cNPM4j1gQ It is striking therefore that Steve Baker and Suella Braverman (supported by the disenfranchised David Frost) prefer the zeal of the after-the-event convert to Brexit, namely Liz Truss, to the other candidates who were always Brexiters.

Tom Tugendhat and Kemi Badenoch have both fought impressive campaigns. They were both relatively unknown before the contest and they've significantly enhanced their reputations. But they are both so far behind it would take a miracle for either of them to reach the magic 120 votes needed to enter the final run-off where members pick the leader from two chosen by MPs (Badenoch needs 71, and Tugendhat 88 – when there are at best just 27 of Braverman's former supporters going begging).

To use a sporting cliche, Penny Mordaunt has brought the Tory leadership election alive. The little known former Defence Secretary placed second in today’s first round, with 67 votes – which is 17 more than third placed Liz Truss, and 21 behind the leader Sunak’s 88. And given that the MP contest is all about finding the top two, Mordaunt will believe that the momentum is with her – whereas the foreign secretary, Truss, should feel anxious. The question is whether the way that Jacob Rees-Mogg and Nadine Dorries yesterday positioned Truss as the Boris’s-Revenge-on-Sunak candidate has hurt or helped Truss. Either way, she has considerable ground to make up. Tonight there are three big questions.

Rishi Sunak has launched a slick, well organised leadership campaign very early. It is impossible to escape the conclusion that he has been preparing his leadership pitch quietly for weeks and months. Will this hurt or harm him? There may be some Boris Johnson loyalists who will accuse him of disloyalty - although Johnson did not manifest much fealty to Theresa May when she was PM and he foreign secretary. Per contra, Johnson’s many critics may want to reward Sunak for quitting as chancellor last Tuesday and triggering the crisis that led on Thursday to Johnson announcing he was stepping down. So it is not clear to me whether Sunak will be rewarded or punished for contingency planning for a bid to become PM while in theory there was no vacancy at the top. https://twitter.

The prime minister is resigning today, and staying on as caretaker till the autumn, but that leaves very big decisions to be taken not only about who succeeds him but about the process for replacing him. I am told Boris Johnson rang Sir Graham Brady – chair of the 1922 backbench committee and de facto shop steward for Tory MPs – this morning. Yesterday, Brady told him he’d lost the confidence of the party and that he should resign. Johnson refused and said he was determined to battle on. This morning he telephoned Brady and said that, having reflected overnight, he would be quitting after all.

The 1922 Committee – the organising body for Conservative MPs – faces a momentous decision on Wednesday night. If its members believe the mood of their colleagues is that the Prime Minister must face an immediate further test of his popularity, following the Chris Pincher debacle and the serial resignations from government, they could allow a further vote of confidence in the PM. But the threshold for such a vote would be massively increased, to avoid the charge that the committee was somehow on a vendetta against the PM and was trampling on the party’s internal rules of democracy.

There are three big questions about Sir Keir Starmer's 'five point plan to make Brexit work'. First is whether it makes sense economically: will it help return the UK to growth? Second, will it impress the EU, and is there any chance that what Starmer wants will be agreed by EU leaders? Finally, does it make sense politically, will it reinforce support for the Labour party? In an interview this afternoon, I probed Starmer on all this, and didn't emerge much wiser. You can watch the whole (short) interview here: https://www.youtube.com/watch?

Nicola Sturgeon’s claim that she will not contemplate breaching the rule of law by holding an independence referendum was pretty blatant trolling of Boris Johnson, given the multiple allegations he faces of being less than scrupulous in following domestic and international law. But Sturgeon also put Johnson and the Tory party in a tight corner by asking the Lord Advocate to petition the Supreme Court in London to determine the legality of a referendum. If the Supreme Court rules her way, then there will be the mother of all constitutional crises if Boris Johnson continues to reject the lawfulness of any vote by the Scottish parliament to hold a poll on 19 October 2023.