choosing a leader the second time this year to replace liz truss. can the new conservative prime minister restore confidence, or will the country had toward early elections? this is "inside story." ♪ host: hello, welcome to the show. the u.k. is set to have its third prime minister in less than a year.

liz truss resigned thursday, just 45 days into the job and her economic policies spooked the markets and caused a sharp fall in the pound. a new leader faces formidable economic and political challenges. debt has risen to the highest levels in 60 years. that is 90% as inflation surges and the unfinished task of navigating the implications of braggs it. the labour party is calling for a new general election. first, the contenders to replace truss. reporter: some familiar names from the leadership contest that saw liz truss elected in the summer. the first of those, rishi sunak, the former chancellor who was behind liz truss in that contest. penny morden's who was third. and, in what would be an

extraordinary comeback, but not entirely unforeseen, boris johnson, the man who left office as prime minister in the summer. what seems to be the case is that johnson is flying back from a holiday in the caribbean, gathering support, donors, the same team that helped him win the 2019 election. already doing the rounds. he seems to have 40 mp's or so willing to back him in this race. johnson has an ongoing investigation around him over whether he lied to parliament around lockdown parties during the pandemic. that might not put him off, though many in his party think he is unfit to govern, they may think he is their best chance at beating labour in a general election with conservatives trailing in the polls.

in terms of how candidates will be elected, it is a higher bar than the election during the summer. each has to receive the backing of 100 mp's to go to the final round which means a maximum of three. there will be a lot of soul-searching with m.p.'s deciding whether to throw their weight behind boris johnson for him to reach that threshold. paul reese -- rhys, "inside story." host: let's bring in our guests from the u.k.. from london, a member of the british parliament. in salisbury, peter, a commentator and associate editor . and in london, alex, a conservative party member and political commentator. if i could start -- can another

internal conservative party vote produce stable leadership for the u.k.? >> i do not think so. it was loud and clear the party is badly affected. it is the same people. how will they make a difference? these are the people responsible for the mass. we will be made the laughingstock of the world. i do not think it will make a difference. host: let's take that point to alex. he mentioned the revolving door. you get the idea of conservative party is running out of options when boris johnson is back in the running again? alex: not just back. i must say, boris johnson is the

most likely person to win this contest. that is because of something paul was reflecting in the piece we just heard. conservative party members of parliament would not want an election. it would go bad -- it would go badly for them. as to whether a new leader would have a democratic mandate. a third prime minister in a single year. that argument dissipates if it is boris johnson who won the majority in 2019. whatever you think of him, the conservative party is most likely to select boris johnson. host: that is an incredible situation. who do you think is best placed to win the contest? and if it is boris johnson, what does that say about politics? peter: what it says about conservative politics is a wonderful thing, in a way.

mr. boris johnson is a proven and habitual liar, who was sacked by his own party for lying, only three months ago. host: and yet they are talking about him possibly coming back. peter: alex deane, no normal person, if you were a local bank manager or ran a local village shop, had been sacked three months ago for compulsive lying on a systematic basis, it would be unbelievable that he would be reinstated in that job three months later, but alex deane is completely right. it does look for very interesting reasons that mr. johnson has a reasonable chance of becoming prime minister this time next week if that is when

this contest ends. host: that is quite a turnaround. i want to go back to alex deane. if it is boris johnson, whoever it is, will the next prime minister be able to unite the conservative party, let alone the country? the divisions are much deeper than personalities. alex: it is a fair question. the numbers in parliament asked to back the johnson government are the same that expressed a no confidence in him a few months ago. the most generous phrase we might apply is situational flexibility. we have been seeing that. if they realize boris johnson is the new prime minister, and they preferred to keep their seats and not incur the wrath of their own associations, which produces

nominees to be members of parliament, they will back boris johnson as prime minister, at least at the beginning. the thrust of your question is right. with no disrespect to the labour party, who are flying in the polls, it is clear the biggest danger to the conservative party is the members of parliament. they have done now with three prime ministers in a row. when you find agreement with me, it makes the conservative party look ridiculous, tearing down leader after leader. theresa may, boris johnson, now liz truss. they have destroyed three leaders in a row. host: this flows nicely to the next question. will the conservative party be able to list -- to withstand the pressure of an early election, especially if boris johnson finds his way back into number 10? afzal: the fact we are

discussing the possibility of boris johnson coming back itself shows the difficulty they are in. it seems a total mess. someone pushed out as a proven liar, being investigated, the only prime minister in the history with a criminal record, as well. and so many are m.p.'s. how does that go down? how does that help? host: will it take us forward toward early elections? afzal: the difficulty is, they do have the majority. it proves the fundamental point, they are putting themselves and their party before the interests of the country.

it is one thing after another. you see a bar and then another lower bar and another lowering -- lower bar. millions of ordinary people are suffering as a result of their policies. host: i guess what we are getting here with his comments, conservatives are not going to break ranks. none will be open to the idea of early elections because they know that labour is way ahead. peter: that is true. if there was an election tomorrow morning, based on the polls now, tories would not get a single seat. obviously this is midterm and things can change. there is every incentive for conservatives to avoid an election. the fact remains that the conservative party has caused

chaos, financial chaos, looming economic chaos. people will lose jobs, mortgages are rising. they are chaotic, unfit for government. everybody can see that. i think they are in danger of losing their legitimacy. going back to alex deane's point, boris johnson is favored to return. i wonder whether they might see sense of this. in a period of financial emergency, where we are now, to put boris johnson in, the candidate of chaos back in charge, will frighten the financial markets. i have noted the prospect of a potential johnson return has already sent yields rising in the gilts market, the market in british government debt. host: the candidate of chaos,

what an expression. some of these divisions, maybe we need to explain why the conservative party is so divided. does it go back to brexit, the unfinished business of brexit? has there been a halloween out of government, of minute -- has there been a hollowing out of government, because they were perceived to be on the wrong side of brexit? >> there was a bit of that in the push against boris johnson, especially in the latter days of his premiership. i would listen carefully to what peter said and point to the fact nobody can pretend the current circumstances are good. four chancellors in four months.

inflation is rampant across europe, interest rates are rising across the developed world. a lot of that is not to do with who occupies number 10 and number 11, our chancellor. i would point out jeremy hunt's arrival -- i did not vote for him, but his arrival was one of the bright points of the brief liz truss premiership. it does look like he will remain chancellor, whoever wins the prime minister leadership. i think a lot of economic fundamentals in the u.k. are better than some of our european neighbors. if you are comparing us to france, germany, spain, the u.k. is not an outlier. we are doing well which is one of the reasons the g7 group has

forecasted the u.k. for higher growth rates. host: let's have a look at some of the stats. there are different stats about how well or differently the u.k. is doing compared to other countries. political instability has been bad for the u.k. economy. it was already struggling because of brexit, if you follow the economic graphs. the british pound falling significantly against the dollar, taking its hardest hit in the past month after liz truss' controversial mini budget. it has been on the decline since brexit. international business suffering. its total trade as a share of gdp falling 8% since 2019. latest research suggests brexit has cost the u.k. economy nearly

$35 million. 5% smaller the economy is at the last -- at the end of last year had -- than had they remained in the e.u. are they one of many countries suffering the economic consequences of covid, ukraine, or are they paying for decisions like exit and people coming in and out of number 10? peter: the first factor is global headwinds. alex deane is quite right to point to that. then you have what is being called by the financial times and others the so-called moron factor in british politics, that the conservative party is out of control and employs low caliber figures, with deranged economic

experiments the markets no longer trust the british government to manage sensibly. and, the general effect of brexit, going back to 2016. that is undeniable. to deal with the current situation, the idiot factor, absolute collapse, chaos at the top of the conservative party, clearly unfit to run the corner shop, let alone a g7 global economy. that is why we are seeing the gilt market is tipping at boris johnson, with him returning to his mendacious, deceitful school of government, which we had three years of, until he was

thrown out three months ago. host: some of the stats look like the cpd, the volume of u.k. goods, exports falling 14% in the three months to january 2021, at a time when the global average was a rise of 8.2%. when you compare the u.k. in some ways to the global economy, the u.k. is singled out, isn't it, for poor performance? afzal: i think this is it. we heard from alex trying to push this whole global situation. it has hit us because of government policies. this happened when mortgage rates went up. if you look at what has happened to families, millions of families are struggling. inflation has gone to 10.1%.

you have the energy crisis, the food crisis. and 12 years of stagnation. that is causing the difficulties . host: let's give alex a chance. alex: this conversation is getting strained. they are right the many budgets announced by the last chancellor -- inflation is running higher and every major european economy. it is peculiar for anyone to suggest the u.k. is doing worse. you cherry pick a single quarter from two years ago to try to demonstrate it. of course it is difficult for us as you have been referring to graphs.

it is difficult to rebut that. i rather doubt if you are tracking the euro's performance against the dollar you will see a huge difference. i accept that the mini budget we had in liz truss' leadership spooked sterling and other markets. the phenomenon in international markets is the dollar being so strong, not the pound being so weak. if you compare to other currencies you will see equal underperformance against the dollar. the yen is at its lowest low against the dollar. there was a moment you have to say this conversation got weird. host: we have not pulled anything out, there is no magic rabbit out of a hat. everybody can have a look at it and make up their own mind. alex: you are referring to

something i can't see. host: i have read it out. go ahead. peter: generally speaking, the british performance of the sterling and gilt markets were at barrens after the shambolic mini budget. we can't get away from that. you reeled out statistics about the effect of brexit on the economy and trade. these are labour party policies as well. labour party does not challenge brexit. they say it is a good thing and we have to live with it. labour has not offered a different set of policies, i.e. we want to join -- rejoin the single government -- single market.

conservatives are uniquely poor in their prognosis over the last seven years does not merit scrutiny. labour has not diverged. host: the fact is -- [overlapping voices] >> they have few division demons in the closet with brexit, union strikes, there are a few divisive issues in the labour party, were it to make it to a general election. afzal: what i said was to do with brexit. i am trying to say, how come with such high inflation, and it years of stagnation, and how is it for the last 12 years, the most growth in 200 years -- surely this is not all about brexit.

i am bringing home the point the chaos at the heart of the government, failing to deal with the brexit issue as well. the idea of brexit is that everything will be fine. host: the question now is, labor also has --labour also has its divisions and does not have a clear vision when it comes to some of these issues, whether it is exit, positions on union strikes, voter reforms, true or false? afzal: i do not accept that. the whole country was divided on brexit. half wanted to remain and half wanted to leave. host: but you have to have a policy and that is a criticism of all the major parties. afzal: we have a clear policy that we now accept [indiscernible] what i am objecting to now is,

this government is failing to move forward. what we should be thinking about is, how quickly can we go into the commonwealth, have growth, improve the wider world? if you are too busy fighting one another, making chaos, you can't do that. host: we have one minute left. i want to give it to peter. final thought? an opinion piece in the new york times, britain is a global laughingstock. what is this doing to britons standing in the world? peter: a member of g7, the u.n. security council, we are expected to have responsible economic management. read any foreign paper, look at der spiegel today, and we are

mocked. this is part of the chaos of the ruling conservative party. host: alex, in 30 seconds? alex: forgive me for not having seen der spiegel today. there are serious charges against the mayor of hamburg, which makes me wonder about germany's future, too. everyone knows how obsessed and bizarre the new york times' coverage has been in its negativity of the u.k. it demonstrates there is a jihad in the post-brexit environment for the u.k., and that is one of the foremost exemplars. it does not carry much water for me. host: thank you for expressing your opinions. afzal khan, peter oborne, alex deane. you can see the show again any time by visiting our website, aljazeera.com. for further discussion head to our facebook page, aj

insidestory. you can join the conversation on twitter. from me and the entire team, goodbye. ♪ ñn■x■é■í■x■x

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