Liz Truss has sacrificed its finance minister and the closest political ally just weeks after taking office in order to save his own skin.
On Friday morning, Britain’s Chancellor of the Exchequer, Kwasi Kwarteng, was summoned a day earlier to London from the United States directly to Downing Street, where he was relieved of his duties.
The move came three weeks after Kwarteng announced a controversial mini-budget filled with unfunded tax-cutting measures that sent the financial markets into collapse. At one point, the pound fell to its lowest level against the dollar in decades.
Markets have since calmed down somewhat, but only after a major intervention by the Bank of England did rumors filter through that the mini-budget would be scrapped and reports that Kwarteng would be sacked.
Kwarteng being gone, however, doesn’t mean Truss is out of the woods. The low tax and free market policies announced by Kwarteng were the exact ticket on which Truss ran to be prime minister.
The couple had written about their shared vision of a low-tax, high-growth Britain in a book written by a group of Tories as early as 2012. Kwarteng and Truss were in sync in their vision for Britain ; Removing him from office is a tacit acceptance that his economic plan has failed.
“The problem with their budget was never the numbers, it was more the credibility of the plan,” a former Conservative cabinet minister told CNN shortly after Truss fired Kwarteng.
“You can reverse the numbers and the disposal policy. You cannot reverse credibility. She took off her lightning rod, but now the lighting is going to hit her.
Truss ended a particularly brief Downing Street press conference on Friday afternoon in which she defended her economic view but refused to apologize to her party or the public for the turmoil sparked by the mini -budget.
“We recognize that due to current market issues, we need to complete the mission in a different way,” Truss said. “And that’s what we are absolutely committed to doing.”
When asked if she would apologize to her party’s lawmakers, some of whom publicly denigrate her economic agenda, she replied, “I am determined to keep what I announced when I campaigned for party leader. We have to have a high-growth economy, but we have to recognize that we face very difficult problems as a country. »
Truss quickly replaced Kwarteng with Jeremy Hunt, a former cabinet minister with multiple memories who ran twice for the leadership. She described him as “one of the most experienced and respected ministers and parliamentarians”.
Opinions are divided on whether the new chancellor will have a stabilizing influence on the party or on Truss. Some Tory MPs believe Hunt, who served as Health Secretary, Foreign Secretary and Culture, Media and Sport Secretary under previous governments, will bring unity to a party still recovering from the race to the killer direction of the summer.
He is respected by both the left and the right of the party and has a calm, reassuring and familiar nature that appeals to a certain type of conservative.
However, it is also easy to attack for the opposition Labor Party. Hunt’s skeptics point out that his record in government is spotty. Whether the accusations are true or not, it would be possible for opposition leaders to say that as health secretary he failed to adequately prepare Britain’s health service for the coronavirus pandemic.
And as a candidate for the summer leadership race after Boris Johnson’s tumultuous prime minister, Hunt had actually pledged to bigger corporation tax cuts than Truss.
When asked why they thought Truss chose Hunt, despite his obvious flaws, an influential Tory MP told CNN it was possible Downing Street looked at his rivals in the leadership of this summer’s contest and realized that Hunt was the party’s left-wing candidate with the fewest MP votes. Less threatening than the promotion of other contenders which gave Truss more run for his money.
Hunt will now address the nation on October 31 to present a fiscal policy to the country that will outline how the government plans to balance the books as it borrows money to help people pay their energy bills in the over the next two years.
Canceling the tax cuts will provide, according to Truss, £18 billion. And it’s not impossible that further savings will be realized as Kwarteng’s budget becomes a distant memory.
What worries Tory MPs most is that Truss’ credibility will be shaken and his authority gone. She has appointed a chancellor she cannot blame for any future hiccups, and now looks seriously weak against a reinvigorated opposition Labor Party, which is rising in the opinion polls.
So what comes next? The next general election constitutionally does not need to be held until January 2025, although no one is suggesting that Truss will survive that long. Still, getting rid of the party’s fourth leader in just over six years in the short term would be difficult, even if things continue to deteriorate.
Under party rules, Truss is protected from a leadership challenge during her first year as premier. It’s possible her MPs could rewrite the rules, but even if they do, it’s unclear whether replacing her would topple the polls.
One Conservative lawmaker even suggested that a good outcome would be to remove Truss so that a new leader could try to turn things around just enough to prevent the opposition from a landslide in the next election.
Some of its lawmakers fear crowning another leader without consulting the public – just months after replacing Boris Johnson in the same way – could make the party even worse in the public eye.
All of this means that for now, Truss and his group are stuck. And unable to make major reforms, without key allies and reaching across the party for the sake of unity, Truss’s government runs the risk of looking like an interim government that is just waiting for someone else take over.