London
CNN
—
Liz Truss has he sacrificed his finance minister and closest political ally just weeks into his tenure as prime minister to save his own skin.
On Friday morning, Britain’s Chancellor of the Exchequer, Kwasi Kwarteng, was summoned a day before he was due to return 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 financial markets to collapse. At one point, the pound sank to its lowest level against the dollar in decades.
Markets have settled somewhat since, though only after a major Bank of England intervention, were rumors that the mini-budget would be abandoned and reports that Kwarteng would be sacked.
However, Kwarteng’s disappearance doesn’t mean Truss is out of the woods. The free-market, low-tax policies that Kwarteng announced were the exact same policies that Truss ran for 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 Conservatives since 2012. Kwarteng and Truss were on the same page on their vision for Britain; removing him from office is a tacit acceptance that his economic plan has failed.
“The problem with his budget was never about the numbers, it was much more about the credibility of the plan,” a former Conservative cabinet minister told CNN shortly after Truss fired Kwarteng.
“You can reverse the numbers and throw out politics. Credibility cannot be reversed. She has removed the lightning rod, but now the lightning is going to hit her.”
Truss ended a remarkably brief news conference in Downing Street on Friday afternoon in which she defended her economic vision, 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 have to accomplish the mission in a different way,” Truss said. “And that is what we are absolutely committed to doing.”
Asked if she would apologize to lawmakers from her party, some of whom are publicly trashing her economic agenda, she replied: “I am determined to deliver on what I set out to do when I campaigned for party leader. We need to have a high-growth economy, but we must recognize that we face very difficult problems as a country.”
Truss quickly replaced Kwarteng with Jeremy Hunt, a multiple-brief former cabinet minister who has stood for leadership twice. She described him as “one of the most experienced and respected government ministers and parliamentarians”.
There are mixed opinions on whether the new Chancellor will be a stabilizing influence on the party or on Truss. Some Conservative MPs believe Hunt, who served as health secretary, foreign secretary and culture, media and sport secretary in previous governments, will bring unity to a party still reeling from a painful summer leadership contest. .
He is respected by both the left and the right of the party and has a calm, reassuring, family nature that appeals to a certain type of conservative.
However, it is also easy for the opposition Labor Party to attack. Hunt’s skeptics point out that his record in government is spotty. Whether the allegations are true or not, opposition leaders may say that he, as health secretary, failed to adequately prepare Britain’s health service for the coronavirus pandemic.
And as a candidate in the summer leadership race after Boris Johnson’s tumultuous presidency, Hunt had pledged bigger corporate tax cuts than Truss.
Asked why they thought Truss selected Hunt, despite his obvious flaws, an influential Conservative MP told CNN that Downing Street might look at its leadership rivals in this summer’s race and see. that Hunt was the candidate from the left of the party who secured the fewest votes from the deputies. A lesser threat than the promotion of other contenders that gave Truss more competition for his money.
Hunt will now address the nation on October 31 to present a fiscal policy to the country that will explain how the government plans to balance the books as it borrows money to help people pay energy bills over the next two years.
The reversal of the tax cuts, Truss said, will provide £18bn. And it’s not out of the realm of possibility that more savings will be made as Kwarteng’s budget becomes a distant memory.
What worries Conservative MPs most is that Truss’s credibility is gone and his authority is gone. He has appointed a chancellor whom he cannot blame for any future setbacks, and he now looks very weak against a reinvigorated opposition Labor Party, which is gaining ground in opinion polls.
So what comes next? The next general election constitutionally does not have to take place until January 2025, although no one is suggesting that Truss will survive that long. However, getting rid of the fourth party leader in just over six years in the short term would be difficult, even if things continue to go wrong.
Under party rules, Truss is shielded from a leadership challenge during the first year of her term. Her MPs may be able to rewrite her rules, but even if they do, there’s no certainty that replacing her will change the polls.
One Conservative lawmaker even suggested that a good outcome would be to remove Truss so that a new leader can try to turn things around enough to prevent the opposition from winning the next election.
Some of its lawmakers fear that crowning another leader without consulting the public, just months after similarly replacing Boris Johnson, could make the party look even worse in the public eye.
All of which means that, for now, Truss and her group are at a standstill. And unable to make major reforms, lacking key allies and reaching across the party for the sake of unity, the Truss government runs the risk of looking like a caretaker government that is simply waiting for someone else to take over.