Liz Truss during a press conference on Friday. Photo: Daniel Leal/Pool via Getty Images
UK Prime Minister Liz Truss he’s still officially in charge, but he hardly seems in control.
The panorama: Truss unleashed chaos in the financial markets three weeks ago with a plan to cut taxes while at the same time financing massive energy subsidies. His finance minister is gone, along with most of that plan and possibly his authority.
Driving the news: It was not Truss, but the Leader of the House of Commons, Penny Mordaunt, who appeared before Parliament today to explain the departure of Truss’s close ideological ally, Kwasi Kwarteng, as Chancellor of the Exchequer.
- Mordaunt said that Truss had been detained on “urgent matters” and then clarified, perhaps single-handedly, that “the prime minister is not under a desk”.
- Kwarteng’s replacement, Jeremy Hunt, a relatively handpicked moderate in part because he is No loyal to Truss, then walked over to the dispatch box to explain that “almost all” of Truss’s trademark tax cuts would be reversed. Truss appeared and sat quietly beside Hunt for a while before leaving, booing.
As a step: Truss won the cross-party race to replace Boris Johnson by promising “bold” tax cuts, even for the wealthy, to boost economic growth.
- Truss’s rival for the leadership, Rishi Sunak, had warned that he risked raising inflation and forcing interest rates, claims he dismissed as “fear of the project” from the “anti-growth coalition”.
- In practice, the Truss-Kwarteng package spooked the markets so much that the Bank of England made an emergency intervention to ease the run on the pound.
- Unable to stabilize the situation, Truss took the humiliating step of turning economic policy over to Hunt.
State of the situation: Hunt acknowledged today that the government was partly to blame for the UK’s dire fiscal situation and said “nothing is off the table”, including scrapping Truss’s defense and pension funding promises, to restore “stability”. . His performance seemed to calm the markets, for now.
- Much damage has already been done. As chief economic correspondent for Axios, Neil Irwin gradesBritons face higher mortgage costs because of the chaos Truss unleashed without getting the tax cuts he promised.
- Polls now consistently put the Conservatives more than 30 points behind Labour. Surprisingly, a new vote today finds that only 21% of 2019 Conservative voters I think Truss would make a better prime minister than Labor leader Keir Starmer.
With your platform smashed and Hunt now monitoring the economy, the question Truss keeps getting from journalists (and some Conservative MPs) is: “Why are you still here?”
- Voters generally feel the same way, says James Johnson, whose firm JL Partners has been holding focus groups on Truss. “There was anger towards Boris Johnson. With Liz Truss, it’s more despair. People think he’s not up to the job.”
- Worse, voters don’t think she’s looking out for them, says Johnson. “You have to be caring or competent,” she says. “She has lost them both.”
What to see: The consensus from Westminster is increasingly that Truss is on the verge of leaving, but with no election in two years, her own party’s MPs would have to give her a nudge. Johnson believes that could happen in a matter of days, and it will almost certainly happen before the next general election.
- It is unclear whether Conservative MPs could rally around a single candidate, such as Sunak or Hunt, to avoid another leadership contest so soon. Other potential contenders include Mordaunt and Secretary of Defense Ben Wallace.
The last: Truss told the bbc tonight that “mistakes were made” but she acted in the national interest to rectify them and will lead her party to the next general election.
It is worth noting: If Truss is ousted, the UK will have its fifth prime minister since the 2016 Brexit referendum, as many as in the previous 37 years.