Liz Truss has sacrificed her Chancellor of the Exchequer and her closest political ally after only a few weeks as Prime Minister to save her own skin.
On Friday morning, British Chancellor of the Exchequer Kwasi Kwarteng was summoned a day earlier to return to London straight from the United States to Downing Street, where he was sacked.
The move came three weeks after Kwarteng announced a controversial budget full of austerity measures that sent financial markets tumbling. At one point, the pound fell to its lowest level in decades.
Markets have since settled somewhat, although after a major intervention by the Bank of England, rumors leaked that the small budget would be scrapped and Kwarteng was to be sacked.
Just because Kwarteng is 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 that Truss presented to become Prime Minister.
The pair wrote about their shared vision of a low-tax, high-growth Britain in a book written by a group of conservatives until 2012. His removal from office is an admission that his economic plan has failed.
“The issue with their 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 sacked Kwarteng.
“You can reverse the numbers and ignore the politics. You can’t reverse the credibility. He took out the lightning, but now the light will strike.”
Truss concluded a brief press conference in Downing Street on Friday afternoon, where she defended her economic vision but refused to apologize to her party or the public for the turmoil caused by the small budget.
“Because of today’s market challenges we recognize that we need to deliver the mission in a different way,” Truss said. “And we are absolutely committed to doing that.”
Asked if he would apologize to his party’s MPs, some of whom are publicly thwarting his economic agenda, he replied: “I am determined to deliver on what I set out when I campaigned to be party leader. We need to have a high-growth economy, but as a country we are facing very difficult issues. we have to recognize it.”
Truss quickly replaced Kwarteng with Jeremy Hunt, a former cabinet minister who has served twice in the leadership. He described her as “one of the most experienced and respected ministers and parliamentarians in the government”.
Opinion is mixed 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 recovering from a leadership contest this summer.
He is respected by both the left and the right of the party and has a calm, reassuring and familiar personality that appeals to a certain type of conservative.
However, the opposition Labor Party is also easy to attack. Hunt-skeptics point out that his history in government is sketchy. Whether the allegations 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 in the summer leadership contest after Boris Johnson’s tumultuous prime ministership, Hunt pledged bigger business tax cuts than Truss.
Asked why Mr Truss chose Hunt, despite his obvious flaws, an influential Conservative MP told CNN it was possible Downing Street was looking at his leadership rivals in the summer contest and realized Hunt was the party’s left-leaning candidate. the least number of parliamentary votes. Less of a threat to Truss than promoting other competitors for his money.
Hunt will now address the nation on October 31 to deliver the country’s fiscal policy, which will outline how the government plans to balance the books over the next two years to borrow money to help people pay their energy bills.
Reversing the tax cuts will deliver £18 trillion, Truss said. And there’s no shortage of savings as Kwarteng’s budget becomes a distant memory.
What worries Tory MPs most is that Truss’s credibility has exploded and his authority is gone. He has appointed a chancellor who cannot be blamed for future misfortunes, and now looks very vulnerable to a reinvigorated opposition Labor party, which is surging in the polls.
So what’s next? The next general election is not constitutionally due until January 2025, although no one has suggested Truss will last that long. However, it would be difficult to unseat the party’s fourth leader in just over six years in the short term, even if things continue to go south.
Under party rules, Truss is protected from a leadership challenge in his first year as leader. His fellow lawmakers may be able to rewrite the rules, but even if they succeed, there is no certainty that replacing him would turn the polls around.
One Conservative lawmaker suggested a good outcome would be to remove Truss so a new leader could try to turn things around to prevent the opposition from being crushed at the next election.
Some of his MPs fear that crowning another leader without public consultation – just months after Boris Johnson was similarly replaced – could make the party look even worse in the public eye.
All of which means that for now Truss and his party are stuck. And unable to make major reforms, without key allies and reaching out to the whole party for the sake of unity, the Truss government risks looking like an interim government waiting for someone else to take over.