British Prime Minister Liz Truss on Friday, October 14, dismissed her finance minister, forcing Kwasi Kwarteng to carry the can for turmoil sparked by her right-wing economic platform as tense Conservatives plotted her own demise.
The chancellor of the exchequer was dismissed in person by Ms. Truss after he rushed back early from international meetings in Washington, DC, multiple media reports said, and she was due later to hold her first Downing Street news conference. There was no immediate announcement of his successor, who will become Britain’s fourth finance minister this year.
“You have asked me to stand aside as your chancellor. I have accepted,” Mr. Kwarteng wrote in a letter to Ms. Truss, while insisting that their economic program was needed because “the status quo was simply not an option”.
Former foreign secretary and former Tory leadership candidate Jeremy Hunt was appointed as Mr. Kwarteng’s replacement, making him Britain’s fourth finance minister this year.
Financial upheaval sparked by the new government’s September 23 plan to slash taxes – financed via billions in more borrowing – has subsided somewhat since the Bank of England intervened in bond markets.
But the central bank was adamant it would end its bond-buying spree on Friday, and market analysts said only a bigger climbdown by Ms. Truss following Mr. Kwarteng’s disastrous budget announcement last month would avert fresh panic.
No timing was given for Ms. Truss’s news conference, but the announcement underscored the sense of peril as some Conservative MPs reportedly mobilized to unseat the new leader just five weeks since she succeeded Boris Johnson.
Tony Travers, from the London School of Economics, told French news agency AFP Mr. Kwarteng had been made “the fall guy for the government’s mistakes” but the sacking had not taken the pressure off Truss or calmed the Tories. “It’s very hard to see them coming back from this” by the next election, he added.’Not going anywhere’
Mr. Kwarteng was due to conclude annual meetings of the International Monetary Fund (IMF) and World Bank in Washington this weekend, after earning a rebuke from IMF chief Kristalina Georgieva on the need for “coherent and consistent” policies.
A Treasury spokesman confirmed Mr. Kwarteng had cut short the trip “to continue work on his medium-term fiscal plan” due on October 31, after Ms. Truss held hurried meetings with her own financial advisors on Thursday in his absence.
As UK broadcasters showed live footage of Mr. Kwarteng’s British Airways plane landing at Heathrow airport, government bond yields eased in a sign that markets did expect a volte-face. Speculation was rife that Ms. Truss would row back on planned changes to corporation tax, having already changed her mind about cutting income tax for the highest earners.
The promised tax cuts were the centerpiece of Ms. Truss’s successful pitch to Tory party members that she, rather than rival Rishi Sunak, was the best candidate to replace Johnson.
That program now lies in tatters, and Ms. Truss’s judgment is in question more than ever, after Mr. Sunak’s warnings were entirely vindicated: higher borrowing to pay for tax cuts served only to terrify the markets and drive up borrowing costs for millions of Britons.Subscribers only
Speaking in Washington on Thursday, Mr. Kwarteng had insisted that his job was safe. “I’m not going anywhere,” he said. The prime minister has “total confidence” in her fellow free-marketeer, international trade minister Greg Hands told Sky News on Friday morning.
Comments are closed.