TRUSS FIRES KWARTENG OVER KAMIKAZE BUDGET, PM FACES DEMANDS TO QUIT OR BE TOPPLED
By SHAMLAL PURI
Associate Publisher & Senior Editor – UK
Worth Noting:
- Kwarteng, who was in Washington on an official attending a meeting at the International Monetary Fund (IMF), was summoned back to London amidst what he believed were urgent talks in Downing Street and expectations of another massive U-turn on the Truss government’s fiscal policy to scrap a projected shift in corporation tax.
- But as events followed, Truss asked him to resign. In a terse resignation letter to the Prime Minister on Friday, Kwarteng said, “You have asked me to stand aside as your Chancellor. I have accepted.”
- He said they had been friends for years and wished her well in her leadership endeavours.
- Truss did not waste time; she appointed Jeremy Hunt, an earlier leadership contender, to be the Chancellor of the Exchequer, replacing Kwarteng.
Britain’s first black diaspora senior Cabinet Minister, Chancellor of the Exchequer Kwasi Kwarteng, finance minister or Mr Money, was sacked on Friday in a dramatic move as Prime Minister Liz Truss desperately tried to salvage her 39-day Government amidst an unprecedented political and economic crisis which could also lead to her ousting.
The scene is set for the UK’s third Prime Minister in a year.
Truss, who supported Kwarteng since the minibudget debacle cost the country £65 billion, finally showed the door to her favourite political supporter and friend for many years to protect her position as the Prime Minister.
Kwarteng supported Truss during the leadership campaign in which the leading contender Rishi Sunak was defeated on September 5. Truss rewarded him with a senior Cabinet post.
The Ghanaian diasporan born in London seemed to be a promising candidate with his credentials and astute delivery but failed to deliver as the Chancellor.
For some days, feelers were coming out of Downing Street observers of Kwarteng’s impending firing, but officials there were tight-lipped. They would not comment on this.
Kwarteng, who was in Washington on an official attending a meeting at the International Monetary Fund (IMF), was summoned back to London amidst what he believed were urgent talks in Downing Street and expectations of another massive U-turn on the Truss government’s fiscal policy to scrap a projected shift in corporation tax.
But as events followed, Truss asked him to resign. In a terse resignation letter to the Prime Minister on Friday, Kwarteng said, “You have asked me to stand aside as your Chancellor. I have accepted.”
He said they had been friends for years and wished her well in her leadership endeavours.
Truss did not waste time; she appointed Jeremy Hunt, an earlier leadership contender, to be the Chancellor of the Exchequer, replacing Kwarteng.
The Prime Minister was confident that Hunt was a reliable and sensible figure who would help to restore fiscal credibility to her Government,
Hunt is the fourth chancellor this year with Rishi Sunak in the Boris Government, followed by Nadhim Zahawi and Kwasi Kwarteng. Would there be a fifth chancellor?
Observers said Truss turned her back on previous chancellors Sajid Javid and Rishi Sunak, who one source said she would not even touch with a barge pole. Javid, an earlier leadership contender, pulled out at the early stage and refused to support either candidate in their bid to be the Prime Minister.
A painfully serious-looking Truss, who usually smiled in public, held a press conference yesterday at 2.32 pm confirming that she had asked Jeremy Hunt to be the next Chancellor of the Exchequer.
Her opening remarks were unusually short, and one could see that her body language showed her disappointment at the rapidly unravelling events that clouded her Government’s shoddy performance.
She took limited number of questions.
Truss avoided engaging directly with some questions, including why she should stay Prime Minister when her Chancellor had been cast aside, especially as that controversial minibudget was a joint venture between her and Kwarteng.
She categorically said that she would not resign but wanted to see through what had been promised.
The critical question is if she will be able to do that or if her party would allow her to try.
In what is dubbed the mother of all U-turns, Truss reversed the increase in corporation tax which had become a thorn in her leadership.
‘I have decided to keep the increase in corporation tax as agreed by the previous Government.’ She told the Friday press conference.
This is seen as a major embarrassment to the Truss premiership as corporation tax was one of the central policies of her leadership campaign. Observers say this climbdown shatters her vision of leadership.
However, she was adamant that hers is a pro-growth government. The biggest poser was that these fiscal events saw largely unfunded tax cuts, which the markets found unpalatable.
She argued that her general message and campaign promises had remained unchanged as she wanted to ensure “we have economic stability”.
She still faces calls to scrap the minibudget, which would be a major embarrassment to her political career.
Kwarteng’s exit now adds pressure on Truss to resign or be toppled. Political knives are already out to oust her from Downing Street.
Media sources, citing influential contacts, have revealed that a group of senior Tory party members have been holding discussions following Kwarteng’s sacking, prompting them to come out in the open next week to demand the resignation of Liz Truss. Their seniority in the party will no doubt make it difficult for the Prime Minister to survive.
The ensuing weeks will be an acid test for the Truss Government, which though popular with her supporters, is speedily losing its charisma with the general public.
Observers point out that her future as Prime Minister hangs in a precarious balance, and she could be out of office sooner than later and before Christmas.
If that happens, United Kingdom will have prime ministers in one year. Tis would be a record showing the wobbly face of current politics in this country.
My earlier report in the inside pages analyses successors to take over from Liz Truss. There is no shortage of hopefuls, with the opposition Labour Party waiting in the wings if a general election is called and the Tories are routed.