Interest charge

Is Prime Minister Liz Truss still at the head of the British government?


LONDON — Britain’s newest finance minister scrapped the remaining elements of Prime Minister Liz Truss’ signature tax policy on Monday, a move that appeared to succeed in reassuring markets but left many wondering who is now in charge. head of government.

Truss stayed on the sidelines as Jeremy Hunt – a political rival who was chosen for the premiership on Friday – announced the government would not cut taxes, but rather allow them to be raised.

Truss has left it to House of Commons Leader Penny Mordaunt, another rival, to champion the Government’s U-turns in Parliament, where opposition lawmakers and some mutinous politicians from the ruling Conservative Party are calling on the Prime Minister to resign after only six weeks in office. It was another disastrous day for Truss.

The first time the public heard of her was on a BBC late night show. She said she wanted to ‘apologize for the mistakes that were made’ but added that she was ‘sticking around’ and ‘will lead the Tories in the next general election’.

Liz Truss sacks finance minister while reversing policies that sank sterling

Labor leader Keir Starmer pushed the refrain that Truss was “in power but not in power”.

“Where is the prime minister?” Starmer asked rhetorically. “To hide, to dodge questions, to be afraid of one’s shadow.”

Some commentators talk about when she will leave, not if. A British tabloid is live streaming a head of iceberg lettuce placed next to a photo of Truss and asks which one will last the longest.

An editorial in the Sunday Times said: “Truss has destroyed the Conservative Party’s reputation for fiscal competence and humiliated Britain on the international stage.

‘Senior Tories must now act in the national interest and remove her from Downing Street as quickly as possible,’ the editorial continued, while calling Hunt a ‘postman prime minister’.

Hunt is a moderate conservative who is considered a safe pair of hands, although he has twice lost contests to lead his party. He assured the country that Truss was “in charge”.

“It’s the hardest form of leadership to accept that the decision you’ve made needs to be changed,” he told parliament. “And the prime minister did it, and she did it voluntarily because she understands the importance of economic stability, and I respect her for that.”

Why is Britain comparing its Prime Minister to a lettuce?

Truss was installed in Downing Street as the choice of 160,000 paying Conservative Party members, or around 0.3% of the population. The growth-by-tax-cut plan that helped propel her candidacy and drew admiring comparisons to Margaret Thatcher has now been gutted.

Tax cuts for the rich have not gone down well with a public facing record inflation and soaring bills. But the government’s about-face had much more to do with bond traders, who were spooked by the level of borrowing the plan would require.

Hunt stepped in after two of the most controversial parts of the plan had already been scrapped. And yet, he braked hard, stressing that debt and spending would be new watchwords.

“We are going to reverse almost all of the tax measures announced in the growth plan three weeks ago,” Hunt said. “There will be tougher decisions, I’m afraid, on both tax and spending as we deliver on our commitment to debt reduction as part of the economy over the medium term.”

Hunt also announced that the government’s popular plan to cut household energy bills – a ‘historic policy supporting millions of people through a harsh winter’ – will not continue for two years but will only last until april. The government will then adopt a “new approach” which “will cost the taxpayer much less”.

Markets have been receptive to the government’s pullback. The fall of the pound sterling has stabilized. The country’s main stock market index, the FTSE 100, was up. And the cost of government borrowing was coming down – although it is still higher than it was before Truss took over.

But British politics remains in turmoil.

Although there are no general elections in sight, two polls released on Monday showed the Labor Party more than 30 points ahead of the Conservatives.

“Who voted for that? signs appeared at protests and in the social media feeds of opposition lawmakers.

There are also grimaces among the Conservatives.

“His political position is completely untenable,” said Jonathan Tonge, a professor of politics at the University of Liverpool. “In any sane democracy, it would have passed by now.”

“She campaigned on a platform of tax cuts, a push for growth and supply-side reform – every element of that was dismantled by Jeremy Hunt,” he said. If Truss survives, “it’s only because the Conservative Party bigwigs can’t agree on a replacement.”

Conservatives are notorious for ruthlessly dumping their leaders. Boris Johnson won them a landslide victory in the 2019 general election, but after scandals – and a Tory slump in the polls – he was forced to resign. Truss’s personal polls are worse than Johnson’s, and his party’s polls have fallen.

People would look ‘quite crooked’ if the party staged another leadership race so soon, prominent Tory Damian Green admitted on BBC Radio 4. But he was asked if he wanted Truss to lead the party in the next general election, Green offered only backhand support. “If it gets us to the next election, it will mean the next two years will have been much more successful than the past four weeks.”

Getting conservatives to rally around someone to replace Truss can indeed be a challenge.

Although Hunt has taken on a powerful role, he is hardly a rising star within the party. He was beaten by Boris Johnson in the 2019 Conservative Party leadership race and was knocked out on the first ballot last summer after winning just 18 votes from fellow lawmakers.

A wing of the Conservatives would like the top job to go to former finance minister Rishi Sunak, a runner-up in the summer leadership race. Many of his economic predictions turned out to be prescient. But he is hated by Johnson loyalists, who accuse him of leading the revolt that brought down the last prime minister. And conservative lawmakers may invite further trouble if they nullify the party base by promoting Sunak.

Mordaunt, who is more popular with the base, has been discussed as another candidate. However, she wrote in the Sunday Telegraph that now was not the time to change prime ministers. “Our country needs stability,” she said, “not a soap opera.”

Over the weekend, a reporter asked President Biden what he thought of Truss’ “spinoff plan she was to come back from.”

Usually, US presidents don’t comment on an ally’s budget, but Biden stepped in, saying, “Well, that’s predictable. I wasn’t the only one who thought it was a mistake.

He added: “I think the idea of ​​cutting taxes for the super rich at a time when – anyway, I just think – I didn’t agree with the policy, but that’s up to the Great Britain to make that judgment, not mine.”