UK’s Liz Truss makes Jeremy Hunt chancellor in a
bid to save her premiership
British prime minister announced she would no longer
halt a planned rise in corporation tax.
BY ESTHER
WEBBER AND ELENI COUREA
OCTOBER 14,
2022 2:08 PM
LONDON —
British Prime Minister Liz Truss fired her most senior Cabinet minister and
confirmed a U-turn on one of the key planks of her recent budget in a scramble
to save her premiership.
She sacked
Kwasi Kwarteng, her longstanding friend and ally, Friday and replaced him with
Jeremy Hunt, the former foreign secretary who is widely seen as part of the
moderate wing of the Conservative Party.
Speaking at
a hastily arranged press conference, Truss said she had taken “difficult”
decisions after it became clear that parts of her economic program have gone
“further and faster” than markets expected.
“We need to
act now to reassure the markets of our fiscal discipline,” she added.
Truss will
now go ahead with an increase in corporation tax she had pledged to reverse, in
order to raise an estimated £18 billion. She insisted she was still the right
person to lead the country as her “mission” of boosting growth remains the
same.
All eyes
will now be on the market reaction. The Bank of England previously announced
that it would on Friday end a bond-buying spree, an attempt to stabilize the
markets, sparking fears of further free-fall.
Despite
several attempts to calm the markets, including reversing a plan to cut tax for
the highest earners and bringing forward a more detailed budget statement,
Truss has struggled in the face of sustained economic and political pressure.
The decision to call an audience with the press — generally taken in
exceptional circumstances — underlines the precariousness of her position
little more than a month after she took office.
Truss’ team
hopes that in firing her chancellor she will save her premiership, though that
looks doubtful given a lack of support among Tory MPs in part because the plan
to cut taxes was central to her campaign for the Conservative party leadership
this summer.
Chancellor
Kwarteng cut short a trip to Washington for meetings with the International
Monetary Fund as his recently announced plans for major tax cuts came under
increasing strain in the face of market turmoil.
In a letter
to the prime minister, Kwarteng wrote: “We have been colleagues and friends for
many years. In that time, I have seen your dedication and determination. I
believe your vision is the right one. It has been an honour to serve as your
chancellor. Your success is this country’s success and I wish you well.”
The Times
reported that ministers would now increase corporation tax whereas they had
previously planned to freeze it, in line with suggestions made to POLITICO
earlier this week.
Truss “must
come up with a credible tax policy and that will involve some retrenchment from
the announced position,” a senior government insider told POLITICO’s London
Playbook.
Kwarteng
had been due to announce a “medium-term fiscal plan” with full details of how
the government plans to balance the books on October 31.
Rachel
Reeves MP, Labour’s shadow chancellor, said: “Changing the Chancellor doesn’t
undo the damage that’s already been done. It was a crisis made in Downing
Street. Liz Truss and the Conservatives crashed the economy, causing mortgages
to skyrocket, and has undermined Britain’s standing on the world stage.”
“We don’t
just need a change in chancellor, we need a change in government,” she added.
Kwarteng’s
number two in the Treasury, Chris Philp, has been demoted to a job in the
Cabinet Office and will be replaced by Edward Argar.
This
article has been updated.
Matt
Honeycombe-Foster contributed reporting.
Sem comentários:
Enviar um comentário