UK's Truss struggles to salvage premiership

Up to 100 letters expressing no confidence in Britain's prime minister have been submitted by Tory MPs: Sunday Times and Sunday Express

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British Prime Minister Liz Truss attends a news conference in London, Britain. — Reuters file

By AFP

Published: Sun 16 Oct 2022, 2:31 PM

Britain's Prime Minister Liz Truss insisted on her devotion to "sound" economics heading into crisis talks Sunday with her all-powerful new finance minister, and a tense week of plotting by Conservative critics.

With even US President Joe Biden joining in attacks on her economic agenda, Truss admitted it had been a "wrench" to fire her friend Kwasi Kwarteng as chancellor of the exchequer.

But writing in the Sun on Sunday newspaper, she said: "We cannot pave the way to a low-tax, high-growth economy without maintaining the confidence of the markets in our commitment to sound money."

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That confidence was jeopardised on September 23 when Kwarteng and Truss unveiled a right-wing programme, inspired by 1980s US president Ronald Reagan, of £45 billion ($50 billion) in tax cuts financed exclusively by higher debt.

Markets tanked in response, driving up borrowing costs for millions of Britons, and the Conservatives' poll ratings have similarly slumped, leading to open warfare in the governing party mere weeks after Truss succeeded Boris Johnson.

She dramatically fired Kwarteng on Friday, despite co-authoring the package. His replacement Jeremy Hunt is now dismantling the tax cuts, while pressing for difficult spending restraint by his cabinet colleagues even as Britons endure a cost-of-living crisis.

The new chancellor met Truss at the prime minister's country retreat on Sunday to thrash out a new budget plan which he is due to deliver on October 31.

"It's going to be very, very difficult, and I think we have to be honest with people about that," Hunt said in a BBC television interview broadcast Sunday.

He defended Truss after her climbdowns, and after a disastrous news conference she held on Friday shortly after sacking Kwarteng.

"She's been willing to do that most difficult of things in politics, and that is to change tack," Hunt said, adding: "The prime minister's in charge."

Newspapers and several Tories questioned that verdict, arguing that Truss's central policy platform now lies in ruins.

The Treasury declined to confirm reports that Hunt plans to delay a planned cut to the basic rate of income tax, removing yet another headline measure announced by the new government last month.

Up to 100 letters expressing no confidence in Truss have been submitted by Tory MPs, the Sunday Times and Sunday Express said.

Opponents were said to be coalescing around Truss's defeated leadership rival Rishi Sunak and another one-time foe, Penny Mordaunt, for a possible "unity ticket" to rebuild the stricken Tories.

Defence Secretary Ben Wallace could be another compromise candidate for leader, the Sunday Mirror reported.

"I worry that over the past few weeks, the government has looked like libertarian jihadists and treated the whole country as kind of laboratory mice in which to carry out ultra, ultra free-market experiments," Tory MP Robert Halfon, who supported Sunak, told Sky News.

"Of course, colleagues are unhappy with what is going on, with haemorrhaging in the opinion polls," he said. "It's inevitable that colleagues are... talking to see what can be done about it."

But Johnson loyalists — still seething at Sunak's perceived disloyalty toward the scandal-tainted former leader — warned against a coronation that cuts out Tory grassroots members, and said the party would face irresistible pressure to hold an early general election.

The coming week could be key for Truss, starting with the first reactions on bond and currency markets when trading resumes on Monday, and as her restive members of parliament reconvene in Westminster.

Hunt at least has won important backing from Bank of England governor Andrew Bailey, who had to stage costly interventions to calm the bond markets up to Friday.

Bailey welcomed a "very clear and immediate meeting of minds" with the new chancellor, as the central bank readies to hold its next rate-setting meeting on November 3.

But Biden, in a highly unusual intervention in an ally's financial affairs, decried Truss's attempts to cut taxes on the "super-wealthy".

"I wasn't the only one that thought it was a mistake," the Democratic president argued.

AFP

Published: Sun 16 Oct 2022, 2:31 PM

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