Published 10/17/2022 06:00
(Credit: Daniel Leal/AFP)
During a crisis meeting with her finance minister Jeremy Hunt yesterday, British Prime Minister Liz Truss insisted she is linked to a “strong” economy after a tense week of an attack by her party that threatens her continued in power.
The erosion of confidence began on September 23, when Truss unveiled its ultra-liberal programme, inspired by the policies of US President Ronald Reagan in the 1980s, to implement a £45 billion ($50 billion) tax cut, financed exclusively by increased debt. Markets slumped, sending debt ratings lower and the Conservative Party lower in the polls.
Under a flurry of criticism, Truss admitted it was painful to dismiss Kwasi Quarting as finance minister. But yesterday he wrote in The Sun on Sunday: “You cannot pave the way for a low-tax, high-growth economy without maintaining market confidence in the strength of our currency.”
The newly appointed Finance Minister, Jeremy Hunt, insisted that the Prime Minister retain control of her government despite her need to reverse her signature economic policies during her election campaign. He said taxes would rise and public spending would shrink despite the UK’s rising cost of living crisis. He said he was surprised to receive an invitation to return to the cabinet – after having served in two previous conservative administrations – but was honored to share Truss’ desire to prioritize economic growth. “It changed the way we would arrive, but it did not change our destiny, which is to make the country grow,” he said.
Pointing out mistakes made by the Liz Truss government, Jeremy Hunt suggested it would back down from the prime minister’s plans to cut taxes after weeks of economic and political turmoil. He, who was appointed on Friday, said taxes could rise and that public spending was likely to shrink further in the coming months and that Truss had recognized her mistakes and would correct them.
He told the BBC: “It was a mistake to push the maximum tax rate higher at a time when we have to demand sacrifices from everyone to get through a very difficult period.” He commented, “Spending will not increase as much as people want and all government departments will have to find more efficiency than they plan. Some taxes will not be reduced as quickly as people want.”
Hunt, who ran the two Conservative leadership races twice, is a veteran deputy who has held key government positions, including that of foreign minister. His comments suggest he may undo many of the economic promises that Truss championed and tried to implement during his first weeks in office.
“Truss is battling for her survival,” said The Times’ headline on Saturday, noting that “even in Downing Street, senior officials believe it is only a matter of time before she is forced out.” The Daily Telegraph already posted on its front page: “Truss clings to power.” According to the conservative newspaper, parliamentarians continue to plot to get her to leave the executive leadership as soon as possible. For the Financial Times, “the only thing that unites the party is the mistrust of Truss.” (with international agencies)
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