Kwasi Kwarteng’s records were scathingly criticized by Jeremy Hunt on his first day as Chancellor. Hunt admitted the government had made mistakes and was fumbling blindly with its economic plan.
Liz Truss appointed Mr Hunt yesterday afternoon, after Kwasi Kwarteng was sacked as Chancellor after weeks of economic chaos following the unveiling of his September mini-budget.
In a bitter parting shot to the Prime Minister, Mr Kwarteng told close allies he believes she has only bought herself ‘a few weeks’ and that mutinous Tory MPs’ ‘wagons are circling’.
After the Prime Minister’s recent U-turn, Hunt indicated that he would cut even more from her agenda. He also backed Liz Truss’s promise on Wednesday, which was to ‘absolutely no’ public spending cuts.
The Chancellor spoke to radio and TV stations, saying that some taxes will rise, and that he would need to spend more efficiently. This is a major departure from the low-tax and high-borrowing mini budget of Ms Truss (and Mr Kwarteng).
Sky News spoke to Hunt about his first interview as Chancellor. It was a huge honor to be asked by the Prime Minister to take on the role of Chancellor. I have to tell people, however: We face some difficult decisions.
“The last weeks have been difficult but they are coming out of a panic and a high cost of living crisis. The country now needs stability.
“No Chancellor can manage the markets. But what I can do, is show that our tax and spending policies can be controlled. That will take some hard decisions on both spending and tax.
“That’s what I have to do right now for people that worry about rising mortgage rates and who also care about winter survival. [with]People in the NHS are concerned about the rising cost of living and can rest assured that the government will provide the stability they require.
“There were errors. This was an error when it came to tax decisions and the spending that will be required to reduce the tax rate paid by the most wealthy.
Jeremy Hunt, the new Chancellor of Ireland, signaled a shift in direction and said there will be ‘tough choices’ ahead
Kwasi Kwarteng’s unstable economics were broken by Mr Hunt who said that some taxes will rise and that’spending efficiency’ would be required
Pictured at the BBC, the new Chancellor seeks to calm markets following a turbulent few weeks.
As he seeks to stabilise Britain’s economy, Andrew Bailey (Bank of England Governor) meets Mr Hunt at his Treasury offices yesterday.
Mr Hunt said: ‘No Chancellor can control the markets, but what I can do is show that we can control our tax and spending plans’
Kwasi Kwarteng was smiling as he returned home from being fired by the PM yesterday – and before giving a goodbye shot
Liz Truss spoke at a Downing Street press conference on Friday, in which she revealed a second significant U-turn in her mini-budget. It was this time about corporate tax
“It was wrong to fly blindly and make these forecasts, without the Office For Budget Responsibility giving the assurance that they add up.
“Spending will not increase as much people would prefer and all departments of the Government are going to need to find more efficiency than they originally planned.
Hunt was clear in signalling a shift of course from Ms Truss, Mr Kwarteng and their radical mini-budget on tax cuts that caused market chaos.
Radio 4’s he said, “The way that we did it was clearly not right.”
We have to make some hard decisions. The spending is not expected to go up as fast as the people wish.
“We will also feel the pressure from the tax side. Taxes aren’t going to fall as fast as we hoped and certain taxes will need to be raised.
“This isn’t an easy time and we are not going to have the ability to do everything we would like to, but when we make these decisions we will remember some of our most vulnerable citizens.
As he criticized Kwasi Kwarteng’s unfunded tax cuts in a time of financial crisis, the new Chancellor took a dig at him as well.
In order to assure the market and the public, Hunt stated that he would balance his books and implement more stable economic policies in the Treasury.
He added: “They must be funded tax cuts. They need to be sustainable.
It is impossible to finance tax cuts with increased borrowing or debt. The highest amount of debt we have since 1960s is 97 percent.
“As Conservatives, who wish to cut taxes, it is essential that we find an effective way to achieve this. This will be one my most important jobs.”
Asking Hunt if it meant a return back to austerity if borrowing was under control, Hunt stated that the spending reductions will not be at the same levels as the ones introduced by coalition governments but would make difficult decisions.
He explained that, despite being in the Cabinet when there was austerity in 2010, he doesn’t believe we are talking about something like it. However, I want to make it clear – there are some hard decisions.
“If we are able to make those tough decisions, our future looks very bright for the country. However, we will never be a successful country if we try and avoid challenging situations.
Labour is shaming the government and Shadow Foreign Secretary David Lammy said Liz Truss has not “stabilized” the ship.
BBC Breakfast: Mr Lammy accused the Prime Minister of crashing the economy with her unfunded tax cuts.
He explained that everyone knows it was her mini-budget.
He said that “She ran for many months for tax cuts for the most wealthy in our country,”
“This crisis was created in No 10, Liz Truss. This is unprecedented in a G7 country to run on their currency and have its yields rise overnight. It also makes it unusual for there to be four chancellors at the exchequer within the past four months.
Liz Truss made a desperate attempt to save her self yesterday. She fired Mr Kwarteng, and then did a major overhaul to her fiscal policy. Then she held a press conference in which she spoke to the media for only eight minutes.
The Chancellor was reportedly informed by her that she had to leave in order to avoid market turmoil. He only found out he was going to lose his job when it was covered in the media as he made his way to the PM.
According to a source, the ex-Chancellor said that it would only purchase her another few weeks.
“His belief is that the wagons continue to turn.”
This follows Friday’s press conference at Liz Truss didn’t apologize for the impact of the mini budget or answer media questions. She answered four identically before leaving abruptly.
Many Tory MPs openly discuss ways to eliminate the new PM.
Following a thank you from Ms Truss for her ‘decision to leave Cabinet’, Mr Kwarteng took aim at Ms Truss. But he soon confirmed that he had actually been fired.
This is a sign, many believe, that Ms Truss realizes her premiership’s in danger after an utterly disastrous 39 days at power.
Rumours have it that even Downing Street’s top officials talk about Truss’s departure.
It has been discovered that around 20 MPs met Monday night over curry in order to plan a possible departure.
Despite media briefings as early as 8am on Friday that the Chancellor had the PM’s full support, Mr Kwarteng cut his trip to the US a day short to fly back to the UK, and was sacked by Ms Truss almost as soon as he arrived back in London yesterday.
After the market turmoil caused by the unfunded mini budget announcement of the Chancellor, Liz Truss had to act because the pressure was mounting.
Critics say she is making a scapegoat of Mr Kwarteng because she used his policies to support her bid for the role of next PM.
The government was already forced to make one highly damaging climb down after it announced it would abolish the 45p income tax rate for those earning more than £150,000.
Numerous MPs, including Conservatives, felt that this was an inadvisable decision given the nation’s current crisis of affordability.
She announced to the nation, Friday in a press conference that her plan to freeze corporate tax was being scrapped and that it would rise from 19% to 25 percent as originally planned.
The measure will give the government an extra £18 billion per year – but is not an end to the problem, as OBR forecasts delivered to No.10 today show an imminent £60 billion black whole in the UK’s finances, according to reports.
The markets were jittery Friday night, and there was speculation that Tory MPs are plotting intensified to succeed her.
After three weeks of turmoil on the financial markets in the wake of Kwasi Kwarteng’s £43 billion mini-budget tax giveaway, Ms Truss ended days of frenzied speculation by forcing her friend out of office and U-turning on her commitment to drop the planned rise in corporation, a central plank of her leadership campaign.
Ms. Truss will be especially hurt by the U-turn, as Rishi Sunak (her leadership rival) will still go ahead with her plan.
She dismissed all calls to her resignation at Friday’s Downing Street news conference, saying that she was ‘absolutely determined’ to fulfill the promises she made.
This was just as she signaled a new squeeze on public expenditures that would ‘grow more slowly than previously planned’. It comes ahead of the medium term fiscal plan, which will be released on October 31. In this document Mr Hunt will outline his plans to bring the public finances on track.
She stated that it was clear that some parts of the mini-budget were more efficient and quicker than market expectations. Therefore, we need to change how we deliver our mission.
“We will do everything necessary to reduce the debt share in the medium-term.”
Liz Truss received a note from Mr Kwarteng stating that he was forced out and had been asked to resign.
He stated in the letter that he supports ‘your vision for the UK’. It was an indirect jab at the move to replace him because of policies he made with the PM.
Former Foreign Secretary Jeremy Hunt has now taken over the position, though some Tory MPs believe it is a’safe choice’, the majority of the public are not convinced.
YouGov’s snap poll found that only 14 percent of Britons think Mr Hunt will be a good job.
Potential runners/riders to replace Liz Truss
Britons don’t need to wait too long to be judged, because the new Chancellor is scheduled to appear in a series of interviews this Saturday. He will outline the government’s plans.
Some MPs including Cabinet Ministers have already begun informal talks to discuss the possibility of a new leader being installed by “consensus”.
One said: ‘If this is going to work we need to make it less about the leader – whether it is Rishi [Sunak]Penny or the Dollar [Mordaunt] or whoever – and more about the team.
“We need to be united and form a cohesive team. It is important to not enter into a competition.
The combination of Miss Truss’s yesterday actions and her awkward behavior at a superficial press conference seemed to make it harder for opposition. According to a former minister to Cabinet, Miss Truss cannot fire her Chancellor because she implements your policies. Then you pretend that the mess you made is your fault.
Another MP who is a veteran said, “I don’t know of any colleague that thinks Liz Truss should stay.”
William Hague was a former leader who claimed that PM’s primacy is now ‘hanging by a string’ due to a “catastrophic episode”.
Savanta ComRes poll found that 52 percent believed the PM had right to dismiss her Chancellor but 71% said she was unable to win public trust.
Friday night’s loyal MPs encouraged party colleagues to reconsider their efforts to remove Ms Truss. Under the rules of backbench 1922 Committee, she is theoretically exempt from another leadership vote.
There is some speculation that plotters might promote unity candidates to avoid contests or persuade Sir Graham Brady, the head of 1922 Committee to tell Ms Truss that it’s time to leave.
Sir Robert Buckland is the Welsh Secretary. He spoke on BBC Radio 4’s Any Questions program.
Even Sir Christopher Chope, a staunchly loyal MP, had his own harsh words for the party leader after she defended her on Thursday. He also ruled out any possible reversal. ‘I feel let down, very badly let down.
“And I was disbelieving at the things I’ve heard today, because they’re completely inconsistent with all that the Prime Minister stood up for when she got elected,” he said to BBC Newsnight.