“Truss is fighting for his survival”titled Saturday The Times. “Truss clings to power” displayed in One the Daily Telegraph, the conservative newspaper asserting that Tory parliamentarians are still looking for a way to remove him from the head of the executive. For the Daily Mail, Friday saw “chaos, confusion and flip-flops reach unprecedented extremes”.
Speaking publicly for the first time since his appointment on Friday, new finance minister Jeremy Hunt said bluntly on Saturday that “Mistakes have been made” by Prime Minister Liz Truss and her predecessor in the finance ministry Kwasi Kwarteng, sacked the day before in the midst of the economic crisis, which turned into a political crisis within the conservative party. “The Prime Minister recognized it and that’s why I’m here”he added on the Sky news television channel.
Takeover
This close friend of Rishi Sunak, the former finance minister of Boris Johnson and opponent of Liz Truss in the campaign for Downing Street, has the mission of taking over the mini-budget announced on September 23 and very badly received by the markets, much of the Conservative Party and the British people.
“It will require very difficult decisions”, warned Jeremy Hunt, who is preparing to abandon many of the Prime Minister’s campaign promises. In particular, he announced that “spending will not increase as much as people would like”what “some taxes will not be reduced as quickly as people would like”and that others “will increase”alluding in particular to the new concession announced Friday by Liz Truss.
The Prime Minister had to give up keeping the corporate tax rate at 19%, resigning herself to increasing it to 25%, as planned by the previous Conservative government. Two weeks ago, she had already had to abandon a tax cut for the richest households in the face of the bronca aroused by this measure.
government strongman
The appointment of Jeremy Hunt should reassure the markets as much as calm the rebellion among the Tories. One of his first actions as new minister was to meet with Andrew Bailey, the Governor of the Bank of England, who had to act urgently to calm the markets after the presentation of the mini-budget.
Jeremy Hunt now appears as the strong man of the government, according to the British media, when Prime Minister Liz Truss is considerably weakened by his reversals. And his press conference on Friday did not convince.
After his speech, the markets continued to punish the pound sterling and the cost of British debt rose slightly on Friday, also when the Bank of England ceased its emergency action. A sword of Damocles for many British households who have mortgages to repay. Five million of them could have to repay £5,100 more a year by the end of 2024 as interest rates rise, according to a study by think tank The Resolution Foundation published on Saturday.
« Chaos grotesque »
For the Financial Times, “the only thing that unites the (conservative) party is the lack of confidence in Truss”. On Friday, the Prime Minister had evaded questions about her personal fate, insisting that she remained “absolutely determined” to deploy its policy. “I feel cheated, totally cheated”said Conservative MP Christopher Chope on the BBC, judging Liz Truss “in total opposition to everything she had supported when she was elected”.
But in his camp, we also raise the specter of a crushing defeat for those of the conservatives who would be tempted to provoke a general election, at a time when the Labor opposition prances in the lead in the polls. Labor leader Keir Starmer on Saturday castigated the « chaos grotesque » brought about by the Conservative government. “All the difficulties facing our country today are its responsibility”he insisted.