Kwarteng out as chancellor as pressure mounts on PM Truss

London, Oct 14 (EFE).- British prime minister Liz Truss on Friday sacked Kwasi Kwarteng as chancellor of the exchequer amid an intense backlash against the government’s proposed mini-budget.

Kwarteng, who returned to London a day early on Friday from a visit to Washington DC for the annual meeting of the International Monetary Fund, confirmed the move on Twitter.

“You have asked me to stand aside as Chancellor,” Kwarteng said in an apparent resignation letter after being summoned to 10 Downing Street. “I have accepted.”

Shortly after, the prime minister issued a separate statement, calling Kwarteng a “long-standing friend and colleague”, adding that she was “deeply sorry to lose” him from her government.

“I deeply respect the decision you have taken today. You have put the national interest first,” she said, seemingly contradicting Kwarteng’s assertion that he was asked to resign.

In a dramatic U-turn, Truss has removed Kwarteng amid the fallout of the mini-budget they announced on September 23 that proposed a range of tax cuts, including for the country’s highest earners, and massive borrowing to spur economic growth.

The plans caused turmoil in the markets, led to an embarrassing rebuke from the IMF and forced the Bank of England to step in with measures to support government bonds.

Amid the backlash, Truss has been forced to abandon plans that would have scrapped the 45% income tax rate for earners of more than 150,000 GBP, and has promised to fund a massive aid package to help people afford soaring energy bills after initially rejecting the idea.

At a press conference on Friday following Kwarteng’s sacking, Truss performed another U-turn by announcing that she is keeping her predecessor Rishi Sunak’s plan to raise corporation tax, after she had pledged to scrap it during her leadership campaign.

“It is clear that parts of our mini-budget went further and faster than markets were expecting, so the way we are delivering our mission right now has to change,” she said.

“We need to act now to reassure the markets of our fiscal discipline. I have therefore decided to keep the increase in corporation tax that was planned by the previous government.”

The shadow chancellor, Labour’s Rachel Reeves, called on Truss to step down, saying “changing chancellor doesn’t undo the damage that’s been done.”

Scotland’s first minister, Nicola Sturgeon, has also urged Truss to resign for the sake of “economic stability” and call a general election.

“Her decisions have crashed the economy and heaped misery on people already struggling with a cost of living crisis,” she wrote on Twitter. “The only decent thing for Tory MPs to do now is call time on her government and allow an election.”

Downing Street confirmed that Kwarteng will be replaced by Jeremy Hunt, who served as a cabinet minister under Theresa May. EFE


Related Articles

Back to top button