Friday, 2 December, 2022

Truss struggles to salvage premiership

LONDON: 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, reports AFP.

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.

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.