UK PM Liz Truss reverses more tax-cutting plans and names Jeremy Hunt as finance minister

[BumRushDaShow]

Last edited Fri Oct 14, 2022, 11:45 AM - Edit history (2)

Source: CNBC

LONDON — British Prime Minister Liz Truss on Friday scrapped another key tax-cutting policy after firing her finance minister, in a bid to placate markets after the government’s controversial “mini-budget.”

“It is clear that parts of our mini-budget went further and faster than markets were expecting,” Truss said in a brief press conference.Truss scrapped the pledge to reverse predecessor Boris Johnson’s hike of corporation tax from 19% to 25%, a decision estimated to restore around £18 billion ($20.1 billion) to the U.K. Treasury’s coffers by 2026.

Finance Minister Kwasi Kwarteng was fired earlier on Friday after less than six weeks in the job, amid mounting political pressure and market chaos.

Jeremy Hunt — a former health secretary and foreign secretary — was announced as Kwarteng’s successor. Chris Philp, chief secretary to the U.K. Treasury, was also replaced by Edward Argar.

Read more: https://www.cnbc.com/2022/10/14/uk-pm-liz-truss-fires-finance-minister-kwasi-kwarteng.html

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Article/headline updated.

Previous update -

LONDON -- British Prime Minister Liz Truss on Friday scrapped more key tax-cutting policies after sacking her finance minister, in a bid to placate markets after the government's controversial "mini-budget." "It is clear that parts of our mini-budget went further and faster than the markets were expecting," Truss said in a brief press conference.

Truss scrapped the pledge to reverse predecessor Rishi Sunak's hike of corporation tax from 19% to 25%, a decision estimated to restore around 19 billion ($21.4 billion) to the Treasury's coffers by 2026. Finance Minister Kwasi Kwarteng was fired on Friday after less than six weeks in the role, amid mounting political pressure and market chaos.

"The economic environment has changed rapidly since we set out the Growth Plan on 23 September. In response, together with the Bank of England and excellent officials at the Treasury we have responded to those events, and I comment my officials for their dedication," Kwarteng said in his resignation letter after being asked to step down.

"It is important now as we move forward to emphasise your government's commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches."

Original article/headline -

UK Finance Minister Kwasi Kwarteng reportedly out after market chaos and tax-cutting plans

LONDON -- British Finance Minister Kwasi Kwarteng was fired on Friday, amid mounting political pressure and market chaos after less than six weeks in the role. Prime Minister Liz Truss is reportedly set to announce that the government will abandon key fiscal policy pledges laid out in Kwarteng's controversial "mini-budget" on Sep. 23, including vast quantities of unfunded tax cuts.

Among the policies on the chopping block are Kwarteng's pledge to reverse predecessor Rishi Sunak's hike of corporation tax from 19% to 25%, estimated to cost around 19 billion by 2026, and a 1.25% cut to dividend tax. The government earlier this month abolished its plan to scrap the top rate of income tax after a substantial public backlash, but this failed to quell market turbulence.

Kwarteng cut short a visit to Washington on Thursday to fly back to London as government ministers scrambled to address the market chaos unleashed in recent weeks. This included a sell-off of long-dated government bonds that led the Bank of England to intervene in order to save pension funds from collapse, and a spike in mortgage rates for prospective homeowners.

Truss had been under immense pressure to rethink her economic policies, with opinion polls showing support for the ruling Conservative Party collapsing and lawmakers from within her own party reportedly plotting to oust her after a tumultuous first five weeks in office.

[Dr. T]

1. Conservative fuck things up,

liberals clean up the mess left behind. Apparently, this is not unique to America.

[muriel_volestrangler]

2. He's confirmed it on Twitter

Link to tweet

2nd shortest term as Chancellor - the shortest was Iain Macleod, who died unexpectedly.

https://www.bbc.co.uk/news/live/uk-politics-63221738

[Bernardo de La Paz]

3. CONservatives in disarray for real. . . . nt

[hatrack]

4. Womp

Womp

[docgee]

5. Cutting corporate and dividend tax?

How us that supposed to help anyonebut the rich? In a downturn people are only buying non durable goods. That's where they need to help.

[Layzeebeaver]

6. This UK government is a shambles

It makes me sad that I decided to live here.

[muriel_volestrangler]

7. His replacement is Jeremy Hunt

Jeremy Hunt has been appointed as Liz Truss’s new chancellor, in a stunning reversal of political fortune and a sign that the beleaguered prime minister wants to reach out to other sections of the Conservative party.

Hunt, the former foreign secretary and health secretary, who has twice tried unsuccessfully to become Conservative leader, was named chancellor after Kwasi Kwarteng, in the job for just over five weeks, was sacked by Truss ahead of another U-turn over tax cuts.

A wider mini-reshuffle also resulted in Chris Philp, Kwarteng’s No 2 as chief secretary to the Treasury, being sacked from his role and moved to the Cabinet Office to become paymaster general. In a direct job swap, Philp was replaced by Edward Argar.

Hunt, who has been on the backbenches since Boris Johnson became prime minister in 2019, is seen as coming from the more one-nation wing of the party. His appointment indicates Truss wants to broaden her support – and is likely to slow down her rush to introduce tax cuts.

https://www.theguardian.com/politics/2022/oct/14/liz-truss-appoints-jeremy-hunt-as-chancellor-after-sacking-kwarteng

Hunt was not liked by health workers, during his long stint as health secretary. But he's not as ideologically inflexible as Truss or Kwarteng.

[turbinetree]

8. And just think there crypto fascist breathen here in the states want to use the Debt celing....

to cut Social Security and Medicare......if they get power.....

[PSPS]

9. Thatcher clone plus more "trickle-down" don't-tax-the-rich nonsense

This is one example of the advantages of a parliamentary system of government vs. our winner-take-all minority-rule system. In the US, "blowback" can be safely ignored and bad ideas can be shoved down the throats of the public so long as almost competitive races are won by the candidate who spends the most on television ads. Paid political ads are not permitted in the UK.

[Mr. Sparkle]

10. she threw him under the bus to try and save her job.

I wonder will he try to bring her down in parliament, its what happened to Thatcher

[onetexan]

13. Thatcher, as far right as she was, had a spine of steel. Truss? not so much.

I do not believe she will be able to sustain much longer. She will have a very short reign.

[brooklynite]

11. She then held a press conference and.....

Was that it? Eight-minute Liz Truss press conference will not steady ship

Was that it? By the time Liz Truss stood up for her press conference (although a briefing where only four questions were allowed barely counts), we already knew that she was about to abandon the key thrust of her mini-budget, and that her chancellor had been sacked. The big question was whether Truss herself would be able to survive. Her performance will have done little or nothing to persuade her MPs, or anyone else, that she will – or even that she should.

Truss said that the corporation tax rise planned by Rishi Sunak, that she campaigned to abandon during the Tory leadership campaign, would go ahead anyway. She said this was in response to the fact that her mini-budget “went further and faster than markets were expecting”. (Until Friday she has implied that global factors, not the mini-budget, were mainly to blame for the recent market turmoil.)

But then she tried to explain that she was being consistent with the mission she set out during the leadership contest (boosting growth), even though it was obvious that her strategy had gone up in flames. And – crucially – she failed to explain why, if the chancellor had to go, she should not quit too.

In so far as she did have an answer to this, it was that she was “absolutely determined to see through what I have promised, to deliver: a higher-growth, more prosperous United Kingdom, to see us through the storm we face”.

https://amp.theguardian.com/politics/2022/oct/14/liz-truss-press-conference-verdict-corporation-tax-kwasi-kwarteng

[muriel_volestrangler]

12. And the rate the government has to borrow at is back to its peak

https://www.marketwatch.com/investing/bond/tmbmkgb-15y?countrycode=bx

and thus mortgage rates.

[Richard_GB]

14. How long will Truss last.

https://www.thelondoneconomic.com/politics/liz-truss-vs-lettuce-337003/