British Prime Minister Liz Truss. /
‘Tory’ politicians raise the succession of the prime minister while awaiting the response of the bond market to the change of economy minister
Bond market watchdogs are taking note of all the reassurances of sanity being issued by the new UK Chancellor of the Exchequer, Jeremy Hunt, but no one is taking his answer for granted, come Monday morning when the markets open. “This is not over at all,” a financial system analyst warned this Sunday.
Hunt has recognized, in an interview with the BBC, that “politicians cannot control the markets”, but “what we can do is talk honestly about difficult decisions”. He acknowledged that he has not yet announced any decision. He promises that “all issues are on the table”, clarifying that he wants “people to separate that we are going to make those difficult decisions”.
The ‘Sunday Times’ published that Hunt intends to eliminate the advance reduction, from 20% to 19%, of income tax for taxable income between 14,500 and 58,000 euros. It is a measure that affects 31 million Britons. Former Minister Rishi Sunak promised it for 2024 as compensation for higher other taxes, and Truss and Kwarteng advanced it to 2023.
Hunt and Truss met until 4:00 p.m., Spanish time, at the country residence of the head of government, but, after their first long meeting since Friday, its content was not disclosed. The prime minister published an article in ‘The Sun’ repeating that she intends to continue leading the government and implementing the rest of her program.
A notable mistake of the Liz Truss and Kwasi Kwarteng duo with the mini-budget that caused a financial crisis was their contempt for the institutions: the Treasury, the Bank of England and the Office for Budget Responsibility. The central bank eventually forced Minister Kwarteng’s dismissal and Truss’s abandonment of some tax cuts.
What does Truss now offer to the outside world? A Cabinet presided over by her, with a moderate Economy Minister, in favor of the permanence of the United Kingdom in the European Union, who supported Sunak in the campaign to replace Boris Johnson and whose dismissal or resignation would undoubtedly bring down the Government. That strange couple is surrounded by ministers, except for Defense Minister Ben Wallace, chosen by Truss because they voted for ‘Brexit’ and for her.
Crispin Blunt, a somewhat eccentric Conservative MP, was the first to state publicly that “the game is up” and that succession needs to be arranged. Others followed. George Osborne, the former finance minister who failed to convince his friend, David Cameron, not to call the ‘Brexit’ referendum, believes that Truss will not make it to the end of the year as head of government.
“Decline Management”
Polls show voter disappointment with Truss and the Conservative Party, but the internal battle is not over. In the ‘Sunday Telegraph’, the triumph of critics of the prime minister’s plan was lamented, and especially the apparent return to ‘management of decline’. It is an idea that is seven decades old and based on the perception that the UK has to accommodate its general decline in its post-imperial time.
Increase in taxes -Sunak had raised them to levels of seventy years ago- and regulations. The expansion of an inefficient public sector for a passive population. entrenched regional divisions. A demography that darkens the present and the future of young people. A standard of living financed by growing debt. Government in permanent instability and with extremist outbreaks. “We are becoming Italy,” lamented Matthew Lynn.
The reformer and ‘brexiter’ spirit of Truss and Kwarteng has faded and Hunt promises stability. But the incipient battle for control of the parliamentary group will affect the Cabinet. A stable Conservative Party does not seem possible in the coming weeks. Labor calls for the calling of elections, but the ‘Tories’ cannot jump into the void. There is no Mediterranean sun or gelato.
