Unexpectedly, Kwarteng returned to London from Washington DC on Thursday evening for an emergency meeting with Truss. The prime minister plans to withdraw much of Kwarteng’s controversial mini-budget again, this time vowing to cancel the planned corporate tax hike. He will be addressing the press about this later today. With the budget adjustment, little remains of the economic policy of the Truss cabinet, which took office in early September. Truss campaigned for the Conservative Party leadership election and promised to cut taxes.
In a resignation letter addressed to Truss, Kwarteng continues to support his financial policy. “Following the status quo was simply not an option,” he writes. “This country has been haunted by low growth rates and high taxes for too long: this has to change if this country is to be successful.” He writes that he appreciates their friendship and hopes his successor will stick to the course he and Truss have taken.
Jeremy Hunt was immediately named the new finance minister on Friday afternoon. He is the fourth person in three months to fill that position. Hunt previously headed the ministries of foreign affairs, culture and health.
Position truss
Kwarteng’s departure makes Truss’s premiership very unstable. Truss and Kwarteng have been good friends and soul mates for years. The budget, which sparked a bond market uprising, was a joint project. It is not clear how Truss can recover from this political defeat. The departure of a finance minister (official title: The Second Lord of the Treasury) usually has major consequences for the Prime Minister (the Prime Lord of the Treasury). In early July, the resignation of Treasury Secretary Rishi Sunak led to the downfall of Boris Johnson.
A coup is already underway within the Conservative Party, with Rishi Sunak proposed as prime minister. This former treasury secretary has often warned about Truss’s radical plans and was his main challenger in the leadership election.
