Liz Truss has sacked Kwasi Kwarteng, the Chancellor, as the fallout from his disastrous mini-Budget threatens to destroy her government, the BBC has confirmed.
The Prime Minister will hold a press conference in Downing Street this afternoon, with a number of U-turns on the government’s fiscal policies anticipated. According to the Times, Truss will abandon the cancellation of a rise in corporation tax from 19 to 25 per cent, as well as a number of other measures announced in the mini-Budget on 23 September. The government has already been forced into a humiliating retreat on scrapping the 45p top rate of income tax.
Kwarteng and Truss are long-standing allies and ideological soulmates who share a strong belief in “trickle-down” economics and that Britain should be a low-tax, low-regulation country. It is not yet clear who Truss is lining up as a replacement chancellor but the writing was on the wall for Kwarteng when Downing Street began tearing up the Budget this week while he was in Washington DC meeting with the International Monetary Fund. The announcements of huge tax cuts had caused sterling to plummet and triggered market chaos.
Kwarteng flew back from the US overnight and went straight to Downing Street. His successor will be the fourth chancellor to serve this year, following Rishi Sunak and Nadhim Zahawi, who had a brief spell in office during Boris Johnson’s final days at No 10.
Kwarteng is now second only to Iain Macleod as the shortest-serving Chancellor in history. Macleod, a fellow Conservative, served for almost four years as shadow chancellor under Ted Heath but died after just 30 days in government.
Truss has replaced Kwarteng with Jeremy Hunt, in a desperate bid to steady the government ship.
But speculation is mounting about the Prime Minister’s own future, with many convinced her authority is shot and she cannot continue in Downing Street.
One senior Tory MP told the New Statesman the PM’s days in post were numbered, saying: “She blew it from the first reshuffle. She can sack whoever she wants but it’s her strategy and naivety that is at the heart of this.
“I don’t see how she has any credibility on anything now.”
Should Truss quit in such short order after Boris Johnson’s exit, questions about the Conservative Party’s mandate to govern will ramp up.
Lib Dem leader Ed Davey today demanded a general election, saying “People are angry, fed up and worried about the future. Most of all they are furious that Conservative MPs seem to think this is an acceptable way to conduct the government of our country in these difficult times.
“Enough is enough. It started with Boris Johnson failing our country, and now Liz Truss has broken our economy, it is time for the people to have their say in a general election.”
[See also: Liz Truss and Kwasi Kwarteng’s ideology is colliding with reality]