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A New Chancellor And A Rapid Press Conference- What Is Next For Liz Truss?

Hannah Walton-Hughes

It has been a turbulent ‘honeymoon’ period for Liz Truss and her government, since she took power last month. Since the former Chancellor, Kwasi Kwarteng, announced his mini budget on 23rd September, the markets have been in turmoil, interest rates have been rocketing, and both the public and her party have turned on Truss. Over the last couple of days, many changes have been announced. Kwasi Kwarteng has been sacked, Jeremy Hunt has replaced him, and the PM has announced another dramatic U-Turn on her tax plans. Impact’s Hannah Walton-Hughes reports. 

On Friday morning, it was announced that the then Chancellor was returning early from Washington, where he was in talks with the International Monetary Fund, in order to enter into urgent talks with the PM. This followed speculation about a reversal of some of the measures announced in his mini budget. A few hours later, he was out of Truss’ cabinet. 

Kwasi Kwarteng has since submitted a letter to the Prime Minister, in which he reiterated his continued support for her and her vision. He said it had been an “honour” to serve her, and that her success is “the country’s success”. 

It turned out to be one of the shortest press conferences anyone can remember

Ahead of the sacking of her Chancellor, Liz Truss agreed to a press conference where she answered questions from journalists and reporters. It turned out to be one of the shortest press conferences anyone can remember. The PM only answered a total of four questions, and the entire encounter lasted less than ten minutes. 

Liz Truss opened the press conference with an introductory speech in which she reiterated her previous commitment to delivering a “low tax, high wage, high growth economy.” She commended the energy package that she and Kwasi Kwarteng announced on 23rd September, but recognised that parts of their mini budget went further and faster than markets were expecting.”

Very significantly, the PM confirmed suspicions that she will be U-turning on her policy surrounding corporation tax. Instead of the initial plan to reverse the rise in this tax proposed by the former government, the PM announced that she will be keeping the 6% increase. She stated that this will raise £18 billion per year, which the government can use as a down payment on the medium-term fiscal plan. 

Chris Mason […] questioned what credibility Liz Truss has left

On the subject of the Chancellor, the PM commented that she was “incredibly sorry to lose him”. However, she then went on to announce the appointment of Jeremy Hunt, someone who she believes shares her “convictions and ambitions.” 

The first question came from the political editor of The Telegraph, Ben Riley-Smith. He wanted to know why Liz Truss believed that she should remain as Prime Minister, after a campaign based on tax cuts that she has now U-Turned on. The PM responded that she was “determined to see through what [she had] promised, and that she had acted “decisively to ensure that we have economic stability”.

The pound dropped immediately by 1.2%, following that press conference

The remainder of the questions followed a similar pattern. Harry Cole of The Sun asked why the Chancellor should have to go but not the PM. Chris Mason, political editor of the BBC questioned what “credibility” Liz Truss has left, given everything that has happened over the last few weeks.  

Finally, Robert Peston of ITV quoted former Chancellor Philip Hammond, who stated that Liz Truss has “trashed” the Tories “election-winning reputation for economic competence”, and finished by asking the PM if she will apologise to her party.

Throughout her responses to these questions, the PM repeatedly stated that she always acts in the “national interest”, and that the decisions she has made have all stemmed from wishing to ensure “economic stability”. She also recognised that she and her new Chancellor must deliver a high growth and low tax economy in a different way. 

After these four questions, the PM thanked the attenders, and left the conference room. 

Several Tory MPs have continued to show dissatisfaction with the Prime Minister’s performance

Far from reassuring the markets, many feel that the opposite has seemed to have happened. The pound dropped immediately by 1.2%, following that press conference. Government borrowing costs has also jumped. Furthermore, several Tory MPs have continued to show dissatisfaction with the Prime Minister’s performance and indeed her competence. 

With continued rumblings regarding the PM’s future, only time will tell whether she can survive this storm. 

Hannah Walton-Hughes

Featured image courtesy of Josh Appel via Unsplash Image licence found here. No changes were made to this image.

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