A number of Conservative MPs claimed on Wednesday that UK chancellor Kwasi Kwarteng cannot survive the market turmoil unleashed by his new economic plan, with one former cabinet minister saying “I think he’s dead”.
Tory MPs were despairing after another day of market chaos, with the Bank of England announcing plans to buy government bonds, effectively to defend the economy from Kwarteng’s own policy.
Some MPs claimed that UK prime minister Liz Truss was trying to distance herself from Kwarteng’s economic strategy, even though she was instrumental in devising the plan of debt-funded tax cuts worth £45bn.
Truss has not made a public statement since the market turmoil began and there have been tensions between the prime minister and Kwarteng over how to handle it. Kwarteng’s allies said the chancellor would not quit.
But one former cabinet minister told the Financial Times that Kwarteng could not survive the fallout: “I think he’s dead, but in the Tory party death can take many forms. It can take a long time.”
Another Tory MP, who is a member of the government, said: “Liz has a pretty quick choice to make: either she bullets her chancellor and changes course, or she could lose her premiership within a month.
“She will struggle to get any legislation through parliament unless she changes course because we won’t vote for it. We won’t ever get to vote on this package because the markets will destroy it first.”
MPs have to vote on a finance bill in order to implement parts of the fiscal package, although no date has yet been set, but ill-feeling could also spill over into wider ill-discipline during other contentious votes.
Truss will be loath to lose her chancellor, who is an old friend. Both she and Kwarteng have insisted that they will stick to the course they have set out of tax cuts and supply-side reforms intended to boost growth.
Kwarteng’s allies declined to comment on the criticism being aimed at him and the chancellor was on Wednesday holding talks with banks about future City of London reforms, a sign that he sees business continuing as usual.
Most Tory MPs remain disciplined and are refusing to criticise the government publicly, not least since the party chose a new leader only three weeks ago.
Kwarteng told City leaders on Tuesday he was “confident” his policies would work and was preparing to roll out new supply-side reforms, including on City regulation, childcare and digital technology.
“We don’t want blue on blue attacks at a moment like this,” said one senior Tory MP.
If Truss were to remove her chancellor, it would leave her exposed and be a clear political admission of economic incompetence. But some Conservative MPs claim that Truss is subtly trying to distance herself from the unfolding chaos.
They say that in a briefing note to Tory MPs, the £150bn state energy support plan was described as “the prime minister’s energy package”, while the controversial tax-cutting “mini” Budget was described as “the chancellor’s growth plan”.
Truss and Kwarteng disagreed on Monday on whether the Treasury and BoE should issue statements to reassure the markets, Tory insiders said. They added that 10 Downing Street was much more relaxed about the market chaos than the Treasury and wanted to ride out the storm.
Ultimately, the BoE announced it would “not hesitate” to raise interest rates and Kwarteng released a statement saying he would produce a debt-cutting plan on November 23. However, senior City figures warned the chancellor on Wednesday that date was too far away.
Allies of Truss insisted that she fully supported Kwarteng and his growth plan, describing talk of tensions as “nonsense”. One said: “They’re in lockstep.”
Truss herself is feeling the heat. One member of the 1922 backbench committee of Conservative MPs speculated that at least 10 letters of no confidence had gone in already.
“Next week at conference they need to show they can dig us out of this hole or it’s terminal for her,” the MP said, referring to the upcoming Tory party conference in Birmingham. “They’ve behaved like an Oxbridge debating society, it’s just idiotic.”
A former minister said that “MPs won’t stand idly by” if Labour maintained a large poll lead. This week YouGov gave the opposition party a record 17-point lead over the Conservatives.
But one veteran Tory MP advised caution. “People aren’t stopping to think for a second about how ludicrous that would look, how we would be the laughing stock of the world if we tried to get rid of her now,” he said.
Rishi Sunak, the former chancellor and Tory leadership contender who predicted market chaos if Truss pursued unfunded tax cuts, is not expected to attend the party’s conference.
But his former supporters are starting to criticise the new administration. Mel Stride, Tory chair of the Commons Treasury committee, said he could not understand why Kwarteng promised “more to come” on tax cuts, even as markets recoiled from the borrowing required to fund the first batch.
Some Tory grandees have defended Kwarteng against criticism from the IMF. Lord David Frost, former Brexit secretary, said the IMF was wedded to policies that led to slow growth and weak productivity.
Lord Daniel Hannan, writing for the website ConservativeHome, said the sterling sell-off was not caused by unfunded tax cuts, but by a “belief that this Budget has made a Labour victory more likely”.
Tory-supporting media outlets have sought others to blame. “Fury at the City slickers betting against UK plc,” was the Daily Mail’s front-page headline on Tuesday.
Some Tory MPs believe Truss could make a start by reversing one of the most contentious tax cuts in last week’s package: the abolition of the 45p additional income tax rate for earnings of more than £150,000.
Cabinet sources said the plan was not revealed to them before Kwarteng announced it. Kwarteng’s allies declined to comment on the topic. One Tory MP from a northern seat said: “We all wanted tax cuts, but no one on 150k a year has ever complained to me about their 45 per cent tax rate.”
https://news.google.com/__i/rss/rd/articles/CBMiP2h0dHBzOi8vd3d3LmZ0LmNvbS9jb250ZW50L2E0NmU1M2JiLWUyM2QtNDQ1MC1hNzBlLTA1ZjcxZDJlNTdlZtIBAA?oc=5
2022-09-28 16:48:24Z
1580114558
Tidak ada komentar:
Posting Komentar