Prime Minister Liz Truss has ditched her plan to hire a dynamic senior official to shake-up the Treasury and lead a sweeping overhaul of U.K. economic policy, in a sign that a crisis of confidence has gripped her faltering, month-old administration.
In what insiders said was a panic move, Truss at the weekend overruled her Chancellor Kwasi Kwarteng over the appointment of the new chief official in the Treasury, a vital decision amid mounting unease over the government’s handling of the economy.
As soon as they took office last month, Truss and Kwarteng fired the long-serving permanent secretary to the Treasury, Sir Tom Scholar, apparently wanting fresh leadership at the top of Whitehall’s most powerful department.
Kwarteng and Truss had been preparing to name Antonia Romeo — the highest profile business-facing official in government — as Scholar’s replacement. Her mission was to have been to drive through an overhaul of what Truss’s team had disapprovingly called “Treasury orthodoxy” in order to deliver rapid growth.
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Kwarteng and his team had even privately named Romeo as his first choice for the role, with Truss’ apparent agreement. But the embattled prime minister, reeling from a succession of self-inflicted crises, backtracked on the plan and appointed James Bowler, a former Treasury insider, instead.
People familiar with the process said Truss “panicked” over the appointment after the government’s tax-cutting mini-budget bombed, triggering a massive selloff in the currency and bond markets.
The people said Romeo had been offered and had accepted the role last week. Transition arrangements in preparation for her arrival at the Treasury were already under way before the prime minister’s U-turn, according to the people, who asked not to be named discussing confidential matters.
The chaotic process risks further undermining Truss’ reputation for competence and eroding the government’s already damaged credibility on its handling of the economy. It also leaves open huge questions over what happens to Truss’ personal pledge to deliver “growth, growth, growth” .
Truss and Kwarteng’s decision to push Scholar out last month provoked dismay from senior figures in Westminster and Whitehall, including former chancellors and two ex-cabinet secretaries.
They might have got away with it had their first fiscal announcements not been a disaster. The Bank of England had to intervene to stabilise the market turmoil, pledging to buy up government debt in order to stem spiralling borrowing costs.
Last week, amid a growing political backlash from within the ruling Conservative party, Truss decided to reverse Kwarteng’s plan to cut the 45p top rate of income tax for the highest earners.
Her decision to overrule him again will raise further doubts about the status of their working relationship. Asked repeatedly by broadcasters last week whether she trusted her chancellor in the wake of the budget chaos, Truss refused to say that she did.
After news broke Monday of Bowler’s appointment, No. 10 officials insisted the decision was taken jointly by the PM and chancellor. While Truss rates Romeo highly, Bowler was judged to be the best person for the job given his Treasury background, according to government aides.
The PM’s spokesman denied that the government was in chaos after the mini-budget, adding that Truss was “confident” in the measures she has announced to boost growth and support people through winter.
Both Romeo, who runs the Ministry of Justice, and Bowler, who is the top official at the Department for International Trade, were well qualified for the position, as long-standing civil servants with experience running government departments.
Some media reports suggested Romeo would not have been universally welcomed in the Treasury because she was seen as a disruptor. However, one senior Whitehall official said Romeo would have brought more drive and commercial experience than Bowler to the role. She has worked as a diplomat drumming up business for the U.K. in New York and set up the Department for International Trade, running it as permanent secretary for four years before Bowler took over last year.
"It's a shame. Antonia would have brought a lot of energy, great drive and leadership, with a more commercial perspective," the official said. "James is a good guy, very sensible" and is embedded in "classic Treasury orthodoxy" due to his long career in the economic department, the official said. Bowler's record at the Treasury stretches back to 2005, when he was principal private secretary to Labour's chancellor at the time, Gordon Brown.
"Something strange seems to have happened. She was appointed and then not," said the senior official, who asked not to be named because they were not authorized to speak publicly. "Whether it's panic or not I don't know."
In the official announcement, Kwarteng said he was “delighted to welcome James back to the Treasury.”
The recruitment process was led by Simon Case, the Cabinet Secretary, the country’s most senior, politically impartial official who is in charge of the civil service. Officially, he made the appointment, with the approval of Truss and the agreement of Kwarteng, according to the government’s press release.
This article has been updated with more details, including the government statement confirming the announcement.
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2022-10-10 14:16:48Z
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