On Friday, October 14th, mere hours after having sacked her finance minister, Kwasi Kwarteng, UK Prime Minister Liz Truss named Jeremy Hunt as his replacement as she walked back her commitment to scrap a planned tax hike for corporations.
Truss, who has been PM for the Conservative Party since September, is engaged in the political fight of her life as she struggles to hold onto her position. Her party is fast losing faith after weeks of turmoil on financial markets, with the pound falling to record lows against the dollar while the Bank of England stepped in to prevent a wider economic crisis. It was in Truss’ best interest, therefore, to course-correct and do it quickly.
Yet, a hastily put together press conference at Downing Street made for a sorry spectacle. During her brief statement, Truss said parts of her mini-budget had gone “further and faster than markets were expecting” which made her forgo the planned ditching of the controversial corporate tax hike to“reassure the markets of our fiscal discipline.”
While Truss claimed she would “always act in the national interest,” and therefore had to act “decisively” to guard the country’s “economic stability,” her demeanor came across as anything but decisive. Indeed, it came across as one of quiet alarm, inspiring little confidence.
Previously Truss, a free-market libertarian, had pledged to scrap Boris Johnson’s corporation tax hike from 19 to 25% in order to promote economic growth. Indeed, it was one of her pledges as she was voted in as the new PM.
Rishi Sunak (Truss’s erstwhile competitor for the premiership title) had originally scheduled the hike for April 2023 when he was Johnson’s finance minister.
That hike will now go ahead as planned—overseen by Jeremy Hunt who had opposed a hike, wanting the corporation tax to be cut down to 15% instead.
Hunt, a member of parliament, is a veteran in politics, having served as foreign secretary and health secretary under David Cameron and Theresa May. He was a candidate in the 2022 Conservative Party leadership elections, but was eliminated in the first round, after which he endorsed Rishi Sunak.
Truss’s 8 minute-long press conference (including questions) also stood out for the highly critical stance observable in its attendant press corps. Even traditionally friendly outlets such as The Telegraph and The Sun pushed against the prime minister for having “junked a key tax cut that got her elected.” ITV’s political editor Robert Peston asked Truss if she “would apologize to her party” for having, as Conservative Chancellor Philip Hammond put it, “totally trashed the Tory Party’s election winning reputation for economic competence.”
A common sentiment was that since the scrapping of a tax hike was the fruit of a Kwarteng-Truss partnership, it seemed unfair that only the former should be sacrificed to save the latter (while some deem it likely to be but a temporary reprieve for the PM).
In response to reporters’ questions, which either cast doubt on her credibility, or pressed her to take responsibility and resign, Truss could do no more than say she was determined “to see through” what she had promised, as she reiterated her desire for high growth.
After only four questions, she hastily ended the conference and walked off stage, leaving behind a bewildered press corps. Her party, let alone the nation, is unlikely to take heart from its PM’s latest performance.
