LONDON — Britain’s brand new finance minister scrapped the remaining elements of Prime Minister Liz Truss’s signature taxation policy on Monday, a move that seemed to successfully reassure markets but left many wondering who is now in charge of the government.
Truss left it to House of Commons leader Penny Mordaunt, another rival, to defend the government’s U-turns in Parliament, where both opposition lawmakers and some mutinous politicians from the ruling Conservative Party are calling on the prime minister to quit after just six weeks in office. It was another disastrous day for Truss.
The first the public heard from her was in a late night BBC broadcast. She said she wanted to “say sorry for the mistakes that have been made” but added that she was “sticking around," and would “lead the Conservatives into the next general election.”
Labour Party leader Keir Starmer pushed the refrain that Truss was “in office but not in power.”
“Where is the prime minister?” Starmer asked rhetorically. “Hiding away, dodging questions, scared of her own shadow.”
Some commentators are speaking about when she goes, not if. One British tabloid is live-streaming a head of iceberg lettuce placed next to a picture of Truss and asking which will last longer.
An editorial in the Sunday Times declared: “Truss has wrecked the Conservative Party’s reputation for fiscal competence and humiliated Britain on the international stage.”
“Senior Tories must now act in the national interest and remove her from Downing Street as quickly as possible,” the editorial continued, while also calling Hunt the “de factor prime minister.”
Hunt is a moderate Conservative who is considered to be a safe pair of hands, though he has twice lost contests to lead his party. He assured the country that Truss was “in charge.”
“It is the most challenging form of leadership to accept the decision you have made has to be changed,” he told Parliament. “And the prime minister has done that, and she has done so willing because she understands the importance of economic stability, and I respect her for it.”
Truss was installed at Downing Street as the choice of 160,000 dues-paying members of the Conservative Party — about 0.3 percent of the population. The growth-through-tax-cuts plan that helped propel her candidacy, and prompted admiring comparisons to Margaret Thatcher, has now been thoroughly gutted.
Tax cuts for the wealthy didn’t go down well with a public that is facing record inflation and soaring bills. But the government’s about-face had far more to do with bond traders, who were spooked by the level of borrowing the plan would require.
Hunt came in after two of the most controversial parts of the plan had already been scrapped. And still he pumped the brakes hard, stressing that the debt and spending would be new watchwords.
“We will reverse almost all the tax measures announced in the growth plan three weeks ago,” Hunt said. “There will be more difficult decisions, I’m afraid, on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term.”
Hunt also announced that the government’s popular plan to help with energy bills for households — a “landmark policy supporting millions of people through a difficult winter” — will not continue for two years but last only until April. The government will then move to a “new approach” that will “cost the taxpayer significantly less.”
The markets have been receptive to the government’s backtracking. The falling British pound has stabilized. The country’s leading stock index, the FTSE 100, was up. And the cost of government borrowing was coming down — though still higher than it was before Truss took over.
But British politics remains in turmoil.
Although there is no general election in sight, two polls published Monday showed the Labour Party more than 30 points ahead of the Conservatives.
“Who voted for this?” signs have been popping up at protests and in opposition lawmakers’ social media feeds.
There is hand-wringing among the Conservatives, too.
“Her position politically is utterly untenable,” said Jonathan Tonge, a professor of politics at the University of Liverpool. “In any sensible democracy she would have gone by now.”
“She campaigned on a platform of tax cuts, a dash for growth and supply-side reform — every element of that was dismantled by Jeremy Hunt,” he said. If Truss survives, “it’s only because Conservative Party grandees can’t agree on a replacement.”
The Conservatives are known for ruthlessly jettisoning their leaders. Boris Johnson won them a landslide victory in the 2019 general election, but after scandals — and a Conservative tailspin in the polls — he was forced to resign. Truss’s personal poll ratings are worse than Johnson’s ever were, and her party’s poll ratings have nosedived.
People would look “pretty askance” if the party staged another leadership contest so soon, Damian Green, a prominent Conservative, acknowledged on BBC Radio 4. But asked if he wanted Truss to be leading the party when the next general election happens, Green offered only backhanded support. “If she leads us into the next election, that will mean that the next two years have been a lot more successful than the past four weeks have been.”
Getting Conservatives to rally around someone to replace Truss may indeed be a challenge.
Although Hunt has taken on a powerful role, he’s hardly a rising star within the party. He was soundly beaten by Boris Johnson in the 2019 Conservative Party leadership contest and was eliminated in the first round of voting this past summer after getting just 18 votes from fellow lawmakers.
A wing of the Conservatives would like to see the top job going to former finance minister Rishi Sunak, the runner-up in the summer’s leadership contest. Many of his economic predictions have turned out to be prescient. But he is disliked by Johnson loyalists, who accuse him of leading the revolt that brought down the last prime minister. And Conservative lawmakers may invite other problems if they overrule the party’s grass roots by promoting Sunak.
Mordaunt, who is more popular with the grass roots, has been discussed as another contender. She wrote in the Sunday Telegraph, however, that this was not the time to change prime ministers. “Our country needs stability,” she said, “not a soap opera.”
Over the weekend, President Biden was asked by a reporter what he thought of Truss’s “trickle-down plan that she had to walk back from.”
Usually, U.S. presidents don’t comment on an ally’s budget, but Biden weighed in, saying: “Well, it’s predictable. I wasn’t the only one that thought it was a mistake.”
He added: “I think that the idea of cutting taxes on the super wealthy at a time when — anyway, I just think — I disagreed with the policy, but that’s up to Great Britain to make that judgment, not me.”