Is Prime Minister Liz Truss still in charge of the British government?

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LONDON – Britain’s newly appointed Chancellor of the Exchequer on Monday scrapped the remaining elements of Prime Minister Liz Truss’ signature tax policy, a move that appeared to have been successful in reassuring markets, but many have wondered who is now in charge of the government.

Truss stood on the sidelines as Jeremy Hunt — a political rival who was tapped for the top cabinet post on Friday — announced that the government would not cut taxes, but instead raise them.

Truss left it to the leader of the House of Commons, Penny Mordaunt, another rival, to defend the government’s turnaround in parliament, where opposition lawmakers and some mutinous politicians from the ruling Conservative Party are calling on the prime minister to step down after just six weeks in the office. It was another disastrous day for Truss.

Liz Truss fires Chancellor of the Exchequer and reverses policies that made the British pound fall

Labor Party leader Keir Starmer insisted on the chorus that Truss was “in office, but not in power”.

“Where’s the Prime Minister?” Starmer asked rhetorically. “Hide, dodge questions, afraid of her own shadow.”

Some commentators talk about when she goes, not if. A British tabloid is live-streaming a head of iceberg lettuce placed next to a photo of Truss, asking which one will last longer.

A Sunday Times editorial stated: “Truss has destroyed 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 soon as possible,” the editorial continued, also calling Hunt the “the prime factor.”

Hunt is a moderate conservative who is considered a safe pair of hands, although he has lost twice to lead his side. He assured the country that Truss was “in charge.”

“It is the most challenging form of leadership to accept that the decision you have made needs to be changed,” he told parliament. “And the Prime Minister has done that, and she has done so willingly because she understands the importance of economic stability, and I respect her for that.”

Why is Britain comparing its prime minister to a lettuce?

Truss was installed in Downing Street as the choice of 160,000 dues-paying Conservative Party members – about 0.3 percent of the population. The tax-cutting growth plan that propelled her candidacy and sparked admiring comparisons to Margaret Thatcher has now been thoroughly brushed aside.

Tax cuts for the wealthy have not been welcomed by a public faced with record inflation and skyrocketing bills. But the government’s turnaround had much more to do with bond traders, who feared the amount of loans the plan would require.

Hunt came in after two of the most controversial parts of the plan had already been scrapped. And still he pressed the brakes hard, stressing that debt and spending would be new keywords.

“We will roll back almost all of the tax measures announced in the growth plan three weeks ago,” Hunt said. “I fear that tougher decisions will be made, both in terms of taxes and spending, as we deliver on our commitment to reduce debt as a part of the economy over the medium term.”

Hunt also announced that the government’s popular plan to help with household energy bills – a “landmark policy that will support millions of people through a difficult winter” – will not last for two years, but will only last 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 withdrawal. The declining British pound has stabilised. The country’s leading stock index, the FTSE 100, rose. And the cost of government borrowing fell — though still higher than before Truss took over.

But British politics remains in turmoil.

While no general election is in sight, two polls published Monday showed the Labor party more than 30 points ahead of the Conservatives.

“Who voted for this?” signs have surfaced in protests and in opposition lawmakers’ social media feeds.

Even among the Conservatives there is hand hurt.

“Her political position is completely untenable,” said Jonathan Tonge, a professor of politics at the University of Liverpool. “In any sensible democracy, she would have left long ago.”

“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 leaders can’t agree on a replacement.”

The conservatives are known for relentlessly throwing their leaders overboard. Boris Johnson won them a landslide victory in the 2019 general election, but was forced to resign after scandals – and a conservative downturn in the polls. Truss’s personal polls are worse than Johnson’s ever, and her party’s polls have been snowed under.

People would look “pretty suspicious” if the party were to organize another leadership contest so soon, Damian Green, a prominent conservative, admitted on BBC Radio 4. But when asked if he wanted Truss to lead the party in the next general election , Green offered only backhanded support. “If she leads us into the next election, that means the next two years have been a lot more successful than the last four weeks.”

Getting Conservatives to gather around someone to replace Truss can indeed be a challenge.

Although Hunt has taken on a powerful role, he is hardly a rising star within the party. He was soundly defeated by Boris Johnson in the 2019 Conservative Party leadership contest and was eliminated in the first round of voting last summer after getting just 18 votes from fellow lawmakers.

A wing of the conservatives would like to see the top job go to former finance minister Rishi Sunak, who took second place in this summer’s leadership contest. Many of his economic forecasts have proved prescient. But he hates Johnson loyalists, who accuse him of leading the rebellion that toppled the last prime minister. And conservative lawmakers can cause other problems if they overrule the party’s grassroots by promoting Sunak.

Mordaunt, who is more popular with the base, has been discussed as another contender. However, she wrote in the Sunday Telegraph that this was not the time to switch 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’ “trickle-down plan that had her back off.”

Usually US presidents don’t comment on an ally’s budget, but Biden weighed in, saying, “Well, it’s predictable. I wasn’t the only one who thought it was a mistake.”

He added: “I think the idea of ​​cutting taxes on the super-rich came at a time when I – anyway, I just think – disagreed with the policy, but that’s up to Britain to that to judge, not up to me.”

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