Ousted chancellor Kwasi Kwarteng tips Liz Truss out too in ‘a few weeks’

Ousted chancellor Kwasi Kwarteng believes the British leader bought herself just ‘a few weeks’ because the ‘wagons are circling’ her premiership.

Sacked chancellor of the exchequer Kwasi Kwarteng and Britain's Prime Minister Liz Truss at the recent annual Conservative Party Conference in Birmingham. In an exchange of letters with Ms Truss, Mr Kwarteng hinted at the disagreement that led to his departure, defending his budget and saying that the ‘status quo was simply not an option’. Picture: AFP

Kwasi Kwarteng believes Liz Truss has bought herself just “a few weeks” by sacking him and reversing her budget because the “wagons are circling” on the end of her premiership.

The British Prime Minister mounted a desperate attempt for survival on Friday as she told her chancellor (treasurer) that he had to go to restore market confidence and also reversed her pledge to freeze corporation tax.

New Chancellor of the Exchequer, Jeremy Hunt, on Saturday in a TV interview. Picture: Getty Images

In a sign of her political weakness she turned to the former foreign secretary, Jeremy Hunt, a Rishi Sunak supporter who was excluded when she named her cabinet last month, to succeed Mr Kwarteng as chancellor.

Mr Hunt will now have to draw up plans to balance the government books before a fiscal statement at the end of the month. Forecasts by the independent Office for Budget Responsibility are said to be “dire” and suggest there will be a £60 billion ($109 billion) hole in the public finances by 2026-27.

Ms Truss’s decision to raise corporation tax next year from 19 per cent to 25 per cent will raise £17 billion, meaning that public cuts of up to £40 billion will still be required to balance the books. Officials believe that this will make untenable Ms Truss’s claim that there will be no return to austerity.

Ms Truss said on Friday that she would not resign, arguing she “acted decisively” to ensure the country’s economic stability.

“I am absolutely determined to see through what I have promised,” she said. She admitted, though, that the country was facing a financial “storm” triggered by market reaction to the government’s tax-cutting plans.

“I want to be honest, this is difficult,” she said. “But we will get through this storm and we will deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.”

Mr Kwarteng became the second shortest-serving chancellor, having served for 38 days. The Prime Minister asked him to stand aside at a meeting on Friday morning UK time after he flew back earlier than planned from talks at the International Monetary Fund in the United States. He learnt he was being dismissed after reading a report by The Times as he was being driven to Downing Street.

Mr Kwarteng believes Ms Truss’s policy reversal and decision to sack him is unlikely to be enough to save her premiership. “Kwasi thinks it only buys her a few more weeks,” a source said. “His view is that the wagons are still going to circle.”

Even inside Downing Street senior officials believe it is a matter of time before she is forced out of office.

“Senior civil servants are now openly talking about her going,” one Whitehall source said. “They think she’s had it.”

Liz Truss at her press conference in the Downing Street briefing room after the sacking. Picture: Pool / AFP i

Ministers and Truss-supporting Conservative MPs also expressed doubts about how long she could survive. One cabinet minister said it looked as though Ms Truss had “given up” while another warned that the government was “hitting a state of paralysis” quickly.

In the coming week Tory rebels will co-ordinate the submission of letters to Sir Graham Brady, chairman of the 1922 Committee of MPs, to give him a mandate to change the rules and remove Truss. They want a “unity” candidate to replace Truss, although there is little agreement on who it should be.

Chris Loder, who backed Ms Truss for the leadership, told the BBC he hoped she would be able to continue but added: “I get the feeling from the parliamentary party and a number of her supporters that it is actually quite difficult at the moment.”

Sir Christopher Chope, also a Truss supporter, said he felt “grave disappointment” after her policy reversals.

Veteran Tories also suggested her premiership was coming to an end. Lord Hague of Richmond, a former party leader, told Times Radio: “It’s been a catastrophic episode and I think it [Truss’s position] hangs by a thread.”

In an exchange of letters with Ms Truss, Mr Kwarteng hinted at the disagreement that led to his departure, defending his budget and saying that the “status quo was simply not an option”.

The Times