Britain’s finance minister, Kwasi Kwarteng, faces possible dismissal from office.
Mr Kwarteng, has cut short his visit to the US for urgent talks in Downing Street, with a reversal of the mini-budget on the table. He makes way to the UK from Washington DC after days of open revolt among Tory MPs over his economic plan.
Steven Swinford, Political Editor of The Times in a tweet stated that: “I’m told that Kwasi Kwarteng is being sacked as Chancellor as Liz Truss prepares to reverse the mini-Budget. Not clear who will be replacing him”.
British Prime Minister Liz Truss will hold a press conference later today, October 14, 2022, amid reports that her government was preparing to announce a reversal of planned tax cuts.
Mr Kwarteng had been in Washington DC for a meeting of global finance ministers at the International Monetary Fund’s (IMF) annual meeting. Speaking about the change in his travel plans, a source close to the chancellor stated that he “really wants to engage not only with government colleagues, but also MPs” over the financial plans.
Prime Minister, Liz Truss, on another breath, is facing calls to change her plan to calm market turbulence and reassure her party.
‘No 10’ downplayed speculation of imminent changes to the plan after reports suggested parts may be ditched. However, a Downing Street source revealed that the Prime Minister is of the opinion that the chancellor is “doing an excellent job and they are in lockstep”.
Tensions among Tory MPs over budget cuts
Tory MPs on the other hand, reckon a further change of plan is inevitable, following a previous U-turn on Ms Truss’s plan to scrap the top rate of income tax. Other Tory MPs suggested either the chancellor resigns or the prime minister is ousted.
Additionally, some Tory MPs commented that Rishi Sunak and Penny Mordaunt as replacements for Kwasi Kwarteng will be ideal. In a tweet that laid bare Tory tensions, former cabinet minister, Nadine Dorries, accused those agitating for the removal of Ms Truss of plotting to “overturn democracy”.
Mr Kwarteng’s mini-budget in September, included £45bn of tax cuts, funded by borrowing, which spooked financial markets and prompted a drop in the value of the pound. He was forced to scrap plans to cut the top rate of income tax, which made up just £2bn of the package.
The unstable market however, prompted an intervention from the Bank of England, which involved buying government bonds to stabilise their value.
The Bank indicated that it is withdrawing that programme of emergency support as planned on Friday, October 14, 2022. But the pound has recovered in value following speculation in Westminster that another U-turn was in the offing.
A key plank of Ms Truss’s Tory leadership pitch was ditching the rise to the tax, which was set to increase from 19% to 25% in 2023. If the government does announce changes to its plans, it is not clear when this might happen.
Mr Kwarteng is hower due to make a financial statement on October 31, but he may be forced to act much sooner than that, if the markets and the mood among Tory MPs goes against him.
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