Unexpectedly, Kwarteng had flown back to London from Washington DC on Thursday evening for an emergency meeting with Truss. The prime minister planned to withdraw much of Kwarteng’s controversial mini-budget again, this time promising to undo the planned corporate tax hike. She will address the press about this later today. With the budget adjustment, little remains of the economic policy of the Truss cabinet, which took office at the beginning of September. Truss has campaigned in the run-up to the Conservative Party leadership election promising to cut taxes.
In a letter of resignation addressed to Truss, Kwarteng continues to support his financial policy. “Following the status quo was simply not an option,” he writes. “This country has been haunted by low growth rates and high taxes for too long – this has to change if this country is to succeed.” He writes that he appreciates their friendship and hopes that his successor will stick to the course he and Truss have embarked on.
On Friday afternoon, Jeremy Hunt was immediately appointed as the new Minister of Finance. He is the fourth person in three months to hold that post. Hunt previously headed the Ministries of Foreign Affairs, Culture and Health.
Position Truss
Kwarteng’s departure makes Truss’s premiership very unstable. Truss and Kwarteng have been good friends and soul mates for years. The budget, which caused an uproar in the bond market, was a joint project. It is unclear how Truss can recover from this political defeat. The departure of a Minister of Finance (official title: The Second Lord of the Treasury) usually has major consequences for the Prime Minister (the First Lord of the Treasury). In early July, the resignation of Treasury Secretary Rishi Sunak led to the fall of Boris Johnson.
A coup is already being prepared within the Conservative Party, with Rishi Sunak being put forward as prime minister. This former Treasury Secretary has often warned about Truss’ radical plans and was her main challenger in the leadership elections.