• Tuesday, February 20, 2024

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You have asked me to stand aside as your Chancellor. I have accepted: Kwarteng to Truss

Kwasi Kwarteng is the country’s shortest serving chancellor since 1970, and his successor will be the fourth finance minister in as many months in Britain.

Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng (Photo by Stefan Rousseau – WPA Pool/Getty Images)

By: Mohnish Singh

British finance minister Kwasi Kwarteng confirmed on Friday he had been sacked by Prime Minister Liz Truss, becoming the third chancellor to leave the government this year.

“You have asked me to stand aside as your Chancellor. I have accepted,” Kwarteng said in a letter to Truss, which he published on Twitter.

His removal comes after media reported he was being sacked before a news conference by Truss when she is expected to scrap parts of their economic package in a bid to survive the market and political turmoil gripping the country.

“It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches,” Kwarteng said.
Kwarteng is the country’s shortest serving chancellor since 1970, and his successor will be the fourth finance minister in as many months in Britain, where millions are facing a cost of living crisis. The British finance minister with the shortest tenure died.

Kwarteng had announced a new fiscal policy on Sept. 23, delivering Truss’s vision for vast tax cuts and deregulation to try to shock the economy out of years of stagnant growth.

But the response from markets was so ferocious that the Bank of England had to intervene to prevent pension funds from being caught up in the chaos, as borrowing and mortgage costs surged.

The duo have since been under mounting pressure to reverse course, as polls showed support for their Conservative Party had collapsed, prompting colleagues to openly discuss whether they should be replaced.

Having triggered a market rout, Truss now runs the risk of bringing the government down if she cannot find a package of public spending cuts and tax rises that can appease investors and get through any parliamentary vote in the House of Commons.

Her search for savings will be made harder by the fact the government has been cutting departmental budgets for years.

At the same time the Conservative Party’s discipline has all but broken down, fractured by infighting as it struggled first to agree a way to leave the European Union and then how to navigate the COVID-19 pandemic and grow the economy.

“If you can’t get your budget through parliament you can’t govern,” Chris Bryant, a senior lawmaker from the opposition Labour Party, said on Twitter. “This isn’t about u-turns, it’s about proper governance.”

(Reuters)

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