Hunt takes control: New chancellor leads 'silent coup' against Truss

Hunt takes control: New chancellor leads ‘silent coup’ to destroy Trussonomics as he axes 1p cut to income tax in bid to calm the economy after saying PM ‘went too far, too fast’ – while Tories ‘plot to replace Liz Truss with Ben Wallace’

• Jeremy Hunt has warned Britons of ‘very difficult decisions’ ahead as he attempts to restore trust in the Tories 
• He’s been accused of leading a ‘silent coup’ against Prime Minister Liz Truss on his first full day back in the job
• He conceded the Government went ‘too far, too fast’ with its mini-budget and will delay 1p income tax cut
• Former Health Minister said Ms Truss should now be seen as the chairman, while Mr Hunt is chief executive 

New Chancellor Jeremy Hunt has been accused of leading a ‘silent coup’ after he effectively took control of the Government and ditched the last remaining major plank of Liz Truss’s new economic plan.

Amid claims that Tories are still plotting to replace the Prime Minister, Mr Hunt is expected to follow up her Friday climbdown on increasing Corporation Tax by axing the mini-Budget’s plan to cut the basic rate of income tax by 1p to 19p.

He warned Britons of ‘very difficult decisions’ ahead as he attempts to restore trust in the Tories and balance the books.

The Chancellor, who spent Saturday also meeting with Treasury officials, insisted that he and the Prime Minister were a ‘team’ – but said she and sacked former Chancellor Kwasi Kwarteng went ‘too far, too fast’.

Within a day of taking the keys to No11 the new chancellor’s actions mean none of the three main strands of the ‘Trussonomics’ package from just three weeks ago remains. As well as Friday’s Corporation tax reversal – it will now rise from 19 per cent to 25 per cent – the decision to axe the 45p income tax rate for the highest earners was embarrassingly reversed during the Conservative Party Conference.

Mr Hunt is expected to delay the 1p income tax cut by  12 months in a bid to save the Treasury £5 billion a year. The plan to reduce the basic rate of income tax from 20 per cent to 19 per cent was due to roll out in April next year and will save 31 million taxpayers up to £360 annually.

In a statement released late on Saturday, he said: ‘My focus is on growth underpinned by stability. The drive on growing the economy is right – it means more people can get good jobs, new businesses can thrive and we can secure world class public services. But we went too far, too fast.

‘We have to be honest with people and we are going to have to take some very difficult decisions both on spending and on tax to get debt falling, but at the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people.

‘I will set out clear and robust plans to make sure Government spending is as efficient as possible, ensure taxpayer money is well spent and that we have rigorous control over our public finances.’

But MPs suggested his appointment and decisions could be the final nail in the coffin for Ms Truss’s short period in power.

One senior Tory MP who backed Truss said: ‘Appointing him is like putting up the white flag outside the door.

‘She’s swapped the job of Prime Minister for Foreign Secretary because that’s the only thing she’ll have any authority over.

‘Members will think, ”We voted for tax cuts. Now we’ve got tax rises and austerity.” What is the point of Liz Truss if her policies are reversed? It’s not like she’s a good communicator.’

Reports today suggest Ben Wallace, the respected Defence Secretary, is being lined up as a possible PM, with Rushi Sunak as chancellor. 

New Chancellor Jeremy Hunt has warned Britons of ‘very difficult decisions’ ahead as he attempts to restore trust in the Tories and balance the books

Wallace v Sunak: Rebels urge Defence Secretary to stand for leader

When Ben Wallace pulled out of the Conservative leadership contest in July, he had already built a campaign team and secured the support of more than 25 MPs. But strains in his domestic life led him to conclude that the pressures of the job would have too great an impact on his family.

But friends say the Defence Secretary has now become much less categoric’ about not running, after being approached by colleagues to stand in any possible contest.

Mr Wallace, who regularly tops the rankings among Tory party members, is ‘rethinking’ his position because he believes that Rishi Sunak, the favourite to succeed Liz Truss, ‘cannot unite the party’.

‘Most of us now favour a coronation for Ben. He’s the best we’ve got,’ one plotter told the Sunday Mirror.

‘But he might need some persuading to take the job. And getting Rishi back would calm the bond markets and strengthen the pound.’

Mr Wallace’s potential change of heart comes as leaders of mutinous backbenchers told The Mail on Sunday that more than 100 Tory MPs are prepared to write to Sir Graham Brady, chairman of the 1922 Committee, submitting a motion of no confidence in Ms Truss.

Sir Graham is under pressure to change the rule which stops a leader being challenged for a year after their election – or risk being ousted as chairman.

The rebels, led by former Ministers Gavin Williamson, Grant Shapps and Julian Smith, are aiming for 125 names. Any contest is likely to be restricted to MPs because another vote by party members would take too long.

Ms Truss tried to save her faltering Premiership on Friday by sacking Chancellor Kwasi Kwarteng, following weeks of economic turmoil in the wake of the tax-cutting mini-budget he unveiled in September.

But Mr Kwarteng’s replacement, Jeremy Hunt, was accused of mounting a ‘silent coup’ yesterday after effectively ripping up Ms Truss’s policy platform by saying taxes will have to rise and ‘efficiencies’ would be needed in an effort to balance the books.

 

Mr Hunt – a former leadership contender who backed Rishi Sunak after failing to make the ballot – is now the most powerful figure in Government following his appointment on Friday.

With Ms Truss too weak to sack him, he said he had been given a ‘clean slate’ on which to draw up a new fiscal statement to reassure the market by the end of the month.

There are suggestions the economic outlook is far more dire than Mr Hunt predicted. Even after U-turns already made on corporation tax and income tax, the Treasury is still likely to have a shortfall worth up to £52 billion.

Mr Hunt is expected to pour over Mr Kwarteng’s fiscal statement in an attempt to find further ways to claw back money ahead of delivering a ‘proper budget’ on October 31.  

‘Everything is on the table,’ said a source close to the chancellor told The Times. 

‘What the Prime Minister wants him to do is send a very strong signal that the numbers add up and that has to get the support of the OBR and the Bank of England. The Bank is important because they are going to have to make a decision about raising interest rates just three days after the next budget.’

Mr Hunt, who is due to see the Prime Minister at Chequers today, told BBC Radio 4’s Today programme: ‘I’m leaving open all possibilities this morning.

‘Spending will not rise by as much as people would like and all Government departments are going to have to find more efficiencies than they were planning to.’

His pledge came just days after Ms Truss promised MPs she would ‘absolutely’ not make any spending cuts after being questioned by Sir Keir Starmer.

Mr Hunt also wasted no time in trashing the £43 billion mini-Budget, telling Sky News yesterday: ‘It was a mistake to fly blind and to do these forecasts without giving people the confidence of the Office of Budget Responsibility saying that the sums add up. The Prime Minister’s recognised that, that’s why I’m here.’

Conservative MPs have described Ms Truss as being in office but not in power, noting the opposing viewpoints she and Mr Hunt have so publicly held.

Mr Hunt ran for the Conservative leadership this summer on a platform of slashing corporation tax to 15 per cent to boost growth.

A former Tory Minister said: ‘What’s the point of Liz Truss if she’s implementing an agenda cooked up by Jeremy that she doesn’t agree with?’ 

As Chancellor, he will now enact Mr Sunak’s plan to increase corporation tax from 19 to 25 per cent in April after Ms Truss U-turned on her reversal of the policy.

Mr Hunt also previously opposed cuts to personal levies such as National Insurance and Income Tax – moves which Ms Truss has not so far rowed back on.

However, in a hint that they could be next in line, Mr Hunt said yesterday: ‘Some taxes will not be cut as quickly as people want. Some taxes will go up. So it’s going to be difficult.’

Joe Biden has appeared to join in the chorus of criticism against Prime Minister Liz Truss and the disastrous start to her leadership during a visit to an ice cream parlour.

The President of the United States said on Saturday he, like so many others, was shocked by the mini-budget and her overall economic vision.

‘I wasn’t the only one who thought it was a mistake,’ he told reporters, adding the subsequent outcome was ‘predictable’.

When asked about Ms Truss’s original economic strategy, President Biden said he disagreed with the plan.

But he acknowledged it was not his place to comment, instead saying it was up to the British people to come to their own conclusions.

Mr Biden also dismissed concerns about the strength of the dollar. He said: ‘The problem is the lack of economic growth and sound policy in other countries.’

The pair have famously had their differences over the course of their time in public office.

Last year, the PM told a fringe event at the Tory conference the relationship between the UK and US was ‘special but not exclusive’, adding Britain should not be ‘worried like some teenage girl at a party if we’re not considered to be good enough’.

 

He also refused to guarantee defence spending would rise by three per cent, as Ms Truss has pledged, saying the department would need to find efficiencies. Health spending has also not been guaranteed.

The Chancellor also declined to say whether benefits will rise with inflation – something demanded by a significant caucus of Conservative MPs.

It came after Tory MP and former Health Minister Steve Brine said Ms Truss should now be seen as the chairman, while Mr Hunt is chief executive.

The Prime Minister’s decision to appoint Mr Hunt has unsettled many of those on the Tory Right who backed her pledge to reduce taxes.

Thatcherite Tory MP John Redwood offered an early warning to the new Chancellor, tweeting: ‘You cannot tax your way to higher growth.

‘If you tax too much you end up borrowing more as you have a worse slowdown.’

But most in the party described Mr Hunt as a ‘safe pair of hands’ and said his interviews yesterday morning were ‘self-assured’.

‘We’re going to be talking about tax,’ Mr Hunt told ITV. ‘We’re going to be talking about spending, we’re going to be talking about medium and long-term plans.’ 

The Labour Party is looking to capitalise on the Government crisis with a series of new adverts as it gears up for the next general election.

They attack the Conservatives for damaging the UK’s standing on the world stage, hiking mortgages and crashing the economy.

It comes after a disastrous week for Prime Minister Liz Truss, whose authority has been left severely damaged by her decision to sack chancellor Kwasi Kwarteng and U-turn on planned tax cuts.

The new posters, first reported by the Sun, have been drawn up by Labour’s advertising agency Lucky Generals.

One accuses the Government of leaving ‘Britain’s reputation in tatters’ alongside a picture of a shredded Union Jack.

Another has the slogan: ‘Your mortgage is going through the roof’ incorporated into an image of a massive hole in a roof.

A third poster shows Ms Truss and the new Chancellor Jeremy Hunt dressed up as clowns, alongside the message: ‘Send off the clowns.’

The Prime Minister and Mr Kwarteng’s heads have also been photoshopped onto dummies in a fourth poster, which says: ‘These dummies have crashed the economy.’

A Labour source told the PA news agency: ‘As the old saying goes, if you don’t laugh, you cry.

‘The fact the Tories have crashed the economy is deadly serious. Just look at the way the Tories have pushed up mortgage rates.’ 

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