Politics Archives

Monday

17 Oct 2022

Trussonomics is dead

When Jeremy Hunt took the role of chancellor last week, he was thought to have done it under instructions from Liz Truss that he was not to roll back any more of the mini-Budget. That instruction hasn’t stuck. Today’s update on the ‘medium-term fiscal statement’ was not so much a detailed plan to balance the books (that’s still to come on 31 October), but rather a reversal of almost all of the mini-Budget rolled out by Liz Truss and former chancellor Kwasi Kwarteng last month. The plan to bring forward a 1p cut to the basic rate of income tax has been scrapped completely. It was thought that Hunt would

Kate Andrews

It’s not easy to regain market trust

The government’s position has become so precarious – and its credibility with the markets so low – that even waiting another two weeks to announce the ‘medium term fiscal statement’ became too big a gamble. By moving the announcement forward to today, Jeremy Hunt is removing the uncertainty of creating a two-week gap between the end of the Bank of England’s intervention in the gilt market and the government’s announcements. And markets are tentatively responding well. Ten-year gilt yields started dropping considerably when the market opened at 8 a.m., from 4.3 per cent down to just under 4.1 per cent. You can follow along with hourly updates via The Spectator’s

James Snell

Did Putin use Iranian martyr drones on Kyiv?

As Iranian munitions have hurtled through the air at the front line in the Donbas, and as Iranian suicide drones have smashed into Ukrainian cities, Tehran has denied everything – unconvincingly. The most recent was Iran’s foreign minister, Hossein Amirabdollahian, who said on Saturday: ‘The Islamic Republic of Iran has not and will not provide any weapon to be used in the war in Ukraine’. With the piety beloved of hypocrites everywhere, he went on: ‘We believe that the arming of each side of the crisis will prolong the war’. This is part of a pattern. For most of the last few weeks, Iran has officially denied that its weapons and

Steerpike

Flashback: Truss promises ‘no new taxes’

Trussonomics is dead, long live Treasury orthodoxy. New Chancellor Jeremy Hunt unpicked the bulk of his next-door neighbour’s policy agenda on TV this morning, telling the nation that nearly all of the tax measures that have not started legislation would now be reversed. Income tax will now remain at 20 per cent ‘indefinitely’, the free on alcohol rates has been scrapped with only the National Insurance and Stamp Duty breaks surviving. Hunt also confirmed that he will go ahead with Rishi Sunak’s planned corporation tax increase next April from 19 per cent to 25 per cent. It’s a dramatic break with Liz Truss’s promise in, er, August at the Tory husting

Ian Williams

Joe Biden has jolted China

The chip war between China and America is heating up, with an increasingly assertive Joe Biden battling with Xi Jinping as he enters his third term as Chinese leader. The US last week further restricted China’s access to advanced American know-how, in what were some of the most stringent export controls for decades. Xi didn’t mention semiconductors in a speech on Sunday marking the opening of the Communist party’s twice-a-decade congress in Beijing, but he did pledge that China would ‘resolutely win the battle in key core technologies’. To compete with the US, China will need better tech. These new export controls will make Xi’s vision much harder to achieve. Joe

Fraser Nelson

Will Jeremy Hunt’s U-turns deepen recession?

Just two weeks ago, Liz Truss told the Tory conference that her priority was ‘growth, growth and growth’. But how much of that can she expect now that her new Chancellor plans to jack up corporation tax from 19 per cent to 25 per cent as the economic headwinds strengthen? As she never tired of telling us during the leadership campaign, it’s an unusual thing to do at a time of threatened recession: no other G7 country plans to put up taxes in this way. Now that she has agreed to go along with the Sunak plan in the name of assuaging the markets, City forecasters are doing a double-take.

Sam Ashworth-Hayes

Who would vote for the Conservatives now?

As the Labour party’s lead reaches 27 per cent or more, it would be easy to place the entirety of the blame on Liz Truss. That doesn’t mean it would be fair; the effort to alienate all but the most hardline tribal Conservative supporters has been a joint effort across 12 years and multiple prime ministers. Markets hated the mini-Budget; cutting taxes while making massive spending pledges to subsidise energy demand during a critical shortage was not a winning formula. Apparently, blackouts are not looked on kindly; who could have guessed? Voters, meanwhile, hated it because it offered more to those who are better off. In particular, the 45p tax cut

Sam Leith

Can you feel sorry for Liz Truss?

It is not easy to feel sorry for Liz Truss. She has a deeply unattractive streak of vanity – when in the Foreign Office, she seemed more interested in posing for the official photographers who trailed her round than she did in building relationships with the places she visited. She campaigned hard and sometimes dirty to obtain a job for which she was manifestly out of her depth. Once in that job, she exercised power with peremptory arrogance. She rewarded people who had sucked up to her, cast out anyone who had spoken up for her rival, and allowed experienced civil servants to be hoofed ruthlessly out of their jobs.

James Forsyth

More mini-Budget U-turns coming today

In a sign of how nervous the government still is about the state of the gilts market, the Treasury has just made a pre-market announcement that Jeremy Hunt will bring forward further measures from the ‘Medium Term Fiscal Plan’ today – in other words, more measures from the mini-Budget will be abandoned. The Treasury says Hunt has briefed Andrew Bailey, the Governor of the Bank of England, and the Debt Management Office on these plans. We will get details on these measures when Hunt makes a statement to the Commons later today. Presumably this is what Hunt and Liz Truss agreed at Chequers when they met on Sunday. The fact

Sunday

16 Oct 2022

Katy Balls

How long can Liz Truss hold on?

How much trouble is Liz Truss in? Just six weeks into her premiership, the Prime Minister’s economic plans are in tatters after she axed her chancellor Kwasi Kwarteng, reversed on her campaign pledge to scrap the scheduled corporation tax hike and brought in Jeremy Hunt as his successor. Now Hunt is calling the shots on the economy and he plans to reverse much of what the Truss government have announced so far, with tax rises and public spending cuts to come. Truss’s own supporters are privately asking what the point of her government is now. Unsurprisingly, this has all led to talk among Tory MPs that the end is nigh.

Lionel Barber

Jeremy Hunt is the ‘unity’ leader the Tories need

Liz Truss is now prime minister in name only: Jeremy Hunt, her chancellor of the exchequer, now holds power. He has repudiated her tax-cutting mini-Budget in a round of media appearances – his performances being far more convincing than Truss’s graceless eight-minute press conference on Friday. His admission that spending cuts will be needed and that ‘some taxes are going to go up’ to balance the books has injected a much-needed dose of realism. The question on everyone’s lips is: what will Hunt do now? Is he a stalking horse for a new PM (Rishi Sunak being the obvious candidate) or is the former head boy at Charterhouse himself a

Steerpike

Watch: first Tory MP calls for Truss to go

In office, Liz Truss promised to be the ‘disruptor in chief’. Unfortunately, most of that disruption has proved to be in the markets and the polls as her short-lived revolution tanked the standing of both her currency and her party. With Labour and mortgage rates on the rise, Truss’s authority has disappeared within days. She’s been forced to ditch her ideological soulmate Kwasi Kwarteng for Jeremy Hunt, the embodiment of Tory orthodoxy, and is now very much a prisoner of her party as they try to find someone – anyone – who can dig them out of their self-inflicted mess. Most of these discussions are happening behind closed doors as

Matthew Taylor

Sunday shows round-up: Is Truss a ‘libertarian jihadist’?

Jeremy Hunt – ‘The Prime Minister is in charge’ To say things do not look rosy for Liz Truss would be quite the understatement. With the government now on its second Chancellor in as many months, and its once flagship policies being hastily swept under the carpet, the Conservative party appears to be in damage limitation mode. Laura Kuenssberg spoke to the new Chancellor this morning, in a pre-recorded interview, asking him if Truss was now such a damaged figure that he was the one really calling the shots: ‘There is a very difficult job to be done right now’ Hunt told Kuenssberg that he would be looking at all

James Forsyth

Hunt on Truss: ‘She’s willing to change’

Liz Truss’s gaoler has just done another BBC interview. Jeremy Hunt continued to try and give himself maximum room for manoeuvre, saying ‘I’m not taking anything off the table’. He repeated his message: We are going to have to take some very difficult decisions both on spending and on tax. Spending is not going to increase by as much as people hoped, and indeed we’re going to have to ask all government departments to find more efficiencies than they’d planned. And taxes are not going to go down as quickly as people thought, and some taxes are going to go up. It will be fascinating to see if Truss is

Steerpike

Does Joe Biden know what ‘super-wealthy’ Americans pay in tax?

Joe Biden, ice cream in hand as so often, yesterday pronounced on Liz Truss’s tax reform disaster. ‘I wasn’t the only one that thought it was a mistake,’ said Joe Biden, sounding every bit the wise old man of global politics. ‘I think that the idea of cutting taxes on the super-wealthy at a time when… I disagree with the policy, but that’s up to Great Britain.’ That concession at the end is the President realising he’s just breached the normal rules of diplomacy – by giving his opinion on an ally’s domestic difficulties. But he just can’t help himself. Biden has probably forgotten, but he has proposed increasing the

Patrick O’Flynn

Who voted for Jeremy Hunt to run Britain?

Jeremy Hunt has no mandate to lead Britain. He couldn’t muster sufficient Tory MPs behind him to properly enter the last leadership contest. He was beaten overwhelmingly in the one before that. He was a key part of the failed Theresa May administration that lost a parliamentary majority at a general election. He played no role in the Boris Johnson administration that won it back with plenty to spare (a victory from which the Conservative mandate to govern still flows). Yet in a round of interviews this weekend, the new Chancellor of the Exchequer simply ripped up the economic agenda of Liz Truss. He mocked and then buried the PM’s

Saturday

15 Oct 2022

Steerpike

Ben Wallace: If defence spending pledge goes, so do I

In politics, where there’s death, there’s life. And as Liz Truss’s premiership crumbles before our eyes, all attention in SW1 is which lucky legislator gets to replace her. Second time Sunak? The people’s Penny? Back again Boris? Or perhaps the man who many wanted to run this summer but ended up dropping out: Ben Wallace, the popular Defence Secretary. The former Scots Guards officer has been a long-standing fixture at the top of the ConservativeHome Cabinet rankings but opted to back Liz Truss in July rather than run himself. Instead, he extracted a pledge from the Trussette to raise defence spending to 3 per cent of GDP by 2030 – a

Steerpike

Kwarteng’s allies pin the blame on Truss

Kwasi Kwarteng’s letter to Liz Truss was outwardly loyal. But he made it quite clear he had been sacked for trying to implement her ‘vision’. Friends of the former Chancellor are now suggesting that it was the Prime Minister who was the moving force behind the mini-Budget’s most disastrous measure: the abolition of the 45p rate. They tell the Mail on Sunday that he had proposed not including it, only for Truss to reply – ‘let’s go for it.’ One wonders how many more of these inconvenient details might leak out in the coming days. The problem for Kwarteng and Truss, though, is that they are neighbours in Greenwich as well

Isabel Oakeshott

The plot to put Rishi Sunak in No. 10

When Rishi Sunak resigned over Boris Johnson’s leadership, he acknowledged that it might be the end of his political career. His dreams of leading the Tory party already seemed over, thanks to his wealthy wife’s non-dom status. In a few short weeks, the Tory party did something quite extraordinary, and forgot about all that. Setting aside what would normally have been a career ending scandal, they very nearly made him prime minister. Now his supporters are trying to engineer something even more amazing: ousting the woman who beat him in the party leadership contest, and installing their man in No. 10. The first step of their plan involves market turmoil

Mark Galeotti

The misconception about Putin’s big red nuclear button

There is a common misconception that the leaders of nuclear states have a ‘red button’ that can unleash Armageddon. As Vladimir Putin continues to hint at the use of non-strategic (‘tactical’) nuclear weapons in Ukraine, there is some comfort in the knowledge that it is not so easy. Ironically, launching the kind of strategic nuclear missiles whose use would likely spiral into global destruction is somewhat easier than deploying the smaller weapons which – however vastly unlikely – could conceivably be used in Ukraine. These lower-yield warheads would need to be reconditioned in one of the 12 ‘Object S’ arsenals across Russia holding them, and then transported to one of