Mint Explainer: The probables who can replace Liz Truss

What is the background to the crisis?

In late September, Chancellor Kwasi Kwarteng announced a mini-budget that roiled markets. Kwarteng and Truss announced billions in tax cuts, including the abolition of a 45% tax rate on top earners, and reversing other tax rises. At the same time, the government pledged to spend billions in order to protect households from the increase in energy prices caused by the Ukraine war and unexpected demand increases due to post-COVID economic reopening. Markets believed the budget was based on shaky economics and reacted accordingly: the pound collapsed, investors dumped British government bonds and the Bank of England was forced to intervene. Truss’s opponents accused her of incompetence and much of the British public seemed to agree. The opposition Labour Party is now the hot favourite to win the next general election.

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What has happened since?

Faced with calls to resign, Truss has unceremoniously dumped Kwasi Kwarteng as Chancellor as a desperate measure. She has been forced to turn to Jeremy Hunt, an experienced former foreign minister, who voted for Rishi Sunak in the recent leadership race. Hunt has reversed many of Truss’s decisions to cut taxes. In a violation of a major campaign promise, the government will now hike, and not cut, the rate of corporation tax. Hunt has also called for government departments to cut spending levels. In response, markets have calmed significantly. However, Truss’s signature economic plans, which were supposed to be a hallmark of her government, have been junked. Commentators have questioned how long she can hope to go on.

Is a coup from Hunt likely?

Several MPs have called on Truss to resign and one of the Conservative Party’s longest-serving MPs called Hunt a “de facto prime minister". Many speculate that it is only a matter of time before members act to remove Truss. She currently enjoys a -61% approval rating. As per Conservative Party rules, Truss is protected from facing a challenge for the leadership for the next 12 months. Therefore, if Truss is to lose office, she must resign. This is how both Theresa May and Boris Johnson were removed from No.10 Downing Street. Pressure for this course of action is slowly building among members of the party.

Who is likely to step into her place?

While some have pointed to Hunt as the obvious choice, it helps to remember that he was a candidate in the recently concluded leadership contest. He mustered support from only 18 MPs and was eliminated in the first round of voting. While Hunt got far in the 2019 leadership race against Johnson, that was well over three years ago.

Rishi Sunak is another choice. The Conservative Party’s right wing may be chastised for now and may be persuaded to make way for a moderate candidate. However, it is equally likely that they will back another of their fold, like former defence minister Penny Mordaunt. Mordaunt had finished third in the recently concluded leadership race behind Sunak and Truss.

A significant section of the party’s membership wants Boris Johnson to return to the leadership. His popularity among sections of the British public and decisive election victory in 2019 continue to hold some sway within the party.

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