Berliner Boersenzeitung - UK PM Truss battles to stay in power after tax reforms trashed

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UK PM Truss battles to stay in power after tax reforms trashed
UK PM Truss battles to stay in power after tax reforms trashed / Photo: - - PRU/AFP

UK PM Truss battles to stay in power after tax reforms trashed

British Prime Minister Liz Truss on Tuesday battled to stabilise her position after an economic crash forced her into humiliating U-turns on tax reforms, putting her future as leader in doubt.

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"It's hard to conceive of a more serious political and economic crisis in recent times than that which Britain now faces," right-wing broadsheet The Daily Telegraph wrote in an editorial.

The paper, which previously supported Truss, wrote that she faced "the ignominy" of becoming the country's second shortest-serving prime minister in history, unless her own MPs gave her "breathing space".

Truss on Tuesday was to meet her cabinet and attempt to rally support among Conservative MPs, some of whom have publicly said she has no future as prime minister.

She was set to face parliament on Wednesday for a session of Prime Minister's Questions.

The right-wing Sun tabloid on Tuesday called Truss "The Ghost PM", while left-wing tabloid The Mirror called the situation a "catastrophic humiliation".

The embattled prime minister on Monday apologised in a BBC interview for going "too far and too fast" with reforms, a month after taking office.

This came after her new finance minister Jeremy Hunt in a brief televised statement on Monday axed almost all the debt-fuelled tax cuts announced last month in a budget by his sacked predecessor, Kwasi Kwarteng.

Hunt told parliament that he and Truss "agreed yesterday to reverse almost all the tax measures announced in the growth plan three weeks ago", flanked by a grim-faced Truss.

The announcement came as Truss's governing Conservative party tanked in the opinion polls amid the reversals and Britain's worsening cost-of-living crisis.

- 'Very British coup' -

British media likened Hunt's dramatic intervention to a coup, with The Telegraph depicting him in cartoon form as a bemedaled Generalissimo "taking temporary control to stabilise the situation".

"It was a very British coup. So polite you could almost have missed it," wrote left-wing broadsheet The Guardian.

Conservative MP Roger Gale said that Hunt had become "de facto prime minister" as several MPs publicly urged her to go and others reportedly plotted to unseat her.

"I think her position is untenable," Conservative MP Charles Walker told Sky News.

"If she doesn't go right now, it will not be her decision," he warned.

Armed forces minister James Heappey assured British media on Tuesday morning that Truss had "owned" her mistake, while admitting she could not repeat such errors.

Asked by Sky News whether Truss was "prime minister in name only", Heappey insisted: "She's been very candid about the mistake that was made and she has apologised for that... There's leadership in doing that".

But he conceded that "given how skittish our politics are... I don't think that there's the opportunity to make any more mistakes."

Truss fired her close friend Kwarteng on Friday after their tax-slashing budget sent bond yields spiking and the pound collapsing to a record dollar-low on fears of rocketing UK debt -- fuelling intense speculation over her political future one month after taking office.

Truss had already staged two embarrassing budget U-turns, scrapping tax cuts for the richest earners and on company profits.

Hunt's strategy reversals included reducing Truss's announced £2,500 cap on energy bills for all British people from two years to six months, after which he promised a new approach.

Hunt estimated the tax changes would raise about £32 billion ($36 billion) per year, after economists estimated the government faced a £60-billion black hole. He also warned of tough spending cuts.

Hunt's actions on Monday sent the British pound soaring against the dollar and euro, while bond yields dipped.

(S.G.Stein--BBZ)