Jeremy Hunt liquidates Liz Truss
The new chancellor has turned into an insolvency practitioner
If Jeremy Hunt needs a new career after the next election, he’d make an excellent insolvency practitioner. I don’t mean anything so crude as a cudgel-wielding debt collector, but rather a post in the Insolvency Service — the state agency that manages company liquidations and personal bankruptcies.
Arguably, Hunt had already made a start. He’s not so much the Chancellor of the Exchequer, but rather the official receiver for a bankrupt government. According to the GOV.UK website, official receivers (ORs) are appointed by the Insolvency Service to carry out three main tasks.
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Firstly, they “collect and protect assets for creditors”. This was the primary purpose of the Chancellor’s financial statement today. The creditors of a government are the money markets — whose assets are bonds (i.e. a promise on the part of a government to repay a given amount, after a given number of years, at a given rate of interest). The value of those bonds rise and fall depending on various factors — the most important of which is the perceived sustainability of a government’s borrowing.
Therefore, Hunt’s overriding objective is to protect UK bond values by shoring-up our public finances. Primarily, that means reversing almost all of the tax cuts announced in the catastrophic mini-budget. The government has already announced that the top rate of income tax will stay in place and that the cancellation of the planned rise in corporation tax has itself been cancelled. But as well as those climb-downs, Hunt has also nixed other Truss giveaways, including the reduction in the basic rate of income tax, which will stay at 20% indefinitely.
As for the massively expensive Energy Price Guarantee, this will now only last for one winter — not the two as previously promised. There’ll be a Treasury review into what replaces it, but Hunt made it clear it won’t be nearly so generous.
The second task of an official receiver is to “find out the reasons for the insolvency”. In this regard, Hunt more or less admitted it. He opened with the words “a central responsibility for any government is to do what’s necessary for economic stability”. By explicitly renouncing most of mini-budget, his implication is that Truss has failed in this duty.
The third task of an official receiver is to act as a “trustee or liquidator” for the bankrupt enterprise in question. And that too is what Hunt did today. A little over a week ago, the Tory leader used her conference speech to proclaim that the priorities of her government were “growth, growth and growth.” Though the Chancellor paid lip service to her growth plan today, he also insisted that the most important objective was “stability” and that in making the consequent tough choices the priority was protecting the “most vulnerable”.
So that looks like three priorities to me — of which growth is only one. So, even if the country has been saved from financial ruin, it is clear that Liz Truss’s political project is a busted flush.
The MP’s can have a coronation without involving the membership, and that is almost certainly the way they’ll go. They can also avoid the 12 month rule on a no confidence motion, by persuading Truss that the game is up, and she must leave.
So the goal is open for them to take the shot. But they’ll basically be kicking the membership in the teeth (many would say for the second time, if you include the defenestration of Johnson – or the third, if you include the coronation of May.)
I have no doubt the MP’s would be delighted to have no members left to remind them of their obligations and to make their lives difficult occasionally. But I wonder if the party could function without any of its hard-working and unpaid infrastructure. Personally, I don’t care – I binned my membership a while ago, and I think they deserve the kicking they’ve got coming.
Interesting times. Personally, I have put assets offshore and out of the currency, and I am limiting my taxable UK income to the middle forties, so as to be just another grey old pensioner not on anybody’s radar.
“I have no doubt the MP’s would be delighted to have no members left to remind them of their obligations”
An MPs obligations to his constituents; not Conservative party members. They also have obligations to the Crown, to support and express confidence in the government or to withdraw it. Again, Conservative Party members are deluding themselves here that there is any responsibility towards them and if they believe they have a legitimate place I’m choosing the prime minister that other members of the electorate do not have.
Your point is very much worth making. Party members seem to think they are the employers of MP’s, when they’re nothing more than the recruitment agency.
Voters have been kicked in the teeth repeatedly by factions within all major parties, who assume that a manifesto is something that can be torn up the moment they’ve used it to con their way into government.
Brexit was necessary, but not sufficient, to bring about a level of democracy that we haven’t yet seen, but which the majority of the populace is now determined to achieve. Governing for the benefit of special interest groups – on the right or on the left – no longer cuts it.
The only mandate the Conservative party has is for the measures and approach set out in their 2019 manifesto. Liz Truss and Kwasi Kwarteng ripped that up. Now Jeremy Hunt is pulling the strings and seems to want to substitute his own (pro-EU?) set of priorities. Neither has a mandate. Neither has any legitimacy. It’s time for a General Election, and to make it clear to politicians that they stand or fall on the policies they set out in their manifestos.
The membership was warned by Sunak and the experts about LT’s economic plan. They still voted for it.
If they really really love UK they should never vote again. Not even for the local dog catcher.
Who (really) appointed Hunt, and Why?
How many people actually know that BOE has created NO NEW MONEY for the economy since Thatcher deregulated the banks in the 1980s. Expansion from a GDP of £300bn in 1985 to £2700bn now it has nearly all been created as credit [i.e.DEBT] by commercial bankers. All of 2008 & 2020 QE cascaded into existing assets [Stocks and Shares and Property – especially houses] – virtually none trickled down as BOE had hoped and expected. In 1970 Commercial Bank credit in the economy was 50% at £50bn with Sovereign money an equal £50bn.. Hardly any bankers, journalists and politicians understand how money SHOULD work. As for economists, they all have their own groups with misguided doctrines based on idealised situations! So apart from the likes of Stephanie Kelton and Steve Keen they are pretty well not fit for purpose.
LOL, good take.
This is in the same level as Suez and 1976 IMF crisis.
Hunt is statesmanlike, articulate and intelligent. Hopefully our next PM with Rishi his Chancellor. Truss, by contrast is inane, incoherent and stupid. Let’s hope the Tories finally come to their senses.
I suspect it will be the other way round: Sunak as PM and Hunt stays as Chancellor. I also think it might happen before the end of the month – maybe a 1 week MPs only contest.
Hunt is….a supporter of more stringent lockdowns…a long term health minister who prepared for the wrong pandemic (flu, not coronavirus)…married to a Chinese citizen who hosts a politics show on Sky China that does not question the insane zero covid policy (who in China dares to question it?).
Statesmanlike? Which state are you referring to?
Anyone can google 30 year gilt yields and see that after years of declines, they started rising early 2020, almost as if lockdowns were something to do with it. As you say Hunt was all for it, so not sure I would credit him with intelligence.
Admittedly he made mistakes as Health Secretary but that was a while ago and not particularly relevant. The fact that he has a Chinese wife is certainly irrelevant and your comment smacks of racism.
OOOH! So now criticism of the CCP is ‘racist’. You may ‘be’ , Rene, but you don’t think.
Are you being deliberately obtuse, michael, or just mischievous? Of course criticism of the disgraceful CCP is not racist. What is racist is smearing Hunt for being married to a Chinese citizen. Cogito, ergo sum René.
Truss, by contrast is inane, incoherent and stupid
Yes, and the members of Tory Party voted for her.
The Tory members (a few comment here) constantly complained about dishonesty in public life, incompetence in the affairs of the state, immorality in the private/public life….and they voted overwhelmingly for Boris.
Sunak could make an excellent PM as long as he keeps his hands out of the Treasury. he may be a highly successful financier but is a total ignoramus as to how money SHOULD work. As for Hunt … well just clueless at most things and brain dead economically.
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