British PM Liz Truss fires finance minister Kwasi Kwarteng

The British Conservative Party’s economic reputation and growth agenda has been left in “tatters,” former UK Chancellor Philip Hammond said Friday.

Hammond made the remarks in an interview on BBC Radio 4.

“[Truss’ government] haven’t fully resolved the economic question, and I do not think they can resolve the political damage that has been caused,” Hammond said.

“I’m afraid to say we’ve thrown away years and years of painstaking work to build and maintain a reputation as a party of fiscal discipline and competence in government. And many of the arguments that we routinely deploy against the labour party around fiscal management will look extremely limp in light of what has happened over the last few weeks,” he added.

Hammond’s comments come as the UK faces significant economic turmoil. He spoke before Truss gave a news conference at Downing Street where she formally announced a major U-turn on corporation tax.

Hammond criticized Truss’ economic policy on growth and said she “will have to go back to a more conventional economic policy.” 

“Liz Truss’ economic agenda was very simple: you cut taxes, and growth comes automatically. That approach, which means using borrowing to fund the cost of tax cuts until the growth kicks in, if it ever does, is now off the agenda,” he said. 

Hammond does think Truss can survive as prime minister and did not call for her to resign.  “I do not believe the country will tolerate another change of leader without a general election,” he said.

What Truss is saying: In firing finance minister Kwasi Kwarteng and announcing another reversal on her mini-budget, Truss acknowledged the difficulty of her task Friday but said she “acted decisively” to calm the markets.

Truss says Jeremy Hunt, her new chancellor, is “one of the most experienced and widely respected government ministers and parliamentarians.”

Facing fierce criticism, she declined to apologize to her party or the public over the instability her economic plan caused.