Reporter of the Economic Business: Li Menglin Reporter of the Economic Business Business: Gao Han
British Prime Minister The large-scale tax cut plan after Tras took office has caused severe turmoil in the UK financial market, aroused widespread doubts and criticism from the outside world, and his personal image has also been hit hard. After the Chancellor Kwoten, who jointly formulated economic policies last Friday (October 14), was "fired" and it was now Tras' turn to worry about his position being out of stock.
According to CCTV News, citing the " Guardian ", several senior MPs of the Conservative Party will meet on October 17 local time to discuss the stay and stay of Tras, some of whom hope that Tras will resign within a few days. The British " Daily Mail " quoted anonymous sources as saying that more than 100 Conservative MPs are preparing to submit a letter of distrust of Tras to the chairman of the party's committee in charge of personnel, hoping to oust Tras from power within this week. At the same time, Tras is working hard to correct the "blindly optimistic" fiscal policy with newly appointed Chancellor of the Exchequer Jeremy Hunter. Whether the big turn policy can appease the financial market as soon as possible will undoubtedly have a significant impact on Tras' stay or not.
Tras has just taken office for more than 40 days. In many difficulties, she may become the shortest-term Prime Minister in British history.
Tras Image source: Visual China-VCG31N1243010391
"Forcing the palace" to step down is a foregone conclusion?
Tras is probably the worst-start prime minister in modern British history. On September 23, then-Cancellor Kwoten announced a £43 billion tax cut to boost the economy. The largest tax cut in 50 years has sparked market concerns about the fiscal situation of the UK government, with the pound 2 exchange rate falling and the UK Treasury bonds being sold violently.
Poor policies have raised questions about Tras' ability to govern. According to a survey conducted by PeoplePoll last week, only 9% of British voters have a positive view of Tras.
On October 16th local time, Conservative MP Jamie Wallis wrote a letter to Tras directly asking her to step down. "In recent weeks, I have witnessed the current government undermining the UK's economic credibility and irreversibly harming our political party. It's time to stop," he wrote on Twitter .
According to media reports, as of the evening of the 16th local time, three Conservative MPs have publicly demanded that Tras step down. Under the water, the Conservative Party’s actions to push Tras to step down are also accelerating.
According to CCTV News, citing the British Guardian, the main supporters of former British Chancellor Sunak will hold a dinner party on the evening of the 17th local time, and 15 to 20 former British cabinet members and several senior MPs were invited to attend. It is reported that the main topic of the dinner party is to discuss how and when to remove Prime Minister Tras. Sunak lost to Tras in the final round in the competition for the Conservative Party leader and British Prime Minister, but his support within the Conservative Party remains high.
According to the British Daily Mail, anonymous sources said that more than 100 Conservative MPs are preparing to submit a letter of distrust against Tras to the chairman of the "1922 Committee" in the party responsible for organizing the leadership's election, and plan to get Tras down this week. They asked Chairman Graham Brady to either tell Tras that “her time has come” (also implying persuading Tras to resign herself) or to amend the party rules to immediately initiate a vote of confidence in Tras.
It is reported that Graham Brady has opposed the plan, believing that Tras and the new Chancellor of the Exchequer should be given a chance to propose a revised fiscal policy.
"I guess she won't last long, and I'll give her a few weeks at most, or even less," said Vernon Bogdanor, a political science professor at King's College London, who is now the most worried about the fact that Trass' reputation will drag down the Conservatives' defeat in the next election. "Their motive is to be afraid of losing their seats."
However, according to the current Conservative policy, Tras's prime minister position is protected for a one-year exemption period. To amend this clause, about two-thirds of the nearly 360 Conservative MPs need to propose to the "1922 Committee", with a high threshold. This means that Tras is likely not to be ousted immediately.
The shortest reigning prime minister in British history is George Canning. He died in office in 1827 and served for 119 days. If Tras wants to avoid setting a record of the shortest term, he will have to last for more than two and a half months.
The new Treasury Secretary urgently "putting out the fire"
In order to save his position as prime minister, Tras spent the whole day discussing the revised medium-term fiscal plan with the newly appointed Treasury Secretary Hunter all day on Sunday (16th). She plans to call on the cabinet members on the evening of the 17th to hear their opinions on the financial plan.
Originally, this plan aimed at ensuring market confidence in the UK's fiscal sustainability is scheduled to be released on October 31. However, after the media broke out the pressure of "forced palace" one after another, Hunter announced that he would issue a statement on the medium-term fiscal plan at 18:00 on the 17th, Beijing time, and disclose some of the main measures in the plan in advance.
The market is generally expected to further reverse Tras' fiscal policy. The market opened on Monday, with British stocks and bonds rising across the board. As of press time, the yield on the UK 10-year Treasury bond fell by about 22.3 basis points (return is inversely related to price), at 4.0975%. Considering that the BoE's temporary bond purchase plan to support the Treasury bond market ended last Friday, the gains are quite considerable. The pound exchange rate against the US dollar rose 0.87% to 1.1267; the FTSE 100 index rose 0.67% to 6904.64.
Picture source: Yingwei Financial Information
After taking office on the 16th, Hunter said that the previously proposed fiscal policy is too "blindly optimistic" about the prospects and ignores the basic demands of ordinary people, which damages the credibility of the government.
Hunter also criticized his ex-Kwoten. He said that repealing the maximum income tax rate of 45% and developing plans without the OBR (OBR) has published costing, he will correct them.
According to the " Sunday Times ", British government sources said that Hunter is expected to postpone the plan to cut the basic income tax rate by 1% in April next year, another reversal of the Trass fiscal plan. Delaying tax cuts in a year can increase fiscal revenue by about £5 billion.
"Hunt has a good start as the Chancellor of the Exchequer," Conservative MP Mel Stride said on Twitter. "[He] conveyed a message that 'we know what to do and are working on it.'"
An anonymous Conservative veteran told Bloomberg that if financial markets stabilize and Hunter dominates fiscal policy, then Tras's prime minister may be able to last for weeks or even months. He believes this is the most likely result, because the Conservative Party has not yet formed a unified opinion on the candidates to replace Tras, and many MPs are willing to give Hunter's new policy some time to verify the effect.
Another senior Conservative MP, Roger Gale, believes that the power of Downing Street (the British government office) has been transferred from 10 (Prime Minister) to 11 (Chancellor). "I think Hunter has become the de facto Prime Minister," he told BBC.
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