Former Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng has been named as Chancellor of The Exchequer by new Prime Minister Liz Truss.
The move has been widely expected with Kwarteng being reported to have been putting his Treasury team in place over the weekend.
Truss won the leadership contest after beating former Chancellor Rishi Sunak after the ousting of Boris Johnson.
Kwarteng is seen as a Truss loyalist and co-authored, with other Tory MPs including Truss and Dominic Raab, the 2012 book Britannia Unchained.
The book suggested that British employees needed a stronger work ethic. While the authors made a number of remarks and suggestions, including that “Once they enter the workplace, the British are among the worst idlers in the world”.
The book also argues for a radical shrinking of the welfare state in order “to return it to the contributory principle envisioned by its founder Sir William Beveridge – that you get benefits in return for contributions”.
Kwarteng, MP for Spelthorne since 2010 was previously Parliamentary Private Secretary to Chancellor of the Exchequer Philip Hammond.
In 2018 he replaced Suella Braverman as a minister in the Department for Exiting the EU.
In 2019 Kwarteng was appointed Minister of State at the Department for Business, Energy and Industrial Strategy. In January 2021 he became the Secretary of State for the same department.
Housing and mortgage market
While the Cost of Living crisis has dominated the agenda newly minted Prime Minister Truss has given some indications on her views of the housing and mortgage markets.
In a Liz for Leader email to Conservative members, she pledged “abolish Soviet top-down housing targets”.
The soon-to-be Prime Minister has also touched on potential plans to expand urban density by building higher-rise accommodation.
She has also vowed to change how mortgages are assessed. Truss said she would support more first-time buyers into homeownership by allowing rent payments to be used as part of the affordability assessment for a mortgage.
This pledge looks set to form part of the mortgage market review announced by Johnson prior to his departure.
She’s also said she will maintain the Bank of England’s (BoE) independence, although she wants to reassess its mandate.
Speaking of the BoE in an ITV debate she said: “I completely support the Bank of England’s independence… the last time the mandate was set was in 1997, in completely different times.”
Additionally, Truss pledged to continue with the Government’s levelling up agenda by creating a funding formula to support struggling areas.
Cost of Living Crisis
Truss’s economic plans however have been branded ‘fairytale economics’ with one of the key differences between her and Sunak being drawn along the lines of the economy.
She has also said she would provide support for the cost of energy bills. In an article in the Daily Mail she said: “To those of you feeling the squeeze, my message is clear: I will ensure support is on its way and we get through these tough times.”
It has been suggested that an announcement on how that support may look could be expected as early as Thursday.
Truss has also said she will conduct a full tax review, looking at things like business rates, as well as making a review of inheritance tax.
A review of taxes for the self-employed has also been promised. Truss said: “If you’re self-employed, you don’t get the same benefits as being in a big company.
“You don’t get paid holidays, you didn’t get those benefits. So the tax system should reflect that more.”
It is now down to Kwarteng and the new Cabinet to put these plans in place.
