What happens if Liz Truss resigns today?
Prime Minister Liz Truss has had the worst start to her premiership than any other PM. And the last 48 hours in Westminster have been chaos.
There are rumours that the Liz Truss era is fast approaching its end, and many are plotting to oust her from No 10.
She has only been in the job since September 5.
In that time, the Queen died, Liz Truss crashed the economy, her mini-budget has been ripped up and replaced with policies that she campaigned against during the leadership race, she fired her chancellor and replaced him with a Rishi Sunak supporter, her home secretary resigned and offered up a scathing letter and there were reports of bullying from her cabinet at last night’s Commons vote.
Chancellor Kwasi Kwarteng was fired after the mini-budget spooked the financial markets. Many argue that Truss should have gone with him as it was her financial vision as his.
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How does a Tory leadership election work?
According to the 1922 Committee, an incumbent Tory PM cannot face a confidence vote within their first year on the job. But there is speculation that this rule could be changed.
After that 12-month period, to trigger a contest vote, 15 per cent of Tory MPs would have to submit letters of no confidence to 1922 Committee chair, Sir Graham Brady. If at least 50 per cent of MPs then vote no-confidence in their leader, a leadership election begins.
Tory MPs who want to be in the race for the top job will then seek nominations from their colleagues. There will be a series of ballots which will see all the candidates whittled down to just two. The rank and file of the Conservative party will then choose the winner.
Boris Johnson won the general election in 2019 and although he was ousted and replaced with Truss there is no requirement for the Conservative party to call a general election.
Some MPs are understood to want to avoid putting the vote back to the ordinary members of the party. The Telegraph says some MPs want the parliamentary party to choose Truss’s successor, though others warn that this would require a complicated rule change.
This aligns with newspaper reports that say the Tories want to put Rishi Sunak and Penny Mordaunt in office on a “golden ticket” type deal.
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What happens if Liz Truss resigns today?
If Liz Truss resigns as Conservative leader and Prime Minister today, a leadership contest would begin.
Those wanting to get into No 10 would begin trying to get support for their campaign.
However, it is possible that the Tory parliamentary party could rally around a single candidate for the leadership. This would perhaps be seen as a better option as it will avoid time-wasting.
If Truss does not resign and attempts to cling on to power against the will of MPs and peers, the 1922 Committee could and would likely change the rules to allow an early challenge to her (changing the 12-month rule). This would likely see her removal from both leadership of the party and as prime minister.
Can we have a general election?
Labour and Liberal Democrats are amongst those calling for an early general election. But the government is not legally obliged to hold another general election before January 2025 – surely to the delight of Conservatives as the latest opinion polls suggest the Tories would lose most of their seats.
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Cliff Notes
- A report by The Resolution Foundation reveals that average earners would take 52 years to save enough to rise from middle to top wealth distribution, estimating a need of around £1.3m.
- Despite a dramatic increase in overall wealth, relative wealth inequality remains stable, with the richest 10% owning about half of all wealth, worsening intergenerational inequality.
- The discussion around a potential wealth tax is sparked by calls from figures like former Labour leader Lord Kinnock, though current economic policies aim to avoid deterring wealthy individuals from the UK.
It’s now almost impossible to work your way to riches, says report into growing wealth gap | Money News
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Britain’s wealth gap is growing and it’s now practically impossible for a typical worker to save enough to become rich, according to a report.
Analysis by The Resolution Foundation, a left-leaning think tank, found it would take average earners 52 years to accrue savings that would take them from the middle to the top of wealth distribution.
The total needed would be around £1.3m, and assumes they save almost all of their income.
Wealth gaps are “entrenched”, it said, meaning who your parents are – and what assets they may have – is becoming more important to your living standards than how hard you work.
While the UK’s wealth has “expanded dramatically over recent decades”, it’s been mainly fuelled by periods of low interest rates and increases in asset worth – not wage growth or buying new property.
Citing figures from the Office for National Statistics (ONS) Wealth And Assets Survey, the think tank found household wealth reached £17trn in 2020-22, with £5.5trn (32%) held in property and £8.2trn (48%) in pensions.
The report said: “As a result, Britain’s wealth reached a new peak of nearly 7.5 times GDP by 2020-22, up from around three times GDP in the mid-1980s.
“Yet, despite this remarkable increase in the overall stock of wealth, relative wealth inequality – measured by the share of wealth held by the richest households – has remained broadly stable since the 1980s, with the richest tenth of households consistently owning around half of all wealth.”
According to the think tank, this trend has worsened intergenerational inequality.
It said the wealth gap between people in their early 30s and people in their early 60s has more than doubled between 2006-08 and 2020-22 – from £135,000 to £310,000, in real cash terms.
Regional inequality remains an issue, with median average wealth per adult higher in London and the South East.
Could wealth tax be the answer?
The report comes seven weeks before Rachel Reeves delivers her budget on 26 November, having batted away calls earlier this year for a wealth tax.
Former Labour leader Lord Kinnock is among those to have called for one, in an interview with Sky News.
But speaking to Bloomberg last month, Ms Reeves said: “We already have taxes on wealthy people – I don’t think we need a standalone wealth tax.”
Previous government policies targeting Britain’s richest, notably a move to grab billions from non-doms, has led to concerns about an exodus of wealth. The prime minister has denied too many are leaving the capital.
Molly Broome, senior economist at the Resolution Foundation, said any wealth taxes would not just be paid by the country’s richest citizens.
She said: “With property and pensions now representing 80% of the growing bulk of household wealth, we need to be honest that higher wealth taxes are likely to fall on pensioners, southern homeowners or their families, rather than just being paid by the super-rich.”
