Jeremy Hunt named as new Chancellor after Kwasi Kwarteng sacked by Liz Truss

Jeremy Hunt has been appointed as the new Chancellor after the Prime Minister sacked Kwasi Kwarteng.

Downing Street said former foreign secretary Mr Hunt would be Mr Kwarteng’s replacement, a move likely to signal a major shift in policy direction.

Earlier, Mr Kwarteng was summoned back early from the annual meeting of the International Monetary Fund in Washington to be told of his fate in a brief meeting with the Prime Minister in No 10.

A more centrist figure, Mr Hunt is unlikely to share Mr Kwarteng and Ms Truss’s ideological free market commitment to tax cuts. He previously served as Foreign Secretary under Theresa May and Health Secretary under David Cameron.

Mr Hunt was one of the most prominent supporters of Rishi Sunak during the Tory leadership campaign in the summer after he was knocked out of the running himself.

The MP for South West Surrey since 2005, Mr Hunt has been a backbencher since Boris Johnson took over from Mrs May in 2019.

He has been the chair of the Commons health and social care select committee since 2020.

His appointment is a sign that Liz Truss is trying to get her opponents on side in the wake of the mini-budget announcement which sparket market turmoil.

Kwarteng sacked by Truss

Mr Kwarteng’s dismissal follows weeks of turmoil after his £43 billion package of unfunded tax cuts spooked the financial markets.

In her letter to Kwasi Kwarteng, Liz Truss wrote: “Thank you for your letter. As a long-standing friend and colleague, I am deeply sorry to lose you from the government. We share the same vision for our country and the same firm conviction to go for growth.

“You have been Chancellor in extraordinarily challenging times in the face of severe global headwinds. The Energy Price Guarantee and the Energy Bill Relief scheme, which made up the largest part of the mini budget, will stand as one of the most significant fiscal interventions in modern times.

“Thanks to your intervention, families will be able to heat their homes this winter and thousands of jobs and livelihoods will be saved. You have cut taxes for working people by legislating this week to scrap the increase in National Insurance Contributions.

“You have set in train an ambitious set of supply side reforms that this Government will proudly take forward. These include new investment zones to unleash the potential of parts of our country that have been held back for too long and the removal of EU regulations to help British businesses succeed in the global economy.

“I deeply respect the decision you have taken today. You have put the national interest first. I know that you will continue to support the mission that we share to deliver a low tax, high wage, high growth economy that can transform the prosperity of our country for generations to come.

“Thank you for your service to this country and your huge friendship and support. I have no doubt you will continue to make a major contribution to public life in the years ahead.”

Mr Kwarteng’s departure may give Ms Truss some brief breathing space as she seeks to shore up her authority, but it also raises fresh questions about her chances of survival.

The Prime Minister is closely linked to Mr Kwarteng’s tax-cutting agenda having strongly defended his plan to get the economy going again.

The commitments to reverse a hike in national insurance rates and ditch a planned rise in corporation tax, without explaining how they would be paid for, were the key planks of her leadership election campaign.

The tax cut plans saw the pound plummeting against the dollar and the cost of government borrowing soaring, leading to the Conservatives see their opinion poll ratings tank.

Even before Mr Kwarteng’s sacking there were reports that Tory MPs were plotting to get rid of the Prime Minister amid fears she was set to lead them to certain defeat at the next general election.

There were reports that some MPs were looking to install her main rivals for the leadership - Rishi Sunak and Penny Mordaunt – on a joint ticket at the head of a new administration.