London: On Monday the Prime Minister of the United Kingdom Liz Truss handed a junior trade minister’s job to an ally of her leadership rival Rishi Sunak, in a move seen as an endeavor to rally the governing Conservative Party behind her and curb rebellious moves on the backbenches.
Greg Hands, a vocal ally of the former Indian-origin Chancellor, replaced Conor Burns as Minister of State in charge of Trade Policy in the Department for International Trade (DIT) after the latter was sacked recently following charges of significant misconduct.
Hands was one of Sunak’s high-profile supporters in the Conservative Party leadership contest and his consideration was welcomed by other Sunak followers as a sign that Truss wants to construct bridges with that faction of the party.
“No one is more experienced and knowledgeable than Greg Hands on trade. A welcome addition back to the Liz Truss government,” tweeted former Transport Secretary Grant Shapps, also a staunch Sunak ally.
Sunak, the first British Indian candidate to compete for the top seat at 10 Downing Street, was defeated in the Tory membership voting round last month after being a steady frontrunner to replace Boris Johnson among the governing party’s MPs in the shortlisting phase of the leadership battle in July.
Hands said it was “an honor and a great privilege” to be part of the government, and is likely to also be engaged in the ongoing India-UK free trade agreement (FTA) negotiations- believed to be in their last stages ahead of the proposed Diwali deadline.
The new appointment comes at a time when there are developing fears of a backbench conflict within the Tory party since the government’s embarrassing U-turn over a key tax announcement abolishing the top rate of income tax for the wealthiest.
Truss and her Chancellor, Kwasi Kwarteng, have been under pressure since the declaration of a mini-budget last month unleashed turmoil on the financial markets and sent the pound diving against the dollar.
On Monday, the Bank of England announced further intercession to shore up the markets by doubling the value of UK government bonds it can purchase.
The central bank has said that it is ready to purchase GBP 10 billion worth of bonds a day, double the GBP 5 billion a day it announced in the wake of the mini-budget.
The government bonds, alluded to as gilts, are used by the state to raise funds and the central bank had stepped in with the temporary measure of purchasing long-dated gilts in an effort to safeguard the country’s pension funds and calm the markets.
Meanwhile, Kwarteng has presented a planned fiscal statement for October 31- nearly a month ahead of its previous schedule of November 23.
The UK’s Treasury department declared that the so-called “Medium-Term Fiscal Plan” alongside an independent Office of Budget Responsibility (OBR) estimate will now be published at the end of this month instead.
The fiscal statement is supposed to detail how the Chancellor means to pay for the nearly GBP 45 billion worth of tax cuts announced in the mini-budget and also how he plans to pay off the country’s debt.
There had been a mounting strain on the government to bring forward the fiscal declaration to curb fears over spiraling debt and unfunded tax cuts reductions already soaring inflation and interest rates.