Zahawi ‘to push for tax cuts’ after replacing Sunak

New Chancellor: Nadhim Zahawi

Boris Johnson moved swiftly to install Nadhim Zahawi as Chancellor to fill the void left by Rishi Sunak’s resignation in a move designed to bring stability to the markets and shore up his own position.

He also appointed Downing Street chief of staff Stephen Barclay as Health Secretary to replace Savid Javid after he was the first to quit the Cabinet in a night of drama in Westminster.

The decision by Mr Sunak and Mr Javid to resign, which came with minutes of each other, followed another grovelling apology from the Prime Minister, this time over his appointment of shamed MP Chris Pincher, though Mr Sunak stressed that other issues drove him to resign.

Mr Johnson will hope that moving quickly to fill two key Cabinet posts will steady nerves on the markets. It was also taken as a clear signal that he will not be resigning as Prime Minister.

He was due to faced MPs at Prime Minister’s Questions. He was later giving evidence to the Liaison Committee – a group of MPs who scrutinise the government’s policy and decisions. There is also talk of a rule change that will allow for another confidence vote.

The pound hit a fresh two-year low after the ministers resigned over their lack of faith in the Prime Minister’s leadership. The currency was down 1.5% against the dollar, sinking to $1.1923.

Rishi Sunak and Sajid Javid resigned within minutes of each other

The new chancellor is expected to push for early tax cuts, a reversal of the corporation tax rise to 25% from next April, and a further cut in fuel duty as he tackles a number of severe challenges. Inflation is running at a 40-year high, the cost of borrowing is likely to rise further and the economy is poised to enter recession.

The Bank of England had earlier warned that the outlook had “deteriorated materially” sending a shiver through London’s stock market. The FTSE 100 plummeted by 207 points. That was before the resignations from Cabinet.

More senior MPs resigned as the Prime Minister’s problems appeared to be weakening by the hour.

Boris Johnson
Boris Johnson: clinging on to office

In his resignation letter, Mr Sunak told the PM that “we cannot continue like this”. He added: “The public rightly expect Government to be conducted properly, competently and seriously.

“I recognise this may be my last ministerial job, but I believe these standards are worth fighting for and that is why I am resigning.”

Meanwhile, Mr Javid publicly questioned Mr Johnson’s integrity, competence and ability to act in the national interest.

He told the PM: “It is with enormous regret that I must tell you that I can no longer, in good conscience, continue serving in this Government.

“I am instinctively a team player but the British people also rightly expect integrity from their Government.”

In a cordial letter to Mr Sunak, Mr Johnson thanked him for his role in tackling the Covid challenge and said he would miss working with him.

It is the second time Mr Javid has resigned from the Johnson government, having stood down as Chancellor.

Senior Tories urged Mr Johnson’s top team to pull the plug on his premiership after No 10 admitted he knew a misconduct complaint was upheld against the man he made deputy chief whip.

However, it is understood that Foreign Secretary Liz Truss, Justice Secretary Dominic Raab, Business Secretary Kwasi Kwarteng, Culture Secretary Nadine Dorries, Trade Secretary Anne-Marie Trevelyan and Brexit minister Jacob Rees-Mogg will stick by the beleaguered PM.

Labour leader Sir Keir Starmer said: “After all the sleaze, the scandals and the failure, it’s clear that this Government is now collapsing.

“Tory cabinet ministers have known all along who this Prime Minister is. They have been his cheerleaders throughout this sorry saga. Backing him when he broke the law. Backing him when he lied repeatedly. Backing him when he mocked the sacrifices of the British people.

“In doing so, they have been complicit every step of the way as he has disgraced his office and let down his country.

“If they had a shred of integrity they would have gone months ago.

“The British public will not be fooled. The Tory party is corrupted and changing one man won’t fix that.

“Only a real change of government can give Britain the fresh start it needs.”

Scottish Labour leader Anas Sarwar said: “This is rats deserting a sinking ship. 

“We all know the Boris Johnson is a morally bankrupt and corrupt Prime Minister, and he’s leading a corrupt out of touch Tory government.

Scotland’s First Minister Nicola Sturgeon said “the whole rotten lot” in Boris Johnson’s Westminster government should go.

She said: ‘Feels like end might be nigh for Johnson – not a moment too soon. Notable though that the resigning ministers were only prepared to go when they were lied to – they defended him lying to public.

“The whole rotten lot need to go. And needs the permanent alternative of independence.”

Johnson stumbles through TV interview

The resignations came as Mr Johnson was being interviewed on television. The following is an edited version.

He was asked: ” Prime Minister, do you accept it was a grave error to appoint Chris Pincher to your Government?

Prime Minister: Yes, I think it was a mistake and I apologise for it. I think, in hindsight, it was the wrong thing to do. I apologise to everybody who’s been badly affected by it. I just want to make absolutely clear that there’s no place in this Government for anybody who is predatory or who abuses their position of power.

Q: Did you once joke ‘both Pincher by name, Pincher by nature’?

Prime Minister: Well, what I can tell you is that if I look at the background of this, and why I regret it so much, is that about three years ago, there was a complaint made against Chris Pincher in the Foreign Office. The complaint was cleared up, he apologised, it was raised with me. Already I was briefed on what had happened. And, you know, if I had my time again I would think back on it and recognise that he wasn’t going to learn anything and he wasn’t going to change and I regret that.”

Q: Let’s look at what your spokespeople have said. On Friday your official spokesman said you were not aware of specific allegations. Bluntly, that wasn’t true, was it?

Prime Minister: Well, what is certainly… let me tell you what is true. I was aware back in 2019, I was made aware of a specific allegation against Chris Pincher that was resolved…

Q: What do you say to the person listening to our conversation tonight? Who simply says: ‘Look, I can’t trust the Prime Minister any more. He’s just not telling the truth.’

Prime Minister: Well, I’m giving you the absolute truth as far as I can remember about what happened.

Q: Can people trust you?

Prime Minister: Of course they can. I’m telling you exactly what happened. And I’m coming out to explain it.”

Comment: Zahawi must focus on tax and investment

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