The new Prime Minister has been urged by a banking expert to keep Jeremy Hunt as Chancellor to help stabilise public finances. But do you agree that Mr Hunt should remain in his position? Vote in our poll.
Professor Sir Charlie Bean, a former deputy governor of the Bank of England, warned against the new Prime Minister replacing Mr Hunt as Government borrowing rose to £20billion last month.
He said on BBC Radio 4’s The World at One: “Whoever comes in pretty much has to accept whatever Jeremy Hunt has planned for the fiscal statement. What you couldn’t really have is a comprehensive re-opening of the issues.
“It would be even worse if the new Prime Minister decided to replace Jeremy Hunt with another chancellor. That really would create a lot of volatility in the financial markets.
“There has really to be an acceptance on the part of whoever takes over that they will defer to Jeremy Hunt.”
READ MORE: New PM ‘must stick with Hunt and his plans for recovery’
Former Prime Minister Liz Truss appointed Mr Hunt as Chancellor following her decision to sack Kwasi Kwarteng after backlash over his mini-budget. He has since vowed to do “whatever necessary” to lower Government debt and was due to deliver his Budget on October 31, to set out the nation’s medium-term fiscal plan following the U-turns on the mini-budget.
However, the three-day turnaround between the end of the Tory leadership contest and the budget could force the announcements to be delayed.
Carl Emmerson, deputy director of the Institute for Fiscal Studies, said: “Given the timeline for determining the next Prime Minister, the degree of economic uncertainty, and the importance of getting this right, there is a strong case for taking a bit longer.”
He added that Britain needs “good decisions which have more chance of standing the test of time, rather than going ahead with a major fiscal event only a few days into the new PM’s tenure”.
Lord O’Donnell, formerly the UK’s most senior civil servant, also argued that the leadership contest needed to be concluded “very, very quickly” to allow for Mr Hunt’s budget to go ahead.
He told BBC Radio 4’s Today programme: “I think everyone will be hoping that the leadership election is finished very, very quickly because you would like to stick with the Oct 31 date.
“Obviously the new Prime Minister will want to talk to whoever ends up being their Chancellor and get this fix out because as you say, Monetary Policy Committee on the 3rd of November, if there is still uncertainty then you can see them going further on interest rates and that is not ideal in any circumstance.
“So I think everyone will be trying to say please, please, can we get this done quickly and what the markets will look at as well is not just if it is done quickly but is it done in a way that delivers a leader that can then lead the party and have a majority in the House of Commons.”
Former Boris allies throw their support behind Rishi – ‘our best bet’ [LATEST]
Mordaunt is the unifying leader our country needs [COMMENT]
Boris and Rishi hold crunch talks about PM power sharing [UPDATE]
Commons Leader Penny Mordaunt, the only contender to formally declare candidacy so far, has pledged to keep Mr Hunt as Chancellor in a bid to allow continuity and stability in economic policy.
She shared her plans to “unite the party and the country” writing for Express.co.uk. She said that the Tories have “become distracted by internal disputes” but now was the time to “make Brexit work” and deliver the Party’s 2019 manifesto to improve the country’s economic growth.
She said: “As with the country, so with the party. I want to lay out a plan for our future which offers health, wealth and security for everyone, and I want to bring the Conservative Party together to deliver it for the people of the United Kingdom.
“I want a government which draws from all our best talent, not cherry-picked for personal loyalties. As Prime Minister, I will create that team of Conservatives, we will get real, and we will get to work.”
So what do YOU think? Should Jeremy Hunt remain as Chancellor under the new Prime Minister? Vote in our poll and leave your thoughts in the comment section below.