Who is Kwasi Kwarteng? Sacked after 38 days, one of the shortest-serving chancellors ever

Britain's new finance minister was removed after first policy announcement sparked turmoil

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Kwasi Kwarteng racked up only 38 days in the role of the UK's finance minister, the second shortest period of anyone to hold the post.

He narrowly avoided being the shortest-tenured chancellor in British political history. In 1970, Iain Macleod died after a month in office. Mr Kwarteng's predecessor Nadhim Zahawi survived 63 days in the job before being replaced.

Mr Kwarteng was the first appointment by Prime Minister Liz Truss when she took office on September 6, with the pair intent on shaking up “Treasury orthodoxy”. He also became her first sacking.

Shortly after he returned to the UK after cutting short a trip to Washington for an International Monetary Fund meeting, he was given the news that he was the fall guy for the chaos that has engrossed Downing Street after his mini-budget, which unleashed market chaos.

Mr Kwarteng had hoped to take down the economic groupthink that he and Ms Truss saw as holding Britain back.

He was always likely to be a renegade.

For some, Mr Kwarteng, a committed supporter of Brexit, has form for playing down market movements, with the Evening Standard newspaper reporting overheard comments he made on the night Britain stunned markets by voting to leave the EU.

“Who cares if sterling crashes?” he reportedly said. “It will come back up again.”

After a 10-day hiatus due to the official mourning of the death of Queen Elizabeth II, he set about introducing his ideas in a mini-budget intended to spark growth in the UK's economy to raise it out of the doldrums caused by the Russia-fuelled energy crisis.

Instead, he saw his first fiscal statement take down the value of the pound, the bond market, his party's reputation for financial credibility and his own political career.

Attempts to see off the inevitable by bringing forward the date for his fiscal plan to October 31 failed and an about-turn on the plans appeared the only option to restore calm.

What is Kwasi Kwarteng's background?

Britain's first black chancellor, Mr Kwarteng, 47, is the son of Ghanaian immigrants. He attended Eton, one of Britain's most prestigious private schools, which has been the alma mater of numerous politicians.

Mr Kwarteng achieved a “double first” at the University of Cambridge in classics and history, and went on to attend Harvard University in the US.

He also managed to swear twice during an appearance on the long-running TV quiz programme University Challenge.

Kwasi Kwarteng carries his growth plan in Downing Street. Reuters

Plan to shake up economy

Charged with delivering Ms Truss's vision of running the country on a low-tax agenda, which persuaded Conservative members to choose her as leader over former chancellor Rishi Sunak, Mr Kwarteng fired the Treasury's most senior official and unveiled a series of unfunded tax cuts to try to turn “the vicious cycle of stagnation into a virtuous cycle of growth”.

What he unleashed was a vicious cycle of falling market confidence, flight from British assets and such damage to the British bond markets that the Bank of England was forced to start buying bonds.

It also led to a ticking off from the International Monetary Fund, which usually reserves such admonishments to emerging economies, not G7 members.

Mr Kwarteng battled hard to avoid rowing back on his plans or resigning. On the contrary, he was given public support by Ms Truss.

In the past few weeks she took to the airwaves in a quick-fire round of interviews in which she insisted she had the “right plan” for the country, and spoke at Conservative Party conference at which she was fulsome in her praise.

She defended Mr Kwarteng’s measures, insisting “urgent action” was needed, although she admitted the government’s decisions had been “controversial”.

However, investors, traders, government officials and even some politicians from the ruling Conservative Party were increasingly of the view that to fix the situation, policy reversals were necessary.

Ms Truss clearly felt Mr Kwarteng needed to go to attempt to put some distance between herself and the chancellor and save her premiership.

Tories in trouble

The Tories are in turmoil once more. Support for the governing Conservative Party has sunk, several polls have shown, with confidence in the leadership team shot to pieces.

A “dream ticket” of Rishi Sunak and Penny Mordaunt has been mooted to replace Ms Truss, but that would mean a third prime minister this year.

Ally of Liz Truss

In Mr Kwarteng, Ms Truss picked a key ideological ally with whom she co-wrote a book that spells out a low-tax, small-state, deregulated vision of Britain.

A politician since 2010 and economic historian known for his intellect, some said Mr Kwarteng didn't have the experience to run the huge finance ministry.

A veteran Conservative source said before his appointment that the Treasury would “approve of his brain [but] disapprove of his independence”.

That desire to do things differently was exemplified when he immediately fired Tom Scholar as permanent secretary to the Treasury, with Mr Scholar saying “the chancellor decided it was time for new leadership.”

Paul Johnson, director of the Institute for Fiscal Studies, said the fallout from the mini-budget showed why economic “orthodoxy” should be welcomed as evidence-based knowledge.

“It needs testing and challenging but experience tells us that simply dismissing it is dangerous indeed,” he said on Twitter.

The determination of Ms Truss and Mr Kwarteng to sideline doubting voices was also reflected in the make-up of the first Cabinet of ministers, where no backers of leadership rival Mr Sunak were given roles.

Mr Sunak had warned during the leadership campaign that Ms Truss's plans would put Britain's economic credibility in jeopardy but she dismissed his caution as “negative, declinist language”.

Liz Truss and Kwasi Kwarteng visit a factory in Kent on the day the chancellor delivered his mini-budget. Reuters
Updated: October 14, 2022, 12:47 PM