After being in office for 38 days, Kwasi Kwarteng, the British-born politician of Ghanaian parentage was sacked by Prime Minister Liz Truss as the Chancellor of the Exchequer.
The dismissal was after Kwarteng presented a mini-budget which resulted in financial turbulence and revolt from Conservative Party lawmakers.
While presenting the mini-budget on 23 September, an eye-watering £45 billion in tax cuts alongside an energy relief plan projected to cost £60 billion over the next six months was announced by Kwasi Kwarteng.
This, according to various media reportage was a huge departure from the fiscal policy of the Johnson government, which had planned tax rises to pay for health and social care and to manage the post-Covid deficit.
Kwarteng claimed his ambitious plans would drive growth and reduce inflation.
The financial markets disagreed: in the days after his announcement, lenders pulled mortgage packages, the pound hit a record low against the dollar, and the Bank of England started buying bonds at ‘an urgent pace’ to calm the markets and stop pension funds going bust.
In a high-risk strategy designed to revive Britain’s stagnant economy, the British of Ghanaian descent announced more than £400bn of extra borrowing over the coming years to fund the biggest giveaway since Tony Barber’s ill-fated 1972 budget.
The Guardian reported that the Conservative MP said tax cuts worth more than £55,000 annually to someone earning £1m a year were part of a new direction for the economy and were designed to help boost growth to 2.5% a year. Some Labour MPs described them as a “class war”.
The Treasury admitted there were no forecasts for the impact of the measures on growth and the gamble received a hostile reception not just from the markets and opposition politicians, but from economic think tanks and many Tory MPs, some of whom were aghast.
The police in the Ashanti Region on Thursday, October 13 arrested two armed robbers after a specialised intelligence operation.
One other robber attempted to fire at the police but he was overpowered by returned fire, leaving him dead upon arrival at the hospital.
According to a statement issued by the Director of Public Affairs at the Ghana Police Service, Grace Ansah-Akrofi, the deceased, whose name was given as Issaka Muniru, was wanted after jumping bail at the court.
He had led a gang to rob a pastor of his two gold watches and mobile phones on May 26, 2021.
“The deceased was granted bail by the court but he jumped the bail and a bench warrant was therefore issued for his arrest,” the police statement said.
“His accomplices are still attending trial at the court.”
In another robbery instance, he was arrested among four “but he managed to escape”.
The three suspects have since been remanded into prison custody.
The police commended the Ashanti Regional Police Command, especially personnel of the Regional Intelligence and Operations teams, for leading the operation.
“We would like to assure the public that we will continue to carry out our constitutional mandate of protecting life and property and maintaining law and order even at the peril of our lives.”
Kwasi Kwarteng has written to the Prime Minister of the UK, Liz Truss, indicating that he has accepted her decision to sack him.
The outgoing Chancellor of the Exchequer of the United Kingdom was at post for only six (6) weeks, making him only second in the history of the country to have served this briefly in the office.
In an earlier report by the BBC, it said that Kwasi Kwarteng’s sacking was influenced from a mini-budget he presented that has since sparked financial turmoil and revolt from Conservative Members of Parliament.
In a response to the news, the British-born Ghanaian politician said that even before taking up the job, he knew he could not tow the lines of those before him, thereby the need to adopt more drastic approaches.
Accepting the decision, he added that he knew the country’s fight against its current difficult economic challenges would be a tough one.
“You have asked me to stand aside as your Chancellor. I have accepted.
“When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.
“As I have said many times in the past weeks, following the status quo was simply not an option,” he wrote in a statement.
Kwasi Kwarteng also explained that while the challenges exist, he is optimistic in the vision of the Prime Minister, knowing too from many years of friendship with her that she is making the right decision.
“For too long this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.
“The economic environment has changed rapidly since we set out the Growth Plan on September 23. In response, together with the Bank of England and excellent officials at the Treasury we have responded to those events, and I commend my officials for their dedication.
“It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches.
“We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one. It has been an honour to serve as your first Chancellor,” he wrote.
Kwasi Kwarteng’s six-week tenure as the Chancellor of the Exchequer of the UK has been dogged with a few major incidences, including the British press calling him out for smiling during the funeral of Queen Elizabeth II.
Kwasi Kwarteng became the first black person to become UK’s Chancellor of the Exchequer (Finance Minister) following his appointment by UK Prime Minister, Liz Truss, on September 6, 2022.
Kwarteng was born Akwasi Addo Alfred Kwarteng in Waltham Forest, East London, in May 1975 to Ghanaian parents, Alfred and Charlotte, who had both immigrated to the United Kingdom a decade earlier as students.
His parents, who went on to become an international economist and a barrister respectively, sent him to an expensive private prep school that produced numerous Cabinet-level politicians. He then attended the famous Eton college – a production line for British leaders including Boris Johnson and David Cameron.
The Bank of England‘s help with the markets has finished today (see 4.04 pm post).
But what have today’s events done to the markets?
As Sky News business presenter Ian King explained: “30-year-gilts spiked earlier this week – hitting 5.1%, the highest level since 2002.
“That was on the back of comments made by Andrew Bailey, the governor of the Bank of England overnight on Tuesday that said pension funds only had three days in which to sort this issue out with today being the final deadline.
“The Bank started buying gilts more heavily on Wednesday and Thursday.
“You can see there on the chart the rumours in the middle of yesterday that the government was going to have to U-turn further on its mini-budget.
“And then we had rumours Kwasi Kwarteng was going to go – so you saw yields fall very, very sharply.
“They fell to as low as 4.1% this morning – a colossal move in terms of the scope of these things from 5.1% on Wednesday.
“Then we had confirmation that Mr Kwarteng had resigned – or been sacked – and you saw Liz Truss speak.
The higher the bond yield is, the more the government is going to have to pay for borrowing money.
The pound has also been tumultuous today – falling with Mr Kwarteng’s sacking, rising on Mr Hunt’s appointment, and falling on Ms Truss’s press conference.
According to a Reuters report attributing the development to the UK Times newspaper, Liz Truss is preparing to reverse a decision announced in the country’s mini-budget which was delivered by Kwasi Kwarteng.
The mini-budget has since sparked financial turmoil in the markets and caused a revolt among Conservative MPs in the UK.
“I’m told that Kwasi Kwarteng is being sacked as Chancellor as Liz Truss prepares to reverse the mini-Budget,” Steven Swinford, Political Editor of The Times said on Twitter.
“Not clear who will be replacing him,” Swinford added.
His appointment came at a crucial time when the country is facing a high cost of living, public sector layoffs, and among others.
Kwasi Kwarteng after his appointment became the first black person to hold the position.
British Prime Minister to announce tax cuts:
Meanwhile, it is expected that Prime Minister, Truss will hold a news conference in due course, as speculation builds that the government could reverse more of the tax cuts announced in its mini-budget.
Earlier, a No 10 Downing source told the BBC that Truss thought the chancellor was “doing an excellent job”
The PM faces growing calls from within her party to rethink her economic plans, with one Tory MP telling the BBC: “It’s checkmate, we’re screwed”, the BBC further reported.
Background:
Kwasi Kwarteng, 47, took over as head of the British Treasury in September 2022, after new UK Prime Minister, Liz Truss, took over; with the responsibility of trying to pull the UK out of a serious cost-of-living crisis without plunging the public finances into the abyss.
He took over from Nadhim Zahawi, an Iraqi-born Kurd, who himself succeeded Rishi Sunak, of Indian origin, and Sajid Javid, with Pakistani roots, embodying a more inclusive face of the Conservative party.
His sack makes him the second shortest-serving UK chancellor on record.
The shortest serving chancellor, Iain Macleod, according to the BBC, died of a heart attack 30 days after taking the job in 1970.
Since 2019, the UK has had four chancellors, including Nadhim Zahawi who served the third shortest tenure with 63 days during a short-lived reshuffle under Boris Johnson, and Sajid Javid who served 204 days – the fourth shortest tenure on record.
She has sacked her chancellor, committed a second major U-turn on her mini-budget, and junked the core of her economic policy.
And she did so, awkwardly and uncomfortably, in no more than 8 minutes.
In an excruciating new conference – so short that the gathered political press pack were left open-mouthed as she departed – Liz Truss made her already perilous political position even worse.
The aim of this breakneck change in direction was to attempt to calm markets and her Conservative colleagues, but instead, she left huge questions unanswered.
It’s worth underlining the significance of what the prime minister just announced.
First, on policy, she has buckled and reversed her position on corporation tax. She will now go ahead with the increase proposed by her leadership rival, Rishi Sunak.
During the contest to replace Boris Johnson as Tory leader, Ms Truss had said increasing the rate from 19% to 25% next April would “put off people who want to invest in Britain” and amount to “cutting off our nose to spite our face.”
It was a significant part of the platform on which she was elected Tory leader, now humiliatingly discarded in order to bring in around £18 billion to fill the black hole left by last month’s mini-budget.
She said it was a “down payment” on the medium-term fiscal plan due to be set out on 31 October – a signal to the markets that she’s prepared to make more reversals if necessary.
Does she still believe it will put people off investing? We don’t know because she didn’t stick around at the news conference long enough to be asked.
On the sacking of Kwasi Kwarteng as chancellor, she expressed her sorrow – but again, did not answer the obvious question about how she can possibly justify his departure without her own.
The chancellor, who was supposed to be one of her closest political friends, was also humiliatingly discarded – along with the government’s radical economic mission for which she had asked him to lead the charge.
The way in which the prime minister delivered this news really matters. Not just because of the lack of scrutiny that came from only taking four questions and barely engaging with them in the answers – but because her party, and indeed the markets, will have been watching to see how she handled the situation.
That news conference was not just about communicating with the public. The messages I received from Conservative MPs ahead of the news conference made clear that she needed to put in a really strong, reassuring performance.
Their fears are that she is out of her depth. They want to see that she can handle being prime minister. And the early signs are that her performance today failed on both fronts.
One MP has messaged me saying that it was “shockingly bad”, even by Liz Truss’s standards.
Jeremy Hunt’s installation as the new chancellor may be intended to show the ship is being steadied – that someone with deep experience in government is at the helm of the economy and that markets do not need to fear further surprises.
But power flows from Number 10. The prime minister is the head of government.
The prime minister is the person who must command the confidence of the Commons if they are to remain in post.
This prime minister looks out of her depth. “It’s not going to last,” is how one cabinet ministerput it to me.
DISCLAIMER: Independentghana.com will not be liable for any inaccuracies contained in this article. The views expressed in the article are solely those of the author’s, and do not reflect those of The Independent Ghana
Gabby Asare Otchere-Darko, a prominent member of the New Patriotic Party, has stated what may be characterized as his displeasure over Kwasi Kwarteng’s dismissal as the UK finance minister.
On Friday, October 14, British Prime Minister Liz Truss removed Kwasi Kwarteng, a Ghanaian-born British finance minister, from his position.
The decision was made as a result of the mini-consequences, budget’s which led to market volatility and a revolt among UK Conservative MPs, according to the BBC, which confirmed the news.
Reacting to the news, Gabby Otchere-Darko took to his Twitter and wrote; ‘The politics of scapegoatism’ to suggest that Kwasi Kwarteng despite being in office for only six weeks suffered the ill consequences of being a political scapegoat.
His appointment came at a crucial time when the country is facing a high cost of living, and public sector layoffs, among others.
Kwasi Kwarteng after his appointment became the first black person to hold the position.
See Gabby Otchere-Darko’s tweet below:
The politics of scapegoatism.
— Gabby Otchere-Darko (@GabbyDarko) October 14, 2022
British Prime Minister to announce tax cuts:
Meanwhile, it is expected that Prime Minister, Truss will hold a news conference in due course, as speculation builds that the government could reverse more of the tax cuts announced in its mini-budget.
Earlier, a No 10 Downing source told the BBC that Truss thought the chancellor was “doing an excellent job”
The PM faces growing calls from within her party to rethink her economic plans, with one Tory MP telling the BBC: “It’s checkmate, we’re screwed”, the BBC further reported.
‘I am not going anywhere’ – Kwasi Kwarteng
0 seconds of 7 secondsVolume 90%
Background:
Kwasi Kwarteng, 47, took over as head of the British Treasury in September 2022, after new UK Prime Minister, Liz Truss, took over; with the responsibility of trying to pull the UK out of a serious cost-of-living crisis without plunging the public finances into the abyss.
He took over from Nadhim Zahawi, an Iraqi-born Kurd, who himself succeeded Rishi Sunak, of Indian origin, and Sajid Javid, with Pakistani roots, embodying a more inclusive face of the Conservative party.
His sack makes him the second shortest-serving UK chancellor on record.
The shortest serving chancellor, Iain Macleod, according to the BBC, died of a heart attack 30 days after taking the job in 1970.
Since 2019, the UK has had four chancellors, including Nadhim Zahawi who served the third shortest tenure with 63 days during a short-lived reshuffle under Boris Johnson, and Sajid Javid who served 204 days – the fourth shortest tenure on record.
The British diplomatic service copes well with fast-changing plans… and for the staff of the British Embassy in Washington, from the ambassador to the chefs, Thursday evening was one to remember.
The (now ex) chancellor was in town for the IMF annual gathering. He’d already missed key meetings throughout the day.
I’d watched an aide, red government folder in hand, dash across the IMF atrium to tell organisers that Kwasi Kwarteng’s deputy would take his seat. Something was afoot.
By early evening the intrigue shifted to the British Embassy.
I joined a couple of hundred guests for a drinks reception hosted by theambassador and the Institute of International Finance. The chancellor was the guest speaker.
He came, he spoke, he was confident, he was relaxed. But the dinner organised for later at the ambassador’s residence was off. The staff had been told to prepare drinks and canapés instead.
We journalists were encouraged to leave the reception and head to the residence. The chancellor had something to tell us.
And so, after a scuttle through the Washington rain from embassy to residence, I found myself listening to a chancellor – white wine in hand – reveal that he would be leaving the IMF on the red-eye flight to London.
Important talks on the fiscal plan, we were told.
Within 10 hours he’d been fired.
DISCLAIMER: Independentghana.com will not be liable for any inaccuracies contained in this article. The views expressed in the article are solely those of the author’s, and do not reflect those of The Independent Ghana
Source: SkynewsBy Mark Stone, US correspondent in Washington DC
Kwarteng, the first Black person to hold the role, changed his mind shortly after delivering the UK mini-budget, causing market volatility and considerable opposition to the tax cut.
The decision also sparked a rebellion among British Conservative MPs, but Kwasi Kwarteng persisted.
When questioned if he will yet again make a U-turn on certain sections of the mini-budget, Kwasi Kwarteng said “our position hasn’t changed.”
He was also asked if he was confident that he and British Prime Minister Liz Truss would remain in their positions in the coming months, to which he boldly said, “absolutely, 100%.”
But the stance has now changed as Kwasi Kwarteng has been fired from his position as the UK Chancellor of the Exchequer after serving in office for six weeks.
The announcement was made on Friday, October 14, 2022, after he was reported to have rushed back to the UK while attending the IMF/World Bank annual meetings in Washington DC, USA.
British Prime Minister to announce tax cuts:
Meanwhile, it is expected that Prime Minister, Truss will hold a news conference in due course, as speculation builds that the government could reverse more of the tax cuts announced in its mini-budget.
Earlier, a No 10 Downing source told the BBC that Truss thought the chancellor was “doing an excellent job”
The PM faces growing calls from within her party to rethink her economic plans, with one Tory MP telling the BBC: “It’s checkmate, we’re screwed”, the BBC further reported.
Kwasi Kwarteng, 47, took over as head of the British Treasury in September 2022, after new UK Prime Minister, Liz Truss, took over; with the responsibility of trying to pull the UK out of a serious cost-of-living crisis without plunging the public finances into the abyss.
He took over from Nadhim Zahawi, an Iraqi-born Kurd, who himself succeeded Rishi Sunak, of Indian origin, and Sajid Javid, with Pakistani roots, embodying a more inclusive face of the Conservative party.
His sack makes him the second shortest-serving UK chancellor on record.
The shortest serving chancellor, Iain Macleod, according to the BBC, died of a heart attack 30 days after taking the job in 1970.
Since 2019, the UK has had four chancellors, including Nadhim Zahawi who served the third shortest tenure with 63 days during a short-lived reshuffle under Boris Johnson, and Sajid Javid who served 204 days – the fourth shortest tenure on record.
Jeremy Hunt, one of the faces of the One Nation Conservative camp within the Tory party, is the new chancellor under a Liz Truss government.
Ideologically they may see eye to eye on keeping corporation tax low – Hunt told Sky’s Sophy Ridge in July he not only wanted the tax not to rise but he wanted it slashed further – but Hunt is by no means seen as an obvious bedfellow for the prime minister.
For example, health secretary, Hunt was in favour of banning junk food adverts before 9 pm as part of a push to reduce childhood obesity. This policy was never implemented, however, as it was seen as a ‘nanny-state’ policy. This is just one example to suggest that these two heavy hitters could end up falling out.
Will Liz Truss’s libertarian instincts put her at loggerheads with her new chancellor? Or will the ideological differences between them make for a more balanced dialogue around the cabinet table?
Strategically, Truss will be hoping that appointing Hunt will assuage Tory anger and bring back the One Nation MPs out for blood. But Hunt inspires a lukewarm reaction (at best), even among sympathetic MPs.
Firstly, he was not even able to gain enough support from fellow MPs in the latest leadership race to make it past the first round of voting.
Secondly, one former cabinet minister told me: “He brings no one with him” and is “yesterday’s man”. Another former minister pleased with the hire said they were happy but not excited, and that it made little difference to Truss’s life expectancy as prime minister: “She cannot reassert her authority after this. It’s over.”
Although sacking Kwasi Kwartengmay look like a sign of strength from Truss, she has now amputated her own political right arm, making her life ten times harder.
Kwarteng and Truss were seen as ideological soulmates, something mirrored in Truss’s letter to her former chancellor where she said: “We share the same vision for our country”.
And now rebellious Tory backbenchers know the lady is for turning, she will be pulled in every which way by the increasingly divided factions of her chaotic party until she is ripped apart beyond repair.
DISCLAIMER: Independentghana.com will not be liable for any inaccuracies contained in this article. The views expressed in the article are solely those of the author’s, and do not reflect those of The Independent Ghana
The calls for the sacking of Ghana’s Finance Minister, Ken Ofori-Atta, have reignited following the sacking of the UK’s Finance Minister, Kwasi Kwarteng, early on Friday.
The UK’s Chancellor of Exchequer was sacked by British Prime Minister Liz Truss on Friday, October 14, 2022, after just six weeks of his appointment.
His dismissal has largely been attributed to the performance of the British economy over the last few weeks and the failure of his mini-budget to result in a positive impact.
The announcement of his sacking has seen several Ghanaians take to social media to demand the sacking of Ghana’s finance minister.
Ken Ofori-Atta has been the subject of some critics calling for the heads of some officials in the current government.
The calls are largely grounded in the current performance of the Ghanaian economy and the current economic hardship.
See some social media reactions below:
Stop bothering yourself, fellow Ghanaians. @NAkufoAddo won’t learn from the UK. Tweaa!! Ken Ofori Atta means more to him, personally, than the good of Ghana & your welfare. Nepotism! Corruption! Clueless! Incompetent!
Let’s head roll in Ghana…Kwasi Kwarteng didn’t exhibit a quarter of Bawumia and Ken Ofori-Atta incompetence but he’s been sacked…what is @NAkufoAddo waiting for to sack his Finance Minister and @MBawumia as head of EMT??? pic.twitter.com/05wrrTgkmB
Them sack Kwasi Kwarteng in less than 6 weeks but Ofori-Atta is in his 6th year as our Finance Minister.???????????????????? pic.twitter.com/bwgIOkMMKC
You see difference in Ghana n UK? Kwasi Kwarteng came in and within a month or so of incompetence he’s fired by Liz Truss! Bawumia and Ken Ofori Atta have been incompetent for 6 years now and they are still at post! And you want Ghana to develop? Nana Addo Danquah Akufo-Addo why?
— Is RAYOE in your playlist?!❤️???? (@GhanaSocialU) October 14, 2022
Kwasi Kwarteng sacked in less than 7 weeks being appointed as Finance Minister in the UK but Ken Ofori Atta is still the Finance Minister in this economic woes for 6 years?
Clearly, Ghana’s Presidency doesn’t have serious goals.
In UK Kwesi Kwarteng has been sacked after 40 days as chancellor while in Ghana Ken Ofori Atta still maintains power after almost 6 yrs with more than 120% cedi depreciation.. ???? ????
The system in UK functions very well and effectively. In other news, Ken Ofori-Atta is still Ghana’s Finance Minister.
When we say life no balance, this is what we mean pic.twitter.com/Y4hwyy04et
Kwasi Kwarteng hasn’t done a fraction of the damage Ken Ofori-Atta has caused the Ghanaian economy but he gets to be sacked and Ken is showered with praises from his family member, President H.E @NAkufoAddo as Ghanaians languish in more pain.
Sad — no justice in the world. ????????
— Kwame Gabby Emu Ye ???????? ???????? (@KwameEmuYe) October 14, 2022
A lady Liz Truss even have the balls sack her chancellor for non performance and we have Akufo Addo always applauding Ken Ofori Atta when the cedi is now 12.10 to a dollar
Kwarteng was fired on Friday, October 14 as a result of fallout from a mini-budget he delivered. Kwarteng was the Chancellor of the Exchequer of the United Kingdom for only six (6) weeks.
The budget has since prompted market instability and a rebellion among UK Conservative parliamentary members.
The Ghanaian, who was born in Britain, confessed in a statement made public after his dismissal that he knew even before accepting the position that he could not follow in the footsteps of those who came before him and that he would need to take more extreme measures.
“You have asked me to stand aside as your Chancellor. I have accepted.”
“When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.
“As I have said many times in the past weeks, following the status quo was simply not an option,” he wrote in a statement.
“For too long this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.
“The economic environment has changed rapidly since we set out the Growth Plan on September 23. In response, together with the Bank of England and excellent officials at the Treasury we have responded to those events, and I commend my officials for their dedication.
“It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The Medium-Term Fiscal Plan is crucial to this end, and I look forward to supporting you and my successor to achieve that from the backbenches.
“We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one. It has been an honour to serve as your first Chancellor,” he wrote.
Kwasi Kwarteng’s six-week tenure as the Chancellor of the Exchequer of the UK has been dogged with a few major incidences, including the British press calling him out for smiling during the funeral of Queen Elizabeth II.
British Prime Minister to announce tax cuts:
Meanwhile, it is expected that Prime Minister, Truss will hold a news conference in due course, as speculation builds that the government could reverse more of the tax cuts announced in its mini-budget.
Earlier, a No 10 Downing source told the BBC that Truss thought the chancellor was “doing an excellent job”
The PM faces growing calls from within her party to rethink her economic plans, with one Tory MP telling the BBC: “It’s checkmate, we’re screwed”, the BBC further reported.
Kwasi Kwarteng became the first black person to become UK’s Chancellor of the Exchequer (Finance Minister) following his appointment by UK Prime Minister, Liz Truss, on September 6, 2022.
Kwarteng was born Akwasi Addo Alfred Kwarteng in Waltham Forest, East London, in May 1975 to Ghanaian parents, Alfred and Charlotte, who had both immigrated to the United Kingdom a decade earlier as students.
His parents, who went on to become an international economist and a barrister respectively, sent him to an expensive private prep school that produced numerous Cabinet-level politicians. He then attended the famous Eton college — a production line for British leaders including Boris Johnson and David Cameron.
Labour leader Sir Keir Starmer has said Kwasi Kwarteng’s sacking does not “undo the damage” already inflicted by Liz Truss’s government through the mini-budget.
“Changing the chancellor doesn’t undo the damage made in Downing Street,” he posted on Twitter.
Changing the Chancellor doesn’t undo the damage made in Downing Street.
Liz Truss’ reckless approach has crashed the economy, causing mortgages to skyrocket, and has undermined Britain’s standing on the world stage. 1/2
Liz Trusssays she “acted decisively” as her first consideration is what is in the national interest.
Asked why she should stay as prime minister now her economic plan has been dismantled, the PM says: “I am determined to see through what I’ve promised – deliver higher growth, a more prosperous the United Kingdom.”
Ms Truss says her priority is “delivering the economic stability this country needs”.
She repeats: “I have to act in the national interest as prime minister.”
Liz Truss is due to give a press conference in the Downing Street briefing room in just under half an hour’s time.
Our political correspondent Tamara Cohen is outside Number 10 and has captured this picture of quite lively scenes outside of the gates.
It looks like some colourful flares have been set off near the entrance to Downing Street where security and members of the Metropolitan Police are gathered.
Jeremy Hunt has been made chancellor, Downing Street has confirmed.
This comes barely an hour after Kwasi Kwarteng was relieved of his duties by Prime Minister Liz Truss.
During the leadership contest over the summer, Hunt put himself forward to be the next Tory leader but after not gaining enough support from fellow MPs he supported Rishi Sunak’s bid.
Ed Argar will take over chief secretary to the treasury – the second in command over the country’s finances.
Argar will be moving from his role at the Cabinet Office as paymaster general, swapping roles with his predecessor Chris Philp, who becomes the new paymaster general.
After sacking Kwasi Kwarteng as chancellor after just 38 days in the job, Liz Truss now has to appoint his successor.
But who could she choose?
No announcement has been made yet, but here are a few names emerging as possible front-runners:
Jeremy Hunt
The former health secretary could make a return to the front benches for the first time since July 2019.
Mr Hunt was foreign secretary for a year under Theresa May’s leadership and before this, also held the health secretary and culture secretary briefs under David Cameron.
Mr Hunt was also one of Rishi Sunak‘s most prominent backers in the leadership contest against Ms Truss.
If appointed as chancellor, this could be seen as an attempt by Ms Truss to try and win over the critics within her own party and steady the Conservative ship.
Sajid Javid
The former chancellor has been publicly criticising the government this week – adding his voice to growing calls that benefits must be raised in line with inflation.
Could this be an advantage? Maybe the markets will trust someone who went toe-to-toe with Ms Truss in recent days.
Therese Coffey
She is currently the deputy prime minister and the health secretary – another close ally of Ms Truss.
Ms Coffey last month defended the PM from criticism that she has appointed a “cabinet of chums”.
Simon Clarke
The new levelling up secretary is a close ally of Ms Truss, and was present at the meetings to put together the much-maligned mini-budget.
He has reportedly written to the PM with a set of proposals intended to boost house-building and economic growth.
Nadhim Zahawi
The current Chancellor of the Duchy of Lancaster has sought to quell disquiet in Tory ranks, warning: “Delay is our biggest enemy.”
He has said colleagues must “focus” on delivering for the country, as any “dither” will “end in defeat” for the party.
Mr Zahawi was promoted to chancellor by Boris Johnson on 5 July 2022 following the resignation of Rishi Sunak earlier that day in the dying days of Ms Truss’s predecessor’s government.
The following day, he and other members of Mr Johnson’s cabinet gathered in Number 10 calling on the PM to resign.
Mr Kwarteng replaced him as chancellor in Ms Truss’s cabinet.
PM press conference to be held at 2.30pm
The prime minister’s press conference will be held at 2.30pm in the Downing Street briefing room, Number 10 has said.
‘Changing the chancellor doesn’t undo the damage that’s been done’ – Reeves
Labour MP Rachel Reeves has spoken out since the news that Kwasi Kwarteng has been sacked by Liz Truss as chancellor.
Ms Reeves says that the country doesn’t just need a change in chancellor, “we need a change in government”.
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Javid and Zahawi among names mentioned inside Number 10 as PM looks to replace chancellor
Sky’s political editor Beth Rigby has said she expects the PM to announce her new chancellor at this afternoon’s press conference.
Rigby says the names Sajid Javid and Nadhim Zahawi have both been discussed inside Number 10 today.
“There are other names that could come up. Simon Clarke, the Level Up Secretary, though he is also very much signed up to the growth of gender equality.
“There are other names that are swimming around such as Jeremy Hunt.”
Rigby adds that some Tory MPs would certainly be ready to accept a more broadly based cabinet, bringing in people from different wings of the party rather than the tight coterie around Liz Truss.
“They would like to see this,” she says. “Just talking to more and consulting with them more. And it’s possible that she would she would gain the support enough of her of her party to survive for a while if she changes completely and takes that sort of line.”
Kwarteng ousted from Number 11 less than 24 hours after saying he was ‘not going anywhere’
Kwasi Kwarteng has left Number 11 Downing Street after being sacked by Liz Truss.
The former chancellor left the building via the front door and smiled at the cameras as he entered a government vehicle.
Just yesterday afternoon Mr Kwarteng told reporters in Washington DC he was “not going anywhere.”
Here’s the clip:
Kwarteng confirms sacking in letter to prime minister
Kwasi Kwarteng has confirmed he has today been sacked as chancellor after just 38 days in the role.
Publishing a letter he has written to Prime Minister Liz Truss on Twitter, Mr Kwarteng said it had been “an honour” to serve as her first chancellor.
Describing the “incredibly difficult” situation Ms Truss’s government inherited, Mr Kwarteng’s letter adds: “However, your vision of optimism, growth and change was right.
“As I have said many times in the past weeks, following the status quo was simply not an option.
“For too long this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.”
Despite growing calls for further U-turns over the government’s controversial mini-budget, Mr Kwarteng describes his Medium-Term Fiscal Plan – due to be unveiled on 31 October – as “crucial”.
He says he believes the PM’s “vision is the right one”, adding that he looks forward “to supporting you and my successor” from the back benches.
Mr Kwarteng’s letter concludes: “Your success is this country’s success and I wish you well.”
Kwasi Kwarteng’s rise and fall, from Eton scholar to chancellor
Kwasi Kwarteng’s stint as chancellor was perhaps as short as his rise to the top of politics was swift.
Mr Kwarteng was promoted to chancellor by Liz Truss on 6 September from his previous post as business secretary under Boris Johnson.
Within 38 days he had been sacked, his downfall set in motion by the economic turmoil unleashed by his mini-budget.
He insisted his tax-cutting mini-budget was the best way to encourage growth, saying the turmoil in the UK economy was part of global pressures caused by the Ukraine war and the pandemic recovery.
But after open revolt among Tory MPs and a surge in the polls for Labour forced U-turns on two of his major policies, the prime minister decided it was time for him to go.
Mr Kwarteng is not used to failure, rising up the political ranks fairly quickly after becoming an MP in 2010 – although that did take a few attempts.
In the eyes of many MPs, Truss is as much to blame as Kwarteng
Although there’s still no official confirmation, it now appears that Kwasi Kwarteng has been sacked as chancellor.
We await to hear Liz Truss’s reasoning for this, but it looks like part of an economic reset in government and a signal to MP and markets that a new approach is being adopted.
So will it work?
Remember, Liz Truss promised most of these tax cuts during her leadership campaign.
In the eyes of many MPs, she is as much to blame as the chancellor.
One former cabinet minister told Sky News the prime minister would eventually have to leave office as well.
“She is as guilty as Kwasi Kwarteng and I don’t think it is good enough that she throws him under the bus and can then expect to proceed as if the problem is sorted”, said the senior Tory.
Lib Dems call for general election after chancellor sacked
Liberal Democrat leader Sir Ed Davey has called for a general election in response to Kwasi Kwarteng being sacked as chancellor.
Sir Ed has accused Liz Truss of having “broken our economy” and said it is “time for the people to have their say”.
“This mustn’t just be the end of Kwarteng’s disastrous chancellorship, it should be the death knell of the Conservatives’ reckless mismanagement of our economy,” he said in a statement.
“It didn’t suddenly start with Kwarteng, but it must end now.
“People are angry, fed up and worried about the future.
“Most of all they are furious that Conservative MPs seem to think this is an acceptable way to conduct the government of our country in these difficult times.
“Enough is enough.
“It started with Boris Johnson failing our country, and now Liz Truss has broken our economy, it is time for the people to have their say in a general election.”
Kwasi Kwarteng sacked as chancellor by Liz Truss, Sky News understands
Kwasi Kwarteng has been sacked as chancellor after just over a month in the role, Sky News understands.
Two sources informed our deputy political editor Sam Coates of the update – though it has not been officially confirmed.
Mr Kwarteng was appointed on 6 September after Liz Truss took office as prime minister and has served just 38 days in the role.
Yesterday, Mr Kwarteng had told reporters in Washington DC that he was “not going anywhere” despite growing calls for him to resign over his controversial tax-cutting mini-budget which saw the pound slump to a record low.
It means he is the second shortest-serving UK chancellor on record.
Conservative Iain Macleod is the shortest-serving chancellor after dying of a heart attack 30 days after taking the job in 1970.
The country has had four chancellors in the last three years since 2019 – Mr Kwarteng, Nadhim Zahawi, Rishi Sunak and Sajid Javid.
The next chancellor will be the seventh Conservative chancellor in 12 years.
‘It’s a matter of survival for her now’ – would ousting her chancellor be enough to save Truss?
Discussion is happening at all levels in the Conservative party about whether the prime minister can survive – even if she replaces her chancellor.
As one senior minister in her government put it to me this morning before reports that Kwarteng would be sacked: “I honestly don’t think either of them, Liz or Kwasi have a clue, I don’t think they know what they’re doing.”
“They’ve got one shot to satisfy the markets,” the minister said – with a full U-turn on the corporation tax freeze and perhaps more: “The worst possible thing, now the markets have priced in a U-turn on corporation tax would be mealy mouthed partial U-turn.”
“But my instinct is she won’t survive. She’s introduced herself to the country in the worst way imaginable, and people’s views of her are quite settled now.
“Even if she stays, you can’t have a chancellor who has lost the confidence of the markets, that’s never happened before that I can remember”. The minister said the prime minister might need a complete reboot of the Treasury team to restore confidence, but having jettisoned key parts of her economic programme, “she is a husk.”
This minister and others point out that her controversial supply-side reforms are likely to be opposed in parliament – as are spending cuts on the scale that may be needed to pay for her measures.
Other MPs also say she will need a humiliating change of direction to survive. One long-serving MP said: “It’s unfair for Kwasi to go in the sense that it was all her idea, but politics isn’t fair. It’s a matter of survival for her now, there are discussions going on but it’s not organised yet.”
Former cabinet minister says Truss ‘has to go’
A former Conservative cabinet minister has told Sky News that Prime Minister Liz Truss “has to go” as there is “nothing she can do to retrieve her position”.
Discussing the potential corporation tax U-turn, they said: “It was the centrepiece of her campaign, the bit that distinguished her from Rishi.
“She is as guilty as Kwasi Kwarteng and I don’t think it is good enough that she throws him under the bus and can then expect to proceed as if the problem is sorted.
“Crucially, she has damaged the Tory brand when we could say the economy was safe in our hands. We can’t now.
“She has to go. There is nothing she can do to retrieve her position.”
PM doing news conference alone doesn’t bode well for Kwasi Kwarteng
Back from Washington and now inside Downing Street, it may not be long before we learn what Kwasi Kwarteng’s fate will be.
One possible indication of where we’re going may be lurking in who is due to attend the press conference this afternoon.
Given we expect a major announcement on the government’s plan for the economy, you would expect the chancellor to be involved – not least to reassure the markets that Liz Truss still had faith in her man in the Treasury.
But asked directly if the chancellor would be at this afternoon’s press conference, a Downing Street source replied simply saying “PM presser”.
That suggests the prime minister will be doing this alone, and it doesn’t bode well for Kwasi Kwarteng.
Cabinet ministers have ‘no idea what’s going on’
Our political editor Beth Rigby has been speaking to cabinet ministers this morning amid reports that Liz Truss could be set to dismantle parts of her controversial mini-budget later today.
The senior ministers she has spoken to have said they “have no idea what’s going on – either about the chancellor’s position or the possible decision to raise corporation tax from 19% to 25% in April after all”.
Chancellor arrives back in Downing Street ahead of expected U-turn
Chancellor Kwasi Kwarteng has arrived in Downing Street after returning from the US amid expectations he will scrap parts of his mini-budget to reassure markets.
If Truss is to reset her administration and junk tax cuts – should she do it with someone like Sajid Javid?
As they often do at times like this, rumours are swirling about who could replace Kwasi Kwarteng if he is to leave his post as chancellor.
One name frequently linked to vacant cabinet posts is Sajid Javid, and today is no different.
But if the former chancellor is to re-enter the Treasury, it’s worth remembering his recent history of pledging his own unfunded tax cuts.
During his relatively brief campaign to become prime minister in the summer, Mr Javid pledged tax cuts broader in scope than the ones Liz Truss was promising at the time.
In his pitch for the top job, there were plans to shelve the corporation tax rise that is about to be U-turned on; as well as to scrap the national insurance rise; and bring forward the cut to the basic rate of income tax.
If Liz Truss is to reset her administration and junk tax cuts in a bid to reassure the markets, can she do it with someone like Sajid Javid who is so closely linked to a similar prospectus for government?
A humiliating U-turn is necessary, but the real damage is done – Reeves
Labour’s shadow chancellor Rachel Reeves is the latest MP to comment on speculation of a major U-turn on Chancellor Kwasi Kwarteng’s mini-budget.
She said: “A humiliating U-turn is necessary – but the real damage has already been done to millions of ordinary people now paying much higher mortgages and struggling to make ends meet.
“This is a Tory crisis made in Downing Street. They have plunged our economy into chaos and crisis with Truss’s discredited trickle down approach. It won’t be forgiven or forgotten.
“Only a Labour government has the credibility, authority and plan to fix things.”
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Who could be the next chancellor if Kwarteng is sacked?
Sky’s deputy political editor Sam Coates is weighing in on this question.
He says it is uncertain whether Kwasi Kwarteng will retain his job as chancellor.
“Could it be Simon Clarke?” Coates asks.
Mr Clarke is currently serving as Secretary of State for Levelling Up. He served as Chief Secretary to the Treasury from 2021 to 2022.
“Well, he’s an ideological bedfellow of Liz Truss. He was in the meetings to put together the mini-budget.
“But will the markets trust him if they think that he also shares the trust of economic values that have taken this to this point?”
He adds: “Could it be Theresa Coffey? She’s currently the deputy prime minister and the health secretary’s very close ally.
“She’s been in some, but not all of the economic meetings.”
Government is set to U-turn on keeping corporation tax low, Sky News understands
The government is set to raise corporation tax despite promising not to do so in the mini-budget, Sky News understands.
The prime minister had vowed to scrap the planned tax rise from 19% to 25% next April, a key policy of her pro-business growth plan, during the Conservative leadership campaign.
The change in direction is the second major tax cut U-turn after the government confirmed it would not go ahead with a plan to scrap the 45p top rate of tax.
Kwarteng being sacked is ‘inevitable’, Sky News told
Sky’s political and business correspondent Mhari Aurora reports that a former cabinet minister has told her that Kwasi Kwarteng being sacked is “inevitable”.
According to the Reuters news agency, a government spokesperson has refused to comment on speculation that Mr Kwarteng has been sacked.
It follows a report by the Times newspaper in the last half an hour which has suggested the chancellor has already been dismissed.
We will of course bring you more on this as we get it.
Users on social media are reacting to the dismissal of Kwasi Kwartengas the UK Chancellor.
He was relieved of his duties today, Friday, October 14, 2022, by Prime Minister Liz Truss.
Mr Kwarteng served for 39 days after being appointed on Tuesday, September 6, 2022.
There are diverse opinions from social media users on the matter. Some section of the public believe his sacking was inevitable as the Pound as plummeted by over one percent against the US dollars.
I wonder who the media, the markets and the IMF are going to pick to replace Kwasi Kwarteng? Hopefully it’ll be Gary Lineker so we can have two black chancellors in a row.
Kwasi Kwarteng has been removed from his position as Chancellor. The markets have rallied. The pound fallen and the future looks uncertain. Who is next to be fired. Bigger question is who is up to the job of turning around the UK’s economy and cancelling the mini budget?
So Kwasi Kwarteng has been sacked for being shit at his https://t.co/CAB4FOnMLU comes as no surprise,he shouldn’t have been in it in the first place.Worst about it , he’ll go into another job and still get a six figure sum that he dosent deserve.
Kwasi Kwarteng of Ghanaian descent has been relieved of his duties as the Finance Minister of the United Kingdom.
He was appointed on Tuesday, September 6, 2022 by newly sworn-in Prime Minister Liz Truss.
Mr Kwarteng was the first black person to assume such a position in the United Kingdom.
His dismissal comes amid speculation that Prime Minister Truss will today, October 14, announce a U-turn on parts of the mini-budget.
Mr Kwasi Kwarteng, serving for 39 days, becomes the second shortest-serving UK chancellor on record.
The shortest serving chancellor, Iain Macleod, died of a heart attack 30 days after taking the job in 1970.
Since 2019, the UK has had four chancellors, including Nadhim Zahawi who served the third shortest tenure with 63 days during a short-lived reshuffle under Boris Johnson, and Sajid Javid who served 204 days – the fourth shortest tenure on record.
Kwasi Kwarteng reacts
In a letter to the Prime Minister, Kwarteng said he took on the job “in full knowledge that the situation we faced was incredibly difficult”.
He wished Prime Minister Liz Truss well with her plans for the economy, noting that “we’ve been colleagues and friends for many years”.
He also promised to support Truss from the backbenches.
Ghana’s Finance Minister, Ken Ofori-Atta, is in the United States of America, USA, attending the Group of Seven (G7) meeting with Finance Ministers from some African countries which is part of the IMF and World Bank Annual meetings.
Ofori-Atta described the meeting as “quite historic because for the first time, the G7 has called African Finance Ministers to deliberate on the crisis that they see.
“…these are exogenous factors that have really (impacted), even their own economies (and) put it under serious stress and are, therefore, looking for ways in which they can add to the capital needs to make sure that things do not deteriorate. So countries such as Ghana, Senegal, Tunisia, and Morocco were there,” he said as quoted by 3news.
This is not the only historic moment of the ongoing meeting in Washington DC as Ken Ofori-Atta also met for the first time, Kwasi Kwarteng, the British-born Ghanaian who is the current the Chancellor of the Exchequer, that is the UK’s Finance Minister.
In some of the photos circulating on social media, Ofori-Atta is seen sitting next to Kwarteng and having a tête-à-tête.
Kwasi Kwarteng’s appointment made him the first Black to ascend to such a position regarded as only second to the Prime Minister’s office in UK political circles.
Before his new role as the Chancellor of the Exchequer, the Conservative MP for Spelthorne was the Business secretary under Boris Johnson’s government.
As the Chancellor of the Exchequer, the British of Ghanaian descent is responsible for raising revenue through taxation or borrowing and for controlling public spending. He has overall responsibility for the work of the treasury.
The G7 is made of an informal grouping of seven of the world’s advanced economies; namely: Canada, France, Germany, Italy, Japan, United Kingdom, United States of America and European Union.
This group invited finance ministers from South Africa, Senegal, Togo, Zambia, Ghana, Guinea, Rwanda, Chad, Tunisia and Morocco for the all-important meeting.
The meeting with the African Financial Ministers brings together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.
The pound has gained as speculation about a possible U-turn on the mini-budgethas increased.
On Friday morning, sterling was trading above $1.13 versus the dollar as the chancellor returned home early from the United States for urgent discussions in Downing Street.
In September, the currency touched a record low of $1.03 as markets responded negatively to Kwasi Kwarteng’s mini-budget.
In it he promised billions of pounds of tax cuts but did not explain how he would fund them.
Government borrowing costs have also fallen, after surging to worrying levels in the days after the mini-budget.
The Bank of Englandhas been buying government bonds – known as gilts – to try to stabilise their price and prevent a sell-off that could put some pension funds at risk of collapse.
However, that support is due to come to an end on Friday.
There has been speculation it may be extended, although this was dismissed by the Bank’s governor, Andrew Bailey, earlier this week.
The government has already U-turned on its plan to scrap the top rate of income tax, but many Conservative MPs think a further change of plan is imminent.
Russ Mould, investment director at AJ Bell, said the financial markets were already pricing in a government U-turn.
“They started to [price it in] yesterday,” he told the BBC’s Today programme.
Mr Mould pointed to the fact that the yields – or the effective interest rate – on UK government bonds have been falling back in anticipation of a reversal to the tax-cutting plans. On Friday morning, the yield on bonds that borrow money over 30 years fell to 4.47%.
“Gilt yields came down… and sterling rose against the dollar to $1.13 and against the euro to €1.16, so I think they are starting to either expect, demand, sniff out that there will be some degree of U-turn possibly on corporation tax, dividend tax, other areas,” Mr Mould said.
Asked what would happen if there is no U-turn, Mr Mould said: “You would expect the gains that we’ve started to see, to unwind.”
Bank of England support
The government raises the money it needs for spending by selling bonds – a form of debt that is paid back plus interest in anywhere between five and 30 years.
Pension funds invest in bonds because they provide a low but usually reliable return over a long period of time.
However, the sharp fall in their value after the mini-budget forced pension funds to sell bonds, threatening to create a “downward spiral” in their prices as more were offloaded, which left some funds close to collapse.
This sparked an emergency intervention by the Bank of England,which stepped in to buy bonds and prevent their price falling further.
There has been strong speculation that the Bank will extend the scheme, which is due to end on Friday.
But on Tuesday, Mr Bailey dashed those hopes, telling pension funds: “You’ve got three days left now and you’ve got to sort it out.”
Bethany Payne, global bonds fund manager at Janus Henderson, told the BBC it was not clear whether pension funds have done enough to strengthen their finances.
“The risk is that we don’t know how pension funds have used this window of time and whether they have used it effectively by raising cash and doing everything they need to,” she said.
“So the true test of the market will be this afternoon and Monday morning to see whether they have done enough.”
At a time when the UK’s international financial credibility is on the line, the chancellor concluded it was a better option to bail out early of a gathering of finance ministers, at the world’s financial institutions in Washington, than stay put.
Why? Because 3,600 miles away, the prime minister was in discussions with Conservative MPs and others – their entire joint programme for government hovering above the shredder.
I’m told Liz Truss and Kwasi Kwarteng were in touch yesterday and it was his decision to make a dash for it to come home early.
He does so knowing that the centerpiece of his few short days as chancellor sits on the rim of the bin, as does his reputation and his career.
Tory MPs at every level of the party are suggesting he could be out of his job soon too.
But earlier, a Downing Street source told me that “the chancellor is doing an excellent job and they [the PM and chancellor] are in lockstep”.
So does Truss want him to continue in the job in the coming months? “Yes”, is the answer.
It is going to be a very interesting day in Westminster. It would not be a surprise if an almighty U-turn happens and happens today.
Ghana’s finance minister, Ken Ofori-Atta, is in the USA for the annual IMF and World Bank meetings and the Group of Seven (G7) meeting with finance ministers from other African nations.
The conference, according to Ofori-Atta, was “very historic because the G7 convened African Finance Ministers for the first time to discuss the situation that they see.”
“…these are exogenous factors that have really (impacted), even their own economies (and) put it under serious stress and are, therefore, looking for ways in which they can add to the capital needs to make sure that things do not deteriorate. So countries such as Ghana, Senegal, Tunisia, and Morocco were there,” he said as quoted by 3news.
This is not the only historic moment of the ongoing meeting in Washington DC as Ken Ofori-Atta also met for the first time, Kwasi Kwarteng, the British-born Ghanaian who is the current the Chancellor of the Exchequer, that is the UK’s Finance Minister.
In some of the photos circulating on social media, Ofori-Atta is seen sitting next to Kwarteng and having a tête-à-tête.
Kwasi Kwarteng’s appointment made him the first Black to ascend to such a position regarded as only second to the Prime Minister’s office in UK political circles.
As the Chancellor of the Exchequer, the British of Ghanaian descent is responsible for raising revenue through taxation or borrowing and for controlling public spending. He has overall responsibility for the work of the treasury.
The G7 is made of an informal grouping of seven of the world’s advanced economies; namely: Canada, France, Germany, Italy, Japan, United Kingdom, United States of America and European Union.
This group invited finance ministers from South Africa, Senegal, Togo, Zambia, Ghana, Guinea, Rwanda, Chad, Tunisia and Morocco for the all-important meeting.
The meeting with the African Financial Ministers brings together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.
The Ministry of Education, MoE, has refuted claims that schools in parts of the country are suffering from food shortages.
An October 11, 2022 press release signed by Kwasi Kwarteng, the Ministry’s spokesperson said there had been adequate food supplies to schools including the St. Paul SHS and Minor Seminary in the Volta Region.
GhanaWeb had carried a report of a viral video shared by blogger Kobby Kyei, in which a group of 10 students of St Paul’s are seen purportedly sharing one fish during dining.
The video, having gone viral, particularly on Twitter, triggered condemnation of the feeding situation in schools.
In the said video, a student with a spoon is seen carefully dividing the fish in what looks like palm nut soup into several pieces to share with other students seated around the table who had been served rice.
But the MoE statement titled: ‘MINISTRY OF EDUCATION REFUTES ALLEGATIONS OF FOOD SHORTAGE IN SENIOR HIGH SCHOOLS,’ read in part: “The Ministry of Education has noted with surprise news publications and media discussions which purport an imminent closure of some Senior High Schools due to shortage of food. Specific references were made to some schools in the Volta Region.
It continued: “The Ministry wishes to place on record that our checks reveal adequate supplies of food items have been made to the schools in question. The Ministry however takes cognizance of recent disruptions within the food supply chain but assures parents and guardians that they have been addressed. Consequently, all Senior High Schools in the Country have received an adequate supply of food items.
“The Ministry wishes to assure the public of its commitment and willingness in providing quality and timely supply of food to all Senior High Schools. We entreat the Public to disregard such reports,” it concluded.
In May this year, some Senior High Schools reported food shortages while threatening to close down if nothing was done about the situation.
The Regional Conference of Heads of Assisted Secondary Schools (CHASS) in the Northern, Eastern, Central and Volta regions were worst affected by the crisis and demanded that either student are made to feed themselves, or the schools shut down.
However, the government intervened and had supplies delivered to the various schools to avert their closure.
The headmistress of Avatime Senior High School, Rebecca Mawusi Veny, wrote to the Volta Regional Director of Education to request permission for the students to begin feeding themselves as the school was running out of stock.
Similarly, the headmaster of Alavanyo Senior High Technical, Rev Samuel Pius Elewokor, wrote to the Volta Regional Free SHS Secretariat for urgent supply as they have resorted to feeding their students twice daily.
In its latest economic update, Deutsche Bank said: “Since our last growth update, the UK economic outlook has weakened further.
“We now see the UK in a recessionary orbit with growth likely to remain subdued for much of the next year or so, with GDP slowing from 4.5% this year (previously: 3.5%) to -0.5% next year (previously: 0%), and rising by 1% in 2024 (previously: 1%).
“We now expect GDP to return to its pre-pandemic level only in 2024, with growth recovering to its trend rate (1.25%) around the middle of the decade.”
During what may yet turn out to have beenonly the first Conservative leadership contest of 2022, Liz Truss was extremely careful to position herself as the continuity candidate to Boris Johnson. That display of apparent loyalty was to prove pivotal with many party members when they selected her over the Johnson assassin, Rishi Sunak. Yet as Truss’s first month as prime minister has now shown, she is not the continuity Johnson candidate at all. Instead, she glories in being a radical disrupter.
This was evident from day one when Truss appointed a cabinet overwhelmingly from the Tory right while banishing prominent ministers of the Johnson era. It became explosively obvious two weeks later, when Kwasi Kwarteng slashed taxes on the rich, setting off the chain of events that has transformed British party politics and left the Tory party’s ratings in tatters. On Wednesday, it was starkly confirmed in Truss’s party conference speech in Birmingham – a defiant address that contained no mention of Johnson whatever, let alone any endorsement of his policies.
On the day of her leadership victory a month ago, Truss said she had campaigned as a Conservative and would now govern as a Conservative. It’s the kind of platitude that new leaders often spout. But the Tory party that heard those words must have thought it implied some degree of continuity with the recent past.
It did not. In Truss’s mouth, the words implied what she had always intended them to mean: a decisive shift to the Thatcher/Reagan economic right of the kind that has long been the dream of the party’s free-market thinktanks but is fundamentally at odds with Johnson’s messy, big-government pragmatism.
Truss’s speech was an unapologetic confirmation that this is what we are now witnessing. She sees hers as a different and very particular form of Conservatism. She is not interested – as Johnson was, albeit in his own, slapdash way – in making compromises with any other forms. Hers is a Year Zero approach.
At three separate points in the speech, she used the phrase “new approach”. All three usages felt very deliberate and significant. They signalled that this is a prime minister who, now that she has got hold of the steering wheel, will not look in the rear-view mirror, and will drive until she is stopped.
In one of these references, directed explicitly at trying to reassure the financial markets, Truss spoke of “taking a new approach based on what has worked before”. It is important to deconstruct that remark. What had “worked before”, in this reading, was not anything that Johnson had been doing. The reference was to Margaret Thatcher’s taming of the trade unions, her privatisations of nationalised industries, and her deregulation of the City in the 1980s.
In other words, this was a not-so-coded warning that, whatever the financial turmoil of the past two weeks, Truss is unbowed. She still sees market deregulation and low taxes as the absolute core of the strategy, whatever happened after the mini-budget.
All Conservative leaders talk about deregulation and low taxes. The words have been guaranteed applause lines in any Tory politician’s conference speech over the past four decades. They may seem little more than pieties. But Truss’s use of them is different. She is more ideological and visceral, not just compared with Johnson but also with Theresa May, David Cameron, or John Major. Truss’s real commitment is to a Thatcher of her imagining (in reality, Thatcher was more subtle). It has an almost theological quality, and it was reflected in a speech that made no concessions to her critics.
She is also, at least in her own self-image, up for the fight. In spite of the U-turns in the past days, on the top rate income tax band and the Office for Budget Responsibility, Truss had no word of apology or empathy this time. It is clear she will cut benefits in real terms if she can. When she mentioned leveling up, which she also did on three separate occasions, it was to promise to level up Britain “in a Conservative way”. By this, she did not mean the government investment that Johnson was always implying (though not delivering). When Truss says “in a Conservative way”, she means her way – cutting taxes and regulations – and that she at least is prepared to weather the disruption and opposition.
Yet if Truss is prepared to fight for this approach, the same can hardly be said for many in her party. The Tory party feels exhausted and feels as if it is increasingly going through the motions of being a governing party. No one attending the Birmingham conference could have missed the unease.
It manifested itself in myriad different ways, from the criticisms made by a newly energized Michael Gove, through the readiness of ministers such as Penny Mordaunt to stand up for inflation-proof benefits, to the gallows humour in fringe meetings. When the Ipsos pollster Gideon Skinner told one fringe gathering that current polls would show a general election loss of 181 Tory MPs, the man sitting next to me whispered: “Actually, that feels quite reassuring right now.”
Birmingham settled nothing. The conference was the Tory party’s “What on earth have we done?” moment. As a result, Truss found herself fighting for her political life. There genuinely was talk about whether to act quickly and find a new leader (or bring back Johnson). Truss’s speech will get her through the coming weekend. But it was a dishonest speech, more important for its omissions and its concealments than for anything that spoke, let alone with empathy, to a party that is beginning to feel its luck has run out.
The U-turns this week have in fact disabled the prime minister’s attempt to drive her agenda forward. They will hardly be the last. The return to Westminster will move the spotlight on to the parliamentary party once again. The Gove-Sunak wing of the party now possesses an effective veto over what the Truss-Kwarteng wing gets to do. This will shape the dark machinations (which have already begun) of the coming days and weeks.
The truth is that the post-Brexit electoral coalition assembled by Johnson in2019 was always so volatile and idiosyncratic that anyone else would have struggled to be the continuity leader once he stepped down. Yet Truss is proving something else besides. The fracturing and narrowing of the Tory party over the past decade are now so great that it has resulted in the party being simultaneously ungovernable and unable to govern. It is possible that Truss herself may soon be toppled. Yet no one else would do much better. It is time for the Conservatives to go into opposition. Only then can they try to decide what governing as a Conservative now means.
DISCLAIMER: Independentghana.com will not be liable for any inaccuracies contained in this article. The views expressed in the article are solely those of the author’s and do not reflect those of The Independent Ghana
The 45p tax rate was introduced in Chancellor Kwasi Kwarteng’s tax-cutting mini-budget last month and overturned last week. On Tuesday, Home Secretary Suella Braverman accused Tory MPs of launching a “coup” against the PM.
Foreign Secretary James Cleverly has urged his ministerial colleagues to keep their views on government policy “around the cabinet table” as Liz Truss faces an open split within her top team over the 45p tax rate U-turn.
The senior cabinet member warned his peers that it is “always better to feed straight into the boss” if there are any issues regarding “policy or the relationship with other ministers”.
On Tuesday, Home Secretary Suella Braverman accused Tory MPs of staging a “coup” against the PM over the 45p tax rate – a policy which was unveiled in Chancellor Kwasi Kwarteng’s tax-cutting mini-budget last month and reversed last week.
“She chose the words that she chose,” the foreign secretary told Sky News, responding to Ms Braverman’s comments.
“But when you’re in government, you have the opportunity to feed your ideas straight to the top machine. It’s always best done around the cabinet table or in the cabinet committee meetings.
“My view is anything to do with policy or the relationship with other ministers – always better to feed straight into the boss”.
The Levelling Up, Housing and Communities secretary posted on social media: “Suella speaks a lot of good sense, as usual.”
The tax cut for the wealthiest 1% was one of a raft announced by Mr Kwarteng in his mini-budget less than two weeks ago that led to market turmoil – with the pound plummeting, the Bank of England having to step in to rescue pension funds, and mortgage products being withdrawn.
Despite standing by the policy in the opening days of the conference, Mr Kwarteng confirmed on Monday it would no longer go ahead, saying the measure had become a “distraction” from his objective to grow the economy.
Yesterday, Ms Truss told Sky News’ political editor, Beth Rigby, she had “absolutely no shame” in performing the dramatic U-turn.
Mr Cleverly told Kay Burley that “a lot of discussions weren’t able to be had” over the chancellor’s mini-budget proposals because of the death of the Queen.
The foreign secretary also disputed that a U-turn took place, adding: “What you’re describing as a U-turn is the smallest element of a really big and significant support package to families, a tax cut to families, the stimulus package for the British economy.”
Ms Truss is also facing the threat of another major split within her top team over the level of benefits.
On Tuesday, Leader of the House of Commons Penny Mordaunt joined backbench rebels in calling for welfare payments to be raised in line with inflation, which has been at around 10%, rather than earnings at 5%.
Two additional cabinet ministers have also told Sky News that they believe benefits should be uprated in line with inflation.
Sky News understands that Chairman of the 1922 Committee of backbench Conservative MPs Sir Graham Brady has warned Ms Truss any attempt to uprate benefits by average earnings rather than by inflation is unlikely to get through Parliament.
At around 11 am, Ms Truss is due to deliver her keynote speech at the Conservative Party’s conference in Birmingham as she battles to save her premiership just one month into the job.
The PM will wrap up the event by defending her approach and pledging a “new Britain for the new era” after a week of U-turns and infighting.
PM: I am ‘not ashamed’ for listening
The prime minister will tell her audience: “Whenever there is change, there is disruption. Not everyone will be in favour.
“We need to grow the pie so that everyone gets a bigger slice.”
She is expected to say: “I am determined to take a new approach and break us out of this high-tax, low-growth cycle.”
Ms Truss will also put her government forward as having an “iron grip” on the UK’s finances that will help everyone.
The hall in Birmingham is not expected to be full as many MPs said they were leaving on Tuesday evening ahead of train strikes on Wednesday.
Samuel Okudzeto Ablakwa, a member of parliament for North Tongu, has noted a notable difference between Kwasi Kwarteng, a finance minister of Ghanaian heritage serving in the UK government, and Ken Ofori-Atta, the finance minister of Ghana.
He claimed that the former is “stiff-necked” and unyielding in his decisions, whilst the latter is more humble to acknowledge his mistakes and make adjustments.
Ablakwa’s comment comes on the back of a U-turn made by the UK’s Chancellor of the Exchequer (Finance Minister), Kwasi Kwarteng, on plans to cut the 45p rate of income tax – a move which saw a revolt by Tory MPs – hours before his speech to the Conservative party conference, BBC reported
The cut according to UK’s Evening Standard would have seen abolishing the tax rate for people earning more than £150,000 in the middle of a cost-of-living crisis.
In a Facebook post on October 3, Ablakwa said Ofori-Atta has remained headstrong despite the fact that the economy under his stead has seen downgrades from rating agencies.
He wrote: “it seems to me of the two under fire Ghanaian Finance Ministers, Kwasi Kwarteng has the humility to listen and concede quickly that he got it wrong while his counterpart, Ken Ofori-Atta remains stiff-necked, intransigent and adamant as he attracts more calamitous downgrades”.
Ghana’s economy has fared badly in the last couple of months with economists pointing to record high inflation rates, fuel price hikes, and the Cedi depreciation as the basis for their claim.
Government has consistently blamed the situation on the ravages of Covid-19 and the ongoing Russia-Ukraine war but has assured that it is implementing measures to mitigate the impact such as seeking an IMF programme in the interim.
This has been occasioned by downgrades from rating agencies such as Fitch and Standards and Poor. Recently, the International rating firm, Moody’s Investors Service also downgraded Ghana’s long-term issuer and senior unsecured debt ratings to Caa2 from Caa1 and placed the ratings on review for downgrade.
According to Moodys, the downgrade reflects the recent macroeconomic deterioration of Ghana’s economy which resulted in further heightening of the government’s liquidity, debt sustainability difficulties and posing an increased risk of debt default.
“Without external support, the government’s policy levers to arrest a worsening macroeconomic backdrop and heavier debt burden are extremely limited; the government’s small revenue base, large and increasingly absorbed by interest payments, further intensifies the policy dilemma between competing objectives, including servicing debt while meeting essential social needs,” Moody’s said on its official website on September 30, 2022.
It however explained that the initiation of the review for downgrade is prompted by the ongoing negotiations between the government of Ghana and the IMF over a funding programme that may include a condition for debt restructuring to ensure debt sustainability.
A British Member of Parliament (MP) from the Labour Party, Rupa Huq, publicly apologized to Ghanaian-born British MP, Kwasi Kwarteng, who also doubles as the UK’s Chancellor of the Exchequer (Finance Minister).
According to news.sky.com, the party suspended Rupa Huq for describing Kwasi Kwarteng as a “superficially” black man.
Huq almost immediately tweeted her apology on September 23. It read: “I have today contacted Kwasi Kwarteng to offer my sincere and heartfelt apologies for the comments I made at yesterday’s Labour conference fringe meeting.
“My comments were ill-judged and I wholeheartedly apologise to anyone affected,” her post read.
The controversial comment:
A report indicated that the suspended MP made the racist comments against the chancellor in an audio recording posted online by the Guido Fawkes website.
“Superficially he is a black man. He went to Eton, I think, he went to a very expensive prep school, all the way through, the top schools in the country.
“If you hear him on the Today programme, you wouldn’t know he is black,” Rupa Huq was quoted to have said by news.sky.com.
The Labour Party condemned the remarks.
Background on Kwesi Kwarteng:
Kwasi Kwarteng became the first black person to become UK’s Chancellor of the Exchequer (Finance Minister) following his appointment by UK Prime Minister, Liz Truss, on September 6, 2022.
Kwarteng was born Akwasi Addo Alfred Kwarteng in Waltham Forest, East London, in May 1975 to Ghanaian parents, Alfred and Charlotte, who had both immigrated to the United Kingdom a decade earlier as students.
His parents, who went on to become an international economist and a barrister respectively, sent him to an expensive private prep school that produced numerous Cabinet-level politicians.
He then attended the famous Eton college — a production line for British leaders including Boris Johnson and David Cameron.
Liz Truss, the prime minister, is rebuffing efforts to publish the independent fiscal watchdog’s analysis of her tax plans earlier than planned.
On November 23, when the chancellor is scheduled to present more economic initiatives, the Treasury has indicated that the OBR’s forecast will be made public.
This should happen sooner, according to several Conservative MPs, in order to reassure the financial markets.
The Treasury contends that you ought to hold off until more modifications are declared.
These “supply side” changes to stimulate growth are expected to include measures in eight areas – business regulation, agriculture, housing and planning, immigration, mobile and broadband, financial services, childcare, and energy.
Last week, Chancellor Kwasi Kwarteng set out some of the government’s tax and spending plans – including a surprise announcement that it would scrap the 45% highest tax band for high earners.
However, his mini-budget was not accompanied by a forecast from the OBR (Office for Budget Responsibility), something which helped to fuel market turmoil.
In the days following the announcement, the pound slumped against the dollar and the Bank of England was forced to spend £65bn to protect pension funds.
After a meeting between Ms Truss, Mr Kwarteng and the OBR on Friday morning, the government confirmed the rest of its economic plans would be published on 23 November, alongside an OBR forecast.
The Treasury will receive the OBR’s first draft on 7 October, but that won’t be made public.
Some of Ms Truss’s own MPs have raised concerns about the timetable.
Image source, PA MediaImage caption, Leading members of the Office of Budget Responsibility arriving at 10 Downing Street for a rare meeting with the prime minister
Waveney MP Peter Aldous said the timing of last Friday’s plan had been “hopelessly wrong”, and the rest of the details should be brought forward to October.
Sir Geoffrey Clifton-Brown said moving the date forward would give international markets and his constituents “reassurance”.
And speaking to BBC Radio 4’s World At One programme, Sir Charles Walker accused ministers of “naivety and hubris”.
He said they had done “very little explaining” of their tax announcements and the markets had been “spooked”.
Elsewhere Liberal Democrat leader Sir Ed Davey said the government, by waiting until 23 November, was allowing the UK economy to “fly blind” for two months.
“Families and businesses can’t afford to wait any longer for this government to fix their botched, unfair budget,” he said.
Former Conservative Chancellor George Osborne, who established the OBR, welcomed No 10’s decision to confirm that its next financial statement would be accompanied by an OBR assessment.
“In the space of one week we’ve gone from the OBR being dismissed to the PM turning up to its meetings… turns out the credibility of the institution we created 12 years ago to bring honesty to the public finances is more enduring than that of its critics.”
Speaking to BBC Breakfast, Treasury minister Andrew Griffith defended the government’s decision not to publish an OBR forecast when it announced its initial tax and spend plans last Friday.
He said the government had a number of measures planned to grow the economy that had yet to be fully set out in detail, arguing there was a “wholly wrong perception this is not a fiscally responsible government”.
The OBR confirmed on Thursday it had offered to provide a forecast for the mini-budget, but the chancellor had rejected that.
At the announcement of Kwasi Kwarteng as the Chancellor of the Exchequer of the United Kingdom (Minister of Finance), many celebrated him because true to their predictions, he was handed over the job.
For many others, including Ghanaians across the world, it was another feather in the cup of its people breaking barriers in other parts of the globe.
And while the job of the Chancellor of the Exchequer is not expected to be any easier on the British-born Ghanaian, many did not quite anticipate that so early into his reign, there would be some major, negative happenings.
Kwasi Kwarteng under fire for smiling during Queen’s funeral
On Monday, September 19, 2022, people from all walks of life attended the state funeral of Queen Elizabeth II at the Westminster Abbey in London.
Per GhanaWeb’s checks, four Ghanaians were formally invited to the event for different reasons. Ghana’s First Couple were in London for the event as were two other personalities with Ghanaian parentage who are British.
Nana Kofi Twumasi-Ankrah, a one-time equerry of the Queen was in attendance, escorting the cortege on its last journey from the Westminster Abbey to the Royal Vault. The fourth Ghanaian was Kwasi Kwarteng.
Kwarteng, who is British-born but of Ghanaian ancestry, and the current UK Chancellor of the Exchequer (Finance Minister), was also in attendance.
He, however, courted controversy on social media after he was captured in a viral video smiling at a point during the ceremony – specifically when a two-minute silence had been declared for the memory of the queen.
Angry social media users – especially on Twitter – called for his head for desecrating what was a solemn occasion for the nation.
Others also alleged that Kwarteng was smiling at himself because he was most likely picking a personal call and had been told something that gave him cause to smile at a rather off time.
Kwarteng, as a senior member of Prime Minister Liz Truss’ government, had a prominent seat at the venue of the service.
When Kwasi Kwarteng delivers his mini budget on Friday all opposition MP’s should coke up, wipe their brows, sway uncontrollably, and laugh like the laughing policeman. pic.twitter.com/mxPRaQ3aNG
British MP suspended for calling Kwasi Kwarteng ‘superficially’ black
In the most recent instance, a British Member of Parliament (MP) from the Labour Party, Rupa Huq, has been suspended by her party for alleged racist comments she made against British-born Ghanaian MP, Kwasi Kwarteng.
According to news.sky.com, the party suspended Rupa Huq for describing Kwasi Kwarteng as a “superficially” black man, pending investigations.
The report indicated that the suspended MP made racist comments against the chancellor in an audio recording posted online by the Guido Fawkes website.
“Superficially he is a black man. He went to Eton, I think, he went to a very expensive prep school, all the way through, the top schools in the country.
“If you hear him on the Today programme, you wouldn’t know he is black,” Rupa Huq was quoted to have said by news.sky.com.
The Labour Party condemned the remarks by the MP and urged her to apologise.
Rupa Huq in a post on social media indicated that she had contacted the UK finance minister to apologise to him in person for the comments she made.
“I have today contacted Kwasi Kwarteng to offer my sincere and heartfelt apologies for the comments I made at yesterday’s Labour conference fringe meeting.
“My comments were ill-judged and I wholeheartedly apologise to anyone affected,” the post she shared read.
Background on Kwesi Kwarteng:
Kwasi Kwarteng became the first black person to become UK’s Chancellor of the Exchequer (Finance Minister) following his appointment by UK Prime Minister, Liz Truss, on September 6, 2022.
Kwarteng was born Akwasi Addo Alfred Kwarteng in Waltham Forest, East London, in May 1975 to Ghanaian parents, Alfred and Charlotte, who had both immigrated to the United Kingdom a decade earlier as students.
His parents, who went on to become an international economist and a barrister respectively, sent him to an expensive private prep school that produced numerous Cabinet-level politicians. He then attended the famous Eton college — a production line for British leaders including Boris Johnson and David Cameron.
The diverging approach to tax, following Kwasi Kwarteng‘s mini-budget, raises questions for the Scottish government – about how much it could lose in revenue if that gap widens further.
“Behavioural effects” by high earners seeking to minimise their tax bills can backfire on a finance minister who wants to raise revenue from the highest earners.
If you’re earning more than £150,000… first of all, that’s very nice for you. But there’s going to be quite a big gap between the tax rate you’ll pay on your earnings to Westminster, and the rate you might pay if you’re classified as a Scottish income tax payer.
Each marginal pound over that level will bring you a bill of 46p from the Scottish government, while Kwasi Kwarteng, the new chancellor, is asking for 40p from next April. So, which would you prefer to pay?
If, let’s say, your earnings are £250,000 a year, you’ll pay just over £101,000 in Scottish income tax. Unless there are further changes, from next April, that will be £9,046 more than you would pay for the same earnings in England.
For that, you’ll get higher public spending per head (which ought to mean a higher quality), free university tuition fees, a more generous level of support for elderly care, free prescription, eye tests, and so on.
So you may reckon that it’s money well spent, or that it’s a part of the social contract that you ought to support, as life has been financially rather kind to you.
Tax net
Or you may take a different view – that the money you earn is yours, and you should do what it takes to minimise the amount you hand over to His Majesty’s Revenue and Customs.
You have a higher incentive to lower your tax bill than lower earners, and you can probably afford a clever accountant.
So what can you do to avoid that higher Scottish tax bill? Well, you could move to England. But if the £9,000 is the tax gap you’re facing, that’s unlikely to cover your bill for removers. And although prices vary, England’s average house price is substantially higher than Scotland’s.
Or you could stay where you are and your accountant could transfer your earnings so that they’re caught in the Westminster tax net.
If you own a business, you can take your pay in dividends instead of a salary. Dividend tax is paid at the rate set by Kwasi Kwarteng – all of it, not just at the margins.
That means a big loss in revenue to the Scottish government.
Fat cats
We’re talking here about someone who is exceptionally well off, in the top 0.6% of Scottish taxpayers, and who is currently living in Scotland.
What about someone thinking of moving to Scotland? Let’s say, someone who is earning a bit less, and doing a job that we highly value. A doctor, for instance. The whole of the UK needs more of them, so they can choose where they locate.
If that consultant is on £100,000 annual earnings, they will pay £2,420 more income tax next year by taking a job in Scotland rather than south of the border.
Image source, Getty Images
Image caption,
A consultant earning £100,000 a year will pay £2,420 more income tax next year by taking a job in Scotland rather than England
Not such a bad deal when you consider the advantages. But that’s just year one: you’ll have to make a judgement on whether that gap is going to widen. And then, there’s the tax on buying a house.
Let’s suppose this doctor wants to get a home that fits the status, costing £750,000 (in Edinburgh, Glasgow and some nearby suburbs, that doesn’t buy as much as you might think). The transactions tax or stamp duty for that in England has just been cut to £25,000, while in Scotland, it’s £48,350.
If that doctor already owns a house and doesn’t want to sell it, for whatever reason, the tax on buying that additional home in Scotland will be £78,350.
This is not to get any sympathy for high earners facing big tax bills. It’s to set out the issues as they see them. And as they include doctors, they can’t all be caricatured as fat cats.
Working from home
We’re talking here about “behavioural effects” of diverging tax regimes. Where people can move freely, as they can in a nation state such as the UK or USA, different tax rates provide an incentive to move. And the more you earn, the higher incentive.
We don’t know how big the effect will be in the UK, because we’re new to this. In the US, you can see over a long period the effect of low tax New Hampshire increasing its population on the border with higher tax Massachusetts, within commuting distance of Boston.
For decades there has been a move from the northern, higher-tax rust belt to the southern, lower-tax sunbelt. Some of that is for the quality of life, but not all.
That long-term effect has been speeded up by Covid, the shift to working from home, and increasingly working a long way from your office.
There is now tax competition similar to the appeals to corporates, wishing to bring these “digital natives” to pay low tax rates in attractive places to live.
CNBC reports that of the five US states with the biggest out-migration, four are seen as “high tax”. And if the response to losing the high-earning tax base is to increase taxes more to protect public services, it cites concerns that the trend will only accelerate.
Priorities diverge
So how will these “behavioural effects” play out with divergent tax regimes in Scotland and the rest of the UK?
The Scottish Fiscal Commission had a go at estimating the effect when the Scottish government chose to put an extra penny on three of its five tax bands.
For those earning more than £150,000, the 45% rate went up to 46% in Scotland, and the “higher rate”, now kicking in just above £43,000, went up to 41% instead of the nearest equivalent Treasury rate of 40%.
The higher rate was reckoned to bring in £115m more by this year, if nothing else changed. But things do change, and assuming five years of behavioural effects, the Fiscal Commission reckoned there would be a loss of £27m in the higher rate bracket, so a net gain of £88m.
Image source, PA Media
Image caption,
The mystery man, from the Wakefield area, asked for his name and address to be kept secret
The additional rate earners showed behavioural effects to be strongest. The fiscal commission, which produces the figures the Scottish government must work with, reckoned on an increase in revenue, if nothing else changed, of £35m by this year.
But if behaviour does change in ways that these public finance experts assume it would, they would reduce income by £32m, leaving only £3m net gain.
That was for a gap of one penny in the pound on earnings above £150,000. Assuming the Scottish government does not choose to match Kwasi Kwarteng’s abolition of that additional rate of tax (meaning his marginal rate falls from 45p to 40p – the higher rate), you could reasonably guess that the behavioural effect will mean the 46p rate is negative.
It doesn’t take many such people to make a big difference. There are somewhere around 20,000 people who are above the £150,000 threshold for additional rate tax. The figures for 2019-20 show they paid one pound in every six of Scottish income tax revenue. The UK is unusually dependent on such high earners for its income tax revenue – the Treasury moreso than Holyrood.
So while the Scottish government can be clear that any future tax cuts are unlikely to favour the highest earners, because its priorities diverge from those of the new occupants of Downing Street, it can’t ignore the risk to revenue if it creates incentives for those high earners to take themselves or their earnings out of Scotland.
Liz Truss’s new UK government delivered the most sweeping tax cuts since 1972, slashing levies on rich households and companies in a bid to boost economic growth in a move that triggered a massive market selloff of the currency and bonds.
Chancellor of the Exchequer Kwasi Kwarteng announced a series of tax cuts and regulatory reforms that will cost £161 billion (more than R3 trillion) over the next five years. That fanned concerns about inflation, already near a 40-year high, and about a spiraling government debt burden.
The pound crashed below $1.11 for the first time since 1985, sliding 2% in addition to declines earlier in the week. Borrowing costs on five-year government bonds jumped the most for a single day on record as traders dumped UK assets.
The pound fell to R19.71 on Thursday afternoon, from R19.94 earlier today.
“It is extremely unusual for a developed market currency to weaken at the same time as yields are rising sharply,” said George Saravelos, global head of foreign exchange research at Deutsche Bank AG. He warned the UK currency is “in danger” and suggested markets were treating it like a developing economy.
The package was more ambitious than expected, with a big giveaway for the UK’s wealthiest households and plans to tear up planning rules and reform financial regulations.
Kwarteng scrapped the 45% additional rate of income tax, paid by only the richest earners, leaving the top rate at 40%, and cut the basic rate from 20% to 19%. He paid only lip service to concerns about rising public debt, reiterating a pledge to “reduce debt as a percentage of GDP over the medium term.”
The Conservative administration hopes its program of lower taxes and deregulation will turbo-charge the economy, staving off a recession that the Bank of England says has already begun and shaking the UK out of a decade of weak growth.
Casino economics
Business groups embraced the decision, while economists said the measures may quickly become unaffordable. Unions and the Labour opposition said the measures will benefit the rich and do little to help those on moderate incomes with a tightening cost-of-living squeeze.
The opposition Labour party branded it “casino economics” and others warned that the government’s fiscal credibility now depended on whether it can hit its growth target. Kwarteng rejected that criticism.
“For too long in this country, we have indulged in a fight over redistribution,” the chancellor said. “We won’t apologize for managing the economy in a way that increases prosperity and living standards. Our entire focus is on making Britain more globally competitive.”
He set a target of 2.5% trend growth, a level not seen since before the 2008 financial crisis.
“We promised to prioritize growth,” he told Parliament in London on Friday. “We promised a new approach for a new era.”
The Treasury responded to concerns about high levels of borrowing needed to pay for his giveaway by promising new fiscal rules later this year that will ensure the debt falls as a share of national income “in the medium term.”
Kwarteng’s department also released figures suggesting stronger growth could lower borrowing by £40 billion. He said the numbers would be properly costed by the Office for Budget Responsibility.
“The policies announced in Chancellor of the Exchequer Kwasi Kwarteng’s mini-budget will provide the economy with a sugar rush over the next year, but we highly doubt it’ll deliver the gear shift in growth that the government is banking on,” Dan Hanson, Bloomberg Economics. That means it will lift inflation at a time when the Bank of England is trying to cool price pressure and, because the policy package is unfunded, put debt on an unsustainable path.”
The measures will deliver a massive fiscal stimulus at a time when the Bank of England is struggling to rein in inflation, which at 9.9% is almost five times its target.
The plunge in gilt markets means that investors are now betting the central bank boosts its benchmark lending rate a full percentage point to 3.25% in November, which would be the sharpest increase since 1989. It’s a sign that traders believe that the extra borrowing will do little for growth but drive up prices even more quickly.
Paul Johnson, director of the Institute of Fiscal Studies, said the plan amounts to the biggest single giveaway by the Treasury since 1972, when Ted Heath was prime minister and Anthony Barber chancellor. Barber’s budget resulted in spiraling inflation and a recession.
“That budget is now known as the worst of modern times,” Johnson said on Twitter. “Genuinely, I hope this one works very much better.”
Tim Sarson, head of tax policy at KPMG, said the mini-budget signaled “a clear change of direction” and a “return to the economics of the 1980s.”
Martin Weale, who served at the BOE from 2010, said the government plans will “end in tears” and a run on the pound.
The chancellor’s plan included a pledge to liberalize regulations on planning and in the City of London’s financial district, ending a cap on bonus pay for bankers.
Additional eye-catching measures include a cut on stamp duty, which is charged on property purchases, removing 200,000 buyers out of the tax altogether. A planned 1.25% increase in payroll taxes this year was reversed. Businesses were given help, with the planned increase in corporation tax from 19% to 25% next year abandoned and investment allowances increased.
That came on top of support for households and businesses with spiraling energy costs. The Treasury said the emergency energy package, under which household bills will be frozen for two years, will cost £60 billion over the next six months.
Steps to reduce planning restrictions for land use, “getting out of the way to get Britain building”
Creating 40 new “investment zones” with lower regulations for those who build businesses Cancelling a planned increase in duties on alcohol Truss and her allies say the program won’t spur inflation and that cutting taxes and bureaucracy will allow businesses to expand and draw more people into work, lifting tax revenue in the process.
“What we’ve seen today is a significant shift in economic policy in the UK, and I think it’s the right one,” Gerard Lyons, chief economic strategist at Netwealth Investments Ltd. and an adviser to Truss, said on Bloomberg Radio. “If the policy is right for economy, then also it should be right for the markets as well.”
Economists and former Bank of England officials attacked the plans even before Kwarteng appeared in the House of Commons on Friday. Danny Blanchflower, a policy maker during the global financial crisis more than a decade ago, said investors should short the pound.
Other critics include the Resolution Foundation, which points out the measure will widen inequality, handing more benefits to the richest people in society and costing those on lower incomes more.
New chancellor Kwasi Kwarteng said the cut in the basic rate of income tax from 20% to 19% would benefit more than 31 million people.
The cut, which applies to people who earn between £12,571 to £50,270, comes a year earlier than planned.
In a surprise move, the 45% highest tax band for people who earn over £150,000 a year has also been axed.
The reduction in income tax, along with the reversal of the National Insurance rise, will see higher earners save more money.
A person earning £20,000 a year will save £167, according to analysts at EY.
Meanwhile, an individual with an income of £40,000 will save £617 and a person with earnings of £60,000 will save £969. A person on £100,000 will get an extra £1,469.
During his mini-budget, the chancellor said high tax rates “damage Britain’s competitiveness” and reduce incentives for new businesses, arguing that tax cuts are “central to solving the riddle of growth”.
Mr. Kwarteng said scrapping the highest 45% tax rate would also “reward enterprise and growth”.
The policy change means people earning more than £150,000 a year will instead pay the tax rate of 40%, which is applicable to earnings of more than £50,270 a year.
However, the change will not apply to Scotland where income tax bands are different. People in Scotland who earn more than £150,000 a year currently pay a 46% rate. The cut in basic rate tax to 19p in the pound also does not apply in Scotland.
Rachel McEleney, associate tax director at consultancy firm Deloitte, said under the new policy, higher rate taxpayers would save £377 next year, compared to this year.
She said the majority of taxpayers in England, Wales, and Northern Ireland, who will pay the basic rate of 19%, will see “some savings, albeit less” from April.
Ms McEleney said for a person will earnings of £200,000 a year, who do not live in Scotland, their income tax bill would be reduced from £74,960 this financial year to £72,083 in next year, resulting in a tax saving of £2,877.
Labour shadow chancellor Rachel Reeves said the mini-budget prioritized big business over working people by relying on a theory of “trickle-down economics”.
“The prime minister and chancellor are like two desperate gamblers in a casino chasing a losing run,” she said in response to Mr Kwarteng’s plans.
Households across the UK have been feeling the pinch of higher prices in recent months, with higher energy bills and rising food prices fuelling inflation to a 40-year high.
The government has announced support to help with energy costs, limiting the typical household bill to £2,500 a year until 2024, but bills are still set to rise in October.
Rebecca McDonald, the chief economist at the Joseph Rowntree Foundation charity, said the government had chosen to “turn its back on millions who are on the lowest incomes”.
“This is a budget that has wilfully ignored families struggling through a cost of living emergency and instead targeted its action at the richest,” she said.
“Families on low incomes can’t wait for the promised benefits of economic growth to trickle down into their pockets.”
However, Mark Littlewood, director general at free-market think tank the Institute of Economic Affairs, said the axing of the highest rate of income tax would mean higher earners would spend “more time boosting their own productivity”
“The additional rate of income tax (45p) was always performative politics rather than sound economics,” he said. “The 1p off the basic rate of income tax will put more money in people’s pockets.”
The abolition of the highest tax band, which was introduced in 2010, came as a surprise to many economists.
“It really is that kind of rabbit out of the hat..that not only is the additional rate going to be completely abolished, but also the cuts to the basic rate of income tax are going to be brought forward a year,” said Michael Brown, head of market intelligence at finance firm Caxton.
On Monday, September 19, 2022; people from all walks of life attended the state funeral of Queen Elizabeth II at the Westminster Abbey in London.
Millions across the world followed the event on TV, online and across social media platforms as the world paid its last respects to the monarch who reigned for seven decades.
The event as expected was strictly by invitation, so much so that, even some world leaders were not invited – among others, Vladimir Putin and Emerson Mnangagwa, presidents of Russia and Zimbabwe respectively.
According to reports, four Ghanaians were formally invited to the event for different reasons. Ghana’s First Couple were in London for the event as were two other personalities with Ghanaian parentage who are British.
Nana Kofi Twumasi-Ankrah, a one-time equerry of the Queen was in attendance, escorting the cortege on its last journey from the Westminster Abbey to the Royal Vault. The fourth Ghanaian was Kwasi Kwarteng.
Kwarteng, who is British-born but with Ghanaian ancestry, and the current UK Chancellor of the Exchequer (Finance Minister), was also in attendance.
He, however, courted controversy on social media after he was captured in a viral video smiling at a point during the ceremony – specifically when a two-minute silence had been declared for the memory of the queen.
Angry social media users – especially on Twitter – called for his head for desecrating what was a solemn occasion for the nation.
Others also alleged that Kwarteng was smiling at himself because he was most likely picking a personal call and had been told something that gave his cause to smile at a rather off time.
Kwarteng, as a senior member of Prime Minister Liz Truss’ government had a prominent seat at the venue of the service.
Below are some of the critical tweets:
This is extraordinarily dreadful and concerning! Britain’s new chancellor @KwasiKwarteng laughing during the service of the #queensfuneral
Totally disrespectful but also raises more questions around his suitability for office.pic.twitter.com/JyoYzpSWUE
When Kwasi Kwarteng delivers his mini budget on Friday all opposition MP’s should coke up, wipe their brows, sway uncontrollably, and laugh like the laughing policeman. pic.twitter.com/mxPRaQ3aNG
Akwasi Addo Alfred Kwarteng (born May 26, 1975), better known as Kwasi Kwarteng, is a British politician who, from 2021 to 2022, held the position of Secretary of State for business, energy, and industrial strategy.Â
Kwarteng was born in the London Borough of Waltham Forest as the only child of Ghanaian immigrants Alfred K. Kwarteng and Charlotte Boaitey-Kwarteng. His mother is a barrister, and his father works for the Commonwealth Secretariat as an economist. Â
He is a Conservative Party member who has served as the Member of Parliament (MP) for Spelthorne in northern Surrey since 2010.
Following the resignation of Suella Braverman, Kwarteng was appointed Under-Secretary of State at the Department for Exiting the European Union on November 16, 2018.Â
Kwarteng was then promoted to Minister of State for Business, Energy, and Clean Growth after Boris Johnson was elected Prime Minister in July 2019.
Kwarteng then attended Eton College as a King’s Scholar and was offered the renowned Newcastle Scholarship.
He received a first in both classics and history from Trinity College, Cambridge, and won the Browne Medal twice.
He was a member of the 1995 University Challenge-winning team (in the first series after the programme was revived by the BBC in 1994).
He was a member of the University Pitt Club at Cambridge and has since returned to visit.
He received a PhD in economic history from the University of Cambridge in 2000. He attended Harvard University on a Kennedy Scholarship.
Private life
Friends have described Kwarteng as being “intensely private.”
Prior to that, he was dating Amber Rudd, a former Conservative home secretary.
In December 2019, he wed City solicitor Harriet Edwards.
They welcomed a daughter on October 15, 2021.
He previously resided in Bayswater and bought a home in Greenwich in January 2022.
Early career
Kwarteng worked as a journalist for The Daily Telegraph and as a financial analyst for JPMorgan Chase and other investment firms before becoming a member of parliament.
In 2011, Bloomsbury published his book, Ghosts of Empire, exploring the legacy of the British Empire.
In 2011, he co-wrote Gridlock Nation with Jonathan Dupont, a book exploring the causes and solutions of traffic congestion in the United Kingdom.
Early political career
Kwarteng, considered “a rising star on the right of the party,” ran for the Conservatives in the Brent East constituency in the 2005 general election.
He finished third, behind incumbent Liberal Democrat MP Sarah Teather (who had won the seat in a by-election in 2003) and Labour Party candidate Yasmin Qureshi.
In 200506, Kwarteng was the chairman of the Bow Group. The Times speculated in 2006 that he would become the first black Conservative cabinet minister.
In the 2008 London Assembly election, he was sixth on the list of Conservative candidates for the London Assembly, but he was not elected because the Conservatives won only three London-wide list seats.
Parliament
Kwarteng was picked as the Conservative candidate for Spelthorne in a January 2010 open primary, after the incumbent Conservative MP, David Wilshire, became embroiled in controversy stemming from the Parliamentary expenses scandal and stated he would not seek re-election.
Kwarteng was elected with 22,261 votes cast (numerically more votes but a lower percentage of the vote than his predecessor). In October 2011, Kwarteng did not vote on the backbench EU Referendum Bill.
In 2013, Kwarteng angered Chancellor of the Exchequer George Osborne by deeming the Help to Buy housing programme inflationary.
War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt was released in 2014. It is a history of capital and the enduring capacity of money and speculation to destroy societies.
This book has been rendered in Spanish and Mandarin Chinese. Thatcher’s Trial: Six Months That Defined a Leader was his next book, published in 2015.
At the 2015 general election, Kwarteng was re-elected with a larger majority.
In the 2016 referendum, Kwarteng supported the United Kingdom’s departure from the European Union.
Early days as a ministerÂ
Kwarteng was chosen to serve as Philip Hammond’s Parliamentary Private Secretary after the 2017 general election. Suella Braverman was succeeded as a minister in the Department for Exiting the EU by Kwarteng on November 16.
In the 2016 and 2019 contests for the leadership of the Conservative Party, Kwarteng was a prominent supporter of Boris Johnson.
On July 25, 2019, Kwarteng and Jo Johnson, the prime minister’s brother, were named as ministers of state at the Department for Business, Energy, and Industrial Strategy following Johnson’s victory in the latter election.
On the same day, he received his Privy Council appointment.
After the Court of Session ruled that Boris Johnson’s prorogation of parliament was unlawful in September 2019, Kwarteng was criticised by former leader of the Liberal Democrats, Menzies Campbell, for saying on The Andrew Neil Show: “I’m not saying this, but, many people are saying that the judges are biassed.”
“Many people are concerned about the extent to which attorneys and judges are meddling in politics,” Kwarteng continued.
Business, Energy, and Industrial Strategy Secretary (20212022)
He took over for Alok Sharma as Secretary of State for Business, Energy, and Industrial Strategy on January 8, 2021 as part of a smaller reorganisation.
After Paul Boateng, the first black Conservative and Chief Secretary to the Treasury, he was the second black man to have a position in the Cabinet.
By being promoted to the position of Secretary of State, he also made history by being the first black man to lead a government agency.
He has promised to reduce world emissions in order to halt climate change.
Kwarteng inaugurated a brand-new electric vehicle battery facility in Oxfordshire in May 2021.
He takes over at a critical time for the UK economy, with millions looking to him for help with soaring winter energy bills.
The decisions he makes in the coming days and weeks will have a huge impact on the country’s future prospects, as well as on the Conservative Party’s prospects of retaining power.
He will not be short of support from his new Downing Street neighbour. One friend told the Times Mr Kwarteng and Ms Truss were a bit like “Batman and Robin”, adding: “They are both slight social misfits, amiable geeks, and have strong views which are in tune with each other.”
Nor is he likely to be accused of lacking intellectual firepower or self-confidence. An Old Etonian, who became the first black Conservative cabinet minister in 2021, he has a double first from Cambridge University and a PhD in economic history. He is also a past winner of notoriously tough BBC quiz show University Challenge.
of new prime minister Liz Truss, has been named as the UK’s next chancellor.
He takes over at a critical time for the UK economy, with millions looking to him for help with soaring winter energy bills.
The decisions he makes in the coming days and weeks will have a huge impact on the country’s future prospects, as well as on the Conservative Party’s prospects of retaining power.
He will not be short of support from his new Downing Street neighbour. One friend told the Times Mr Kwarteng and Ms Truss were a bit like “Batman and Robin”, adding: “They are both slight social misfits, amiable geeks, and have strong views which are in tune with each other.”
Nor is he likely to be accused of lacking intellectual firepower or self-confidence. An Old Etonian, who became the first black Conservative cabinet minister in 2021, he has a double first from Cambridge University and a PhD in economic history. He is also a past winner of notoriously tough BBC quiz show University Challenge.
