Who could replace Kwarteng?

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.

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”.

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.”

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:

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 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.

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 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.

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.”

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.”

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.

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 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.

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?

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.”

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.”

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.

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.