Cabinet secretary and head of the Home Civil Service, Simon Case, is facing calls to order an investigation into whether Kwasi Kwarteng breached the ministerial code by attending a private champagne reception with hedge fund managers after the unveiling of his tax-slashing mini-budget on September 23. The financiers stood to gain from a collapse in the pound sterling that accompanied the market turmoil that followed.
Christine Jardine, Liberal Democrat Cabinet office spokesperson, has written to Case demanding to know whether the code has been breached, The Guardian reported.
“The image of the chancellor quaffing champagne with bankers just hours after announcing his tax cuts for the very wealthiest in society is bad enough. But it would be unforgivable if it turns out Kwasi Kwarteng discussed his plans with hedge fund managers who have since been profiting from the fall in the pound,” she wrote.
Jardine urged for a probe that would reveal who was at the event, what discussions were had, and if they were “properly reported.”
“The public is suffering the disastrous consequences of this budget, with soaring mortgage payments and expected cuts to public services. They deserve to know whether the chancellor has broken the rules as well as trashing the British economy,” the Liberal Democrat added.
Section 8.14 of the ministerial code states:
“If a Minister meets an external organisation or individual and finds themselves discussing official business without an official present – for example at a social occasion or on holiday – any significant content should be passed back to the department as soon as possible after the event.”
As there is currently no one in the role of Prime Minister Liz Truss’s adviser on the ministerial code, it is unclear who would carry out such an investigation.
Twice in a year-and-a-half, the person appointed to oversee ethics and conduct in Truss’ predecessor Boris Johnson's government stepped down. Lord Geidt tendered his resignation after saying that he had been asked to advise on “potential law breaking.” Sir Alex Allan walked out in November 2020 after concluding that Home Secretary Priti Patel had breached the ministerial code but failed to elicit a sacking.
‘Out of Touch’ Chancellor
Kwasi Kwarteng has faced backlash over a private champagne reception with hedge fund managers following the announcement of the so-called mini-budget earlier in the day. The Sunday Times reported that at the event at the London home of Andrew Law, a financier, on the evening of September 23, Kwasi Kwarteng was “egged on” to commit to £45 billion in unfunded tax cuts.
The chancellor’s Growth Plan revealed on Friday ditched the top level of income tax and cut the basic rate by a percentage point, while also reversing a rise in the National Insurance payroll tax.
“There’s more to come,” Kwarteng said in a BBC TV interview the following Sunday, in a comment blamed for driving the pound, which was already falling, to an all-time low against the dollar.
The pound stood at $1.03 before regaining some ground, forcing the Bank of England to intervene to save pension funds.
The opposition slammed the chancellor for being “out of touch” with the people who were struggling with the cost of living crisis.
Anneliese Dodds, Labour Party chair, wrote to her Conservative counterpart, Jake Berry, urging him to produce a full list of attendees at the event. Liberal Democrat Treasury spokeswoman Sarah Olney demanded a probe into what Kwarteng told donors.
Among those who were reportedly to attend the Chelsea gathering were stockbroker Howard Shore, banker Sir Henry Angest, corporate financier and Lord Leigh of Hurley and Selva Pankaj, a merchant banker.
After the backlash, the chancellor himself conceded during an interview for LBC Radio:
“I think it was a difficult call and I totally get how it looks. I just feel that it was something that I was signed up to do and I had to do… With hindsight it probably wasn’t the best way to go.”
Jake Berry, the Conservative Party chair, has defended the chancellor, saying the drinks reception was not unusual and that, along with hedge fund managers, property developers were also attending.
“These people should be lauded because we don’t have public funding of political parties and these are people who go out and make money and donate to political parties. It wasn’t a get-together of hedge fund managers, it was Britain’s leading entrepreneurs. Yes, I was there, but it’s the normal drumbeat of treasurer’s events that we have all the time,” he told Sky News’ Sophy Ridge.