Berliner Boersenzeitung - Kwasi Kwarteng: UK finance minister who failed to get off the mark

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Kwasi Kwarteng: UK finance minister who failed to get off the mark
Kwasi Kwarteng: UK finance minister who failed to get off the mark / Photo: Daniel LEAL - AFP

Kwasi Kwarteng: UK finance minister who failed to get off the mark

Kwasi Kwarteng became the second shortest-serving British finance minister, paying the price for weeks of UK market tumult prompted by his controversial tax-slashing mini-budget.

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His sacking on Friday represents a humiliation for the Cambridge- and Harvard-educated former Chancellor of the Exchequer -- who just the previous day had insisted he was "not going anywhere".

Only Iain Macleod, who died just a month after being appointed in June 1970, has had a shorter stint in the role.

Kwarteng's position became untenable just two weeks after he started on September 6, following his announcement on September 23 of sweeping tax cuts without any costings.

The package spooked currency and bond markets, which were concerned about his mammoth spending commitments, and the Bank of England was forced to make several emergency interventions to stabilise markets in the aftermath.

Liz Truss, who only became prime minister last month following the resignation of scandal-hit Boris Johnson, has since reversed on key parts of the plan, announcing the latest drastic U-turn on Friday.

Truss was voted in by members of her Conservative party on a promise to cut taxes, plans that her rival Rishi Sunak -- who was finance minister under Johnson -- said were a recipe for disaster in the face of spiralling inflation.

- 'Committed Thatcherite' -

Kwarteng's devout belief in liberal economics made him the obvious choice to carry out Truss's plans, despite the warnings.

The pair were also at the forefront of urgent moves to help millions of Britons suffering under the strain of rocketing energy prices that have pushed UK inflation to a 40-year high.

Those spending plans, allied with the tax cuts, sent sterling plunging to its lowest-ever value against the dollar last month, as critics decried the government's "KamiKwasi" economics.

Tony Travers, a professor at the London School of Economics, said Kwarteng was "having the blame pinned on him" but acknowledged that his position had been "compromised by the budget package".

"He and Liz Truss were delivering things they believed in... -- a smaller state with lower taxes," Travers told AFP.

"It might've worked if they'd prepared the ground (by saying) we're going to balance lower taxes by lower spending."

An enthusiastic backer of Brexit, the 47-year-old Kwarteng replaced Iraqi-born Nadhim Zahawi, who himself lasted only two months in the second most powerful job in British politics.

After Johnson's resignation, Zahawi took over from Sunak, who resigned as finance minister in opposition to Johnson before then losing out to Truss in the contest for 10 Downing Street.

Four years before the 2016 Brexit vote, Kwarteng joined Truss and other Tory right-wingers to write a free-market manifesto called "Britannia Unchained", which described British workers as "among the worst idlers in the world".

He enthusiastically endorsed Truss's plans for a "lean state" and to put "money back into people's pockets".

In presenting his doomed budget measures, Kwarteng declared it "a very good day for the UK, because we've got a growth plan".

But disquiet among Tory MPs rose before, during and after the party's fractious annual conference earlier this month, as opinion polls show voters strongly opposed to the budget plan, including its tax cuts for the richest.

Surveys have also shown the main opposition Labour party opening up a massive lead over the ruling Conservatives.

- TV swearing -

In his former role as energy minister, Kwarteng drew the ire of green groups after he said Russia's invasion of Ukraine meant the UK needed further investment in North Sea oil and gas drilling, to diversify its energy mix.

Britain's first black chancellor of the exchequer, Kwarteng is the London-born son of an economist and lawyer who emigrated from Ghana.

He won a scholarship to the elite private school Eton, before attending both the University of Cambridge and Harvard University.

While at Cambridge, he represented Trinity College on the highbrow quiz programme "University Challenge", earning his first national media exposure for uttering an expletive when he got a question wrong.

Kwarteng worked as a financial analyst and newspaper columnist before being elected as a Tory MP in 2010.

Former department colleague Mark Fletcher said Kwarteng was "fiercely bright and serious" and also a huge cricket fan.

"If you can explain things to him in a cricket analogy you will always get his attention," he told The Times.

Previously in a relationship with senior Tory MP Amber Rudd, Kwarteng is married to lawyer Harriet Edwards, who gave birth to a daughter last year.

(U.Gruber--BBZ)