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British chancellor of the exchequer Kwasi Kwarteng has been defended by senior Tories as opponents called for an official inquiry following a report that he attended a private Champagne reception with hedge fund managers who stood to gain from a collapse in sterling following his mini-budget.
The Sunday Times reported that he joined the gathering at the Chelsea home of a city financier on the evening of September 23rd where he was said to have been “egged on” to commit to his plan for £45 billion (€51.1 billion) of unfunded tax cuts.
The following Sunday, in a BBC TV interview, the chancellor declared there was “more to come”, a comment that was blamed for helping to spook the markets, driving the pound, which was already falling, to an all-time low against the dollar.
Tory chairman Jake Berry, who was at the event, insisted nothing untoward happened and Conservative Party donors at the event should be “lauded”, while prime minister Liz Truss said meeting business people was part of the chancellor’s job.
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Mr Berry told Sky News: “I was there so I listened to what he said and what he talked about was his plan for growth.
“I can categorically rule out that in terms of the address he made to the group of people who were there as part of this normal treasurer’s event, he did not give any insight into future plans and I’m sure in terms of his private conversations he didn’t give any.”
Mr Berry suggested the chancellor was drinking a soft drink rather than champagne and added: “We often have drinks receptions for donors in the Conservative Party and in fact 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 in the same way as they do for the Labour Party and the Liberal Democrats.”
Ms Truss told the BBC: “The chancellor meets business people all the time, that’s his job.
“I do not manage Kwasi Kwarteng’s diary, believe me.”
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Liberal Democrat treasury spokeswoman Sarah Olney said: “While struggling homeowners saw their mortgage bills spiral, it seems the chancellor was sipping Champagne with hedge fund managers profiting from the falling pound.
“How out of touch can you get?
“We need an official inquiry into this now.”
However, a source close to chancellor dismissed any suggestion of impropriety regarding his attendance at the reception.
“Any suggestion attendees had access to privileged information is total nonsense,” the source said.
“The growth plan published on Friday included a commitment to review our tax code to make it simpler, better for families and more pro-growth.
“The government’s ambitions on lowering the tax burden are hardly a state secret.”
The controversy comes amid increasing pressure of Ms Truss and Mr Kwarteng over the mini-budget.
Earlier on Sunday, Ms Truss acknowledged mistakes over the mini-budget but said she was standing by her tax-cutting plan as she refused to rule out public spending cuts.
Ms Truss acknowledged she could have done more to prepare the ground for Mr Kwarteng’s financial statement, which spooked the markets, sent the pound plummeting and forced a £65 billion (€73.9 billion) intervention by the Bank of England to restore order.
Furthermore, Ms Truss said the mini-budget’s most controversial measure, the abolition of the 45 per cent tax rate on earnings over £150,000 (€170,873) was not discussed with the cabinet but was a decision made by the chancellor.
Writing in The Daily Telegraph, Labour leader Keir Starmer said it is “unacceptable” that neither the country nor parliament has had any say on the measures despite the chaos wreaked on the financial markets. – Press Association