The new British Chancellor of the Exchequer, Kwasi Kwarteng, has been the target of criticism and even a request for an investigation after it emerged that he was at a private party with investment fund or vulture fund managers before presenting the controversial tax cut plan for the highest incomes.
The Sunday Times has published that Kwarteng was at an event in the London neighborhood of Chelsea on September 23, where the managers encouraged him to defend his tax cut plan and stressed that the heads of the financial funds that organized the party benefited directly from the fall of the pound that occurred after the presentation of the tax plan.
British Prime Minister Lizz Truss has been questioned about the appropriateness of Kwarteng’s participation in such events considering the damage being done by inflation. “I wake up every morning thinking about how to make people in our country more successful, how to make them more secure, how to help people through this difficult time,” she has replied.
“That’s what I’m focused on. That’s what the finance minister is focused on and that’s what the whole government is focused on,” he reiterated.
The chairman of the Conservative Party, Jak Berry, also present at the controversial event, has denied Sunday in statements to Sky News that Kwarteng discussed the tax cut plan in the party. “I didn’t hear him talk about it. I heard him talk about his plan to generate growth,” he said.
Berry has defended the party’s relations with businessmen and has stated that “they should be praised” for this type of acts that are “something normal” for the Ministry of Finance.
The Liberal Democrat Party has called for an official investigation. “Households are having a hard time. They are seeing their mortgages soar and the Chancellor of the Exchequer drinking champagne with hedge fund managers who are profiting from the pound falling,” said Liberal spokeswoman Sarah Olney.
Treasury sources have stressed that “it makes no sense to imply that the attendees (at the party) had access to inside information.” “The government’s intention to lower the tax burden is no state secret,” they have argued.
Truss and his Chancellor of the Exchequer Kwasi Kwarteng’s cutting plan, the most aggressive in half a century, ended up pushing the risk premium on British debt close to that of Italy’s and forced the Bank of England to announce an upcoming interest rate hike.
Among other measures, the plan calls for the elimination of the 45 percent top rate (a decision for which Truss held Kwarteng responsible), the reduction from 20 percent to 19 percent of the basic rate, the elimination of the increase in corporation tax implemented by the previous Cabinet, and the cancellation of the current cap on bonuses received by bankers.