Kwasi Kwarteng had no idea it was coming. After a seven-hour overnight flight from Washington he emerged from Heathrow smiling for the cameras before his meeting with Liz Truss.
Sixteen minutes later he was sitting in his ministerial car on the way back to London when The Times broke the news that he was about to be sacked. He arrived in Downing Street shortly after noon, by then cutting a glum figure.
The
prime minister told him that despite their decade-long friendship and shared economic vision, she had no choice but to sack him. He had
lost the confidence of the markets and the parliamentary party and had to go. In a single, brutal stroke she sacrificed one of her oldest political allies for expediency and in the hope of survival.
Kwarteng was sanguine but is said privately to believe the decision will buy her only a few more weeks. “He thinks the wagons are circling,” a source said.
Truss, friends say, found it incredibly painful but decided it had to be done. She believes the combination of the sacking and reversing her pledge to freeze corporation tax will be enough to convince markets that the government is serious about fiscal restraint.
In fact, the sacking was even more brutal than it appeared. Truss decided to dismiss Kwarteng hours earlier, contacting his successor,
Jeremy Hunt, at 9.30am to offer him the job while he was on holiday with his wife in Belgium.
Hunt asked for a moment to think about it before calling back and accepting. Truss said she wanted their relationship to be similar to that of David Cameron and George Osborne, based on trust and mutual respect. Hunt said that was the only way it could work.
Hunt took a Eurostar back to London, arriving on British soil shortly after 1pm. He met Truss to formally cement his role just after 4pm.
The genesis of today’s extraordinary sequence of events and the sacking of Kwarteng lies in the draft forecasts of the Office for Budget Responsibility, which were handed to the government on Friday last week. They are said to be “dire” and suggest there will be a £60 billion black hole in public finances by 2026-27.
With the markets already in turmoil, 10 and 11 Downing Street accepted that the forecasts could be enough to finish off Truss. The chancellor was advised by No 10 not to attend the International Monetary Fund’s meeting in the US but decided he had to go.
While he was away, No 10 began urgent work on the corporation tax U-turn. The first Kwarteng knew about it was yesterday morning, when The Times disclosed that senior officials were advising Truss to raise corporation tax to try to balance the books.
