It seems that panic and turmoil is something the markets and Tory party currently have in common. Kwasi Kwarteng is flying home a day earlier than planned from the annual meeting of the International Money Fund in Washington – so he will be back in London this afternoon when the Bank of England is due to end its gilt-buying programme, risking further chaos on the markets.
So what’s Kwarteng up to? There are four options:
Could Kwarteng be hoping to swoop in and save the day?
1. Quell rebellion, argue against a U-turn
The Tory party is buzzing with speculation of a plot brewing to oust Liz Truss before Christmas. Katy Balls ran through the options in last week’s magazine, and the Rishi by Christmas option is picked up in the Times today suggesting a joint ‘coronation’ with Sunak and a queen: Penny Mordaunt. Mr S isn’t so sure about this (their respective teams are not talking to each other) but you get the idea. Kwarteng makes his premature dash back across the pond to plead with increasingly mutinous Tory MPs not to U-turn on parts of the mini-Budget.
2. Quell rebellion by performing a U-turn
When asked about a U-turn in corporation tax in Washington yesterday, Kwarteng said: ‘Let’s see’. So he could be hoping to swoop in and save the day by initiating a U-turn on the budget to calm the markets before the Bank of England let the axe drop this afternoon. After which of course his credibility would be shot and he risks going down in political history as a punchline.
3. Resign as Chancellor rather than perform the U-turn
Kwarteng said yesterday he would ‘100 per cent’ still be Chancellor a month from now, but Liz Truss gave similar assurances about the survival of her 45p tax rate. Might he be flying home to tell Truss that he’d rather resign than U-turn – that she can turn if she wants to, but she’d have to get someone else? Kwarteng is quite a proud man and won’t want to spend the rest of his career seem as a fiscal David Mellor, who tried to cheat on the markets and got busted. Perhaps he’d rather do a Sajid Javid and say that the Chancellor needs to decide such things – and if she orders him down, then fair enough but she can’t order him to eat the words she put into his mouth in the first place.
4. He doesn’t want to miss tonight’s episode of Strictly Come Dancing
Kwarteng’s powers of chillaxing put David Cameron to shame – so let’s not rule this out. And there’s rumours that Giovanni Pernice has threatened to quit the hit show as he feels ‘wasted’ in the current series. Kwarteng might sympathise and be keen not miss the drama.
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