The Chancellor was on Friday forced out of his job amid backlash over his mini-budget.
Kwasi Kwarteng flew home early from Washington for crisis talks with Liz Truss on quelling market turmoil with another humiliating U-turn on his fiscal policies on the horizon.
In his resignation letter, Mr Kwarteng said: “You have asked me to stand aside as your Chancellor.
“I have accepted. When you asked me to serve as your Chancellor, I did so in full knowledge that the situation we faced was incredibly difficult.
“As I’ve said many times in the past weeks, following the status quo, was simply not an option.”
Having served just 38 days in the job, Mr Kwarteng is the second shortest-serving UK Chancellor on record and his replacement will be the fourth person to hold the position in as many months.
— Kwasi Kwarteng (@KwasiKwarteng) October 14, 2022
The shortest serving, Iain Macleod, died in office 30 days after taking the job in 1970.
Ms Truss is believed to want to install a replacement in the Treasury before she faces questions from the press.
As she raced to stop the economic chaos from imperilling the Government, speculation was rife that the £17 billion decision in the mini-budget not to go ahead with a previously planned rise in corporation tax would be reversed.
But amid the frenzied atmosphere at Westminster, uncertainty hung over the Prime Minister’s actions given the incredible pace that events were unfolding and at midday.
The value of the pound fell sharply in the30 miniutes after reports emerged that Mr Kwarteng is no longer chancellor.
Sterling is now back below $1.12, trading 1.3 per cent lower than it was.
The pound rallied strongly on Thursday after rumours of a planned U-turn on key elements of Kwarteng’s mini-budget.
In a further blow to his reputation, an Ipsos poll for the Evening Standard showed he had plunged to a record low of nearly 50 years for chancellors after his mini-budget mayhem.
It found 65 per cent of adults in Britain are dissatisfied with him, and just 12 per cent satisfied, giving him a net rating of -53 at just over a month into the job. No other chancellor has had a worse rating even as far back as when Denis Healey was at the Treasury helm in 1976, the year that the Labour government had to beg the International Monetary Fund for a bailout.
Mr Kwarteng’s net satisfaction figure is on the same level as Norman Lamont’s of -52 in March 1993, around six months after Black Wednesday when the Government was forced to withdraw sterling from the Exchange Rate Mechanism, and Ken Clarke’s of -53 in December 1994, when quarterly unemployment averaged 2.5 million.
Earlier, Trade Minister Greg Hands had insisted that the Prime Minister still had “total confidence” in Mr Kwarteng. Just 39 days since she entered No10, some Conservative MPs were discussing who could replace Ms Truss if the crisis does not pass.
In a sign of the frenzied atmosphere at Westminster, former Cabinet minister Nadine Dorries claimed male “grandee” supporters of Rishi Sunak, who believed Ms Truss had to go, were involved in “a plot not to remove a PM but to overturn democracy”.
Amid the infighting, Tory MP Mel Stride, chairman of the Commons Treasury committee, urged fellow backbenchers to give Ms Truss and the Chancellor “space”, at least until October 31 when a new fiscal statement is due, to see if their plans will work.
He also warned that the markets had already priced in a “significant rowback” on the mini-budget and if this did not now happen they “may simply have an adverse reaction”.
“So my advice to the Chancellor would firmly be do it, do it now, make sure it’s something significant, not just nibbling at the edges, but something that is going to be firm, bold and convincing but do it as soon as possible,” he told BBC Breakfast.
Mr Hands, though, had insisted that “there are no plans to change anything,” despite the widespread expectation that a U-turn was imminent.
Shadow cabinet minister Ed Miliband told Sky News: “This is a government in meltdown and an economic policy in tatters.
“The Conservative Party should be hanging their head in shame at what it’s putting the country through. This is about people’s livelihoods, people’s homes, people’s mortgages.”
Mr Kwarteng had been in Washington for a financial summit.
Before he left, he initially insisted he stood by his economic growth plan and would be setting out how he intended to get the public finances back on track in a statement on October 31 as planned.
However, few MPs believed he could afford to wait that long, and in a later interview with The Daily Telegraph he said only “let’s see” when asked if he could ditch his promise on corporation tax.
Ministers have sought to play down the impact of the mini-budget on September 23 which led to the pound nosediving, before recovering, a pension fund crisis which forced the Bank of England to intervene, pushed up the cost of government borrowing and triggered rises in mortgage rates.
But even after taking into account the £60 billion energy bills support package, more than half of adults believe that overall it will leave them out of pocket, with a third saying it will make little difference and just 10 per cent expecting to be better off. The poll also showed:
Labour on 47 per cent, up seven points on last month, the Conservatives on 26 per cent, down four points, and Lib Dems on 10, down three points.
Labour’s 21-point lead is its highest in an Ipsos poll since October 2002, though its methodology has changed over the years.
One in five 2019 Conservative voters now say they have switched to Labour.
67 per cent of adults are dissatisfied with Ms Truss, up 38 points on last month, with 16 per cent satisfied, down 11 points, and 17 per cent say they “don’t know”, down 27 points.
Thirty-eight per cent of voters are satisfied with Sir Keir Starmer, up seven points on last month, 39 per cent dissatisfied, down six points.
Gideon Skinner, head of political research for Ipsos UK, said: “Even in our long-term trends going back over the decades there are few prime ministers (and no chancellors) with worse scores, and none that have deteriorated so quickly.”
