The head of the civil service is facing calls to order an investigation into whether Kwasi Kwarteng breached the ministerial code when he attended a champagne reception with hedge fund managers after his mini-budget. The chancellor has conceded that “with hindsight it probably wasn’t the best day to go” to the gathering following his statement, which included scrapping the bankers’ bonus cap and the abolition of the 45p top rate of tax. He was later forced to U-turn on his 45p plan. While some hedge fund managers stood to profit from the fall in the pound that followed Kwarteng’s statement, his team have said that any suggestion that the gathering was given privileged information was “total nonsense”. However, he is being asked to clarify whether he adhered to the ministerial code at the Conservative party gathering. The code states that ministers who discuss official business at a “social occasion” while not in the presence of civil servants must report the content of discussions to their department as soon as possible.
The event took place at the luxury west London home of Andrew Law, a financier and Conservative party donor, on the evening after the mini-budget. Initial reports suggested that the chancellor spoke about forthcoming spending, though his team said that his ambitions to lower the tax burden were “hardly a state secret”. Kwarteng subsequently declared there was “more to come” in terms of tax cuts in an interview that many blamed for spooking the markets and causing a temporary collapse in the pound. Among those to attend the Chelsea gathering were stockbroker Howard Shore, banker Sir Henry Angest, corporate financier and Lord Leigh of Hurley and Selva Pankaj, a merchant banker. The previous week, it was revealed that Kwarteng had dined with Crispin Odey, a hedge fund manager who once employed him. Odey has said that bets against UK government bonds are the “gifts that keep on giving”. Section 8.14 of the ministerial code states: “If a Minister meets an external organisation or individual and finds themselves discussing official business without an official present – for example at a social occasion or on holiday – any significant content should be passed back to the department as soon as possible after the event.” Christine Jardine, the Liberal Democrat cabinet office spokesperson, has written to cabinet secretary Simon Case, demanding to know whether the code has been breached. “The image of the chancellor quaffing champagne with bankers just hours after announcing his tax cuts for the very wealthiest in society is bad enough,” she said. “But it would be unforgivable if it turns out Kwasi Kwarteng discussed his plans with hedge fund managers who have since been profiting from the fall in the pound.
“The cabinet secretary must immediately investigate whether the chancellor breached the ministerial code. We need to know who was at this event, what discussions were had and if they were properly reported. The public is suffering the disastrous consequences of this budget, with soaring mortgage payments and expected cuts to public services. They deserve to know whether the chancellor has broken the rules as well as trashing the British economy.” It is unclear who would carry out such an investigation. There is currently no one in the role of Truss’s adviser on the ministerial code. The last incumbent, Lord Geidt, became the second adviser to resign from the job under Boris Johnson, after saying that he had been asked to advise on “potential law breaking”. Treasury sources said the meeting was a party political event and it would have been inappropriate for the civil service to attend. Any significant government business was reported back to officials, they said.