Labour’s call for the Financial Conduct Authority to be brought in to investigate the circumstances surrounding Britain’s calamitous so-called ‘mini-budget’ becomes more justified by the hour.
Red flags are now flying the breadth of Downing Street to indicate an immediate capture of the new Conservative clique in charge by a cabal of shadowy corporate catspaws and self-interested currency speculators, bent on framing policy to cut taxes, turn a fast buck and get the regulators off their backs.
Where Boris had plainly accommodated these deep pockets, Truss and her ‘ideological soulmate’, Chancellor Kwasi Kwarteng, appear utterly beholden, seemingly allowing special interests an inside track at the expense of the country they are entrusted to protect.
Immediately following the shock ‘mini-budget’ cum total reversal of economic policy ten days ago, City watchers had raised the alarm over evidence of huge apparent profits having been made in certain quarters by those who short-traded on the pound, having somehow foreseen the suicidal change of fiscal policy by the new Conservative leadership that few others had expected.
After all, this was advertised as a ‘mini-budget’, it had not been costed and measures such as the scrapping of the 45% tax bracket and tax on bonuses belonged to no manifesto and were barely flagged in the leadership contest.
Yet these speculators seem to have known the pound would nose-dive as soon as the ideologue chancellor, Kwasi Kwarteng, opened up his mouth, and sure enough the currency started plummeting during his very speech and then downwards over the ensuing days as he vowed to stay the course – the stuff of Treasury nightmares had come true in unprecedented fashion.
By last Monday, the shadow City minister Tulip Siddiq had called for the probe into the possibility of a ‘leak’ being behind such prescience. According to the Evening Standard, one highly-respected economist said he had “got wind of” the abolition of the top rate of tax (a massive economic and political gamble that has caused major loss of confidence) a couple of days before it was announced.
Meanwhile, it was being widely observed that one key beneficiary of Kwarteng’s crashing currency (Honey I Shrunk The Quids being the latest City joke) has been his former boss.
Kwarteng used to work for the peculiarly maverick Chrispin Odey, a major Conservative donor and pro-Brexiteer whose legendary investment fund has made a fortune betting on the disastrous effects on the pound of the Conservative policies he himself supported.
Having promoted and funded the Brexit campaign, for example, his Odey Asset Management gambled successfully on its negative effect on the pound by ‘shorting’ Britain’s currency in advance of the referendum, thereby netting £200 million in just one day after the campaign he’d supported won.
Mr Odey is known to have continued to take a short position on the pound (betting it will go down) all this year under the political party he supports, which has seen his fund rise in value by 140% so far.
The latest appalling tumble will only have benefitted the billionaire and his investors further, and analysts have told Sarawak Report they fully expect to see his fund up at least 600% by the end of the year as a result of the economic misery that has destroyed Britain’s economic standing in the world – crashing the currency Odey has bet against, whilst apparently supporting the policies that crashed it.
News emerged Sunday that Crispin Odey numbered among a clique of financiers and party donors who were privately invited to a gathering attended by Kwarteng on the very evening following his budget speech. The new party chairman, Jake Berry, and the long-term ‘senior treasurer’, Lord Howard Leigh, were there as well.
Leigh is regarded as a key architect of the system of special access that has enticed wealthy donors into boosting the party coffers by tens of millions in recent years, in return for elite closed gatherings and briefings, provided by ministers to interested businessmen prepared to pay.
Under Boris Johnson those meetings evolved into what is known as the ‘250 Club’ and insiders have described the post-budget champagne cocktail party at the house of billionaire donor Andrew Laws as one such event. “Everyone there was a 250 member or party flunky” one former associate has observed.
According to a Sunday Times report the event also followed the ‘250 Club’ pattern in that the honoured ministerial guest, none other than the man of the moment, Kwasi Kwarteng, delivered a short speech and answered questions.
The paper says attendees described him as ‘pumped up’ after delivering the budget and playing the ‘useful idiot’ in the eyes of the champagne quaffing attendees – many financial speculators – observed to have been praising him for his ‘bold’ moves, patting him on the back and telling him to ‘double down’ against the roars of criticism already raging up and down the country.
“He was high on adrenaline. His big thing was: ‘Look, we’re not going to do stuff incrementally. We really believe in this stuff and that’s what we’re going to do.’” [Sunday Times]
It is indeed sobering to consider that Mr Kwarteng, fresh from his economic studies in the realms of academia and full of theories, learnt his practical understanding of the world of markets at the knee of such an operator as Crispin Odey – wedded to principles of ‘trickle down’ economics on the one hand whilst ready to speculate against its failures on the other.
More troubling still is the evidence that Kwarteng at this event appears to have crossed the sacred line on disclosing inside information about his financial plans for the country.
There was much left unexplained by the mini-budget, particularly on the question as to where the Chancellor plans to find the cash to fund his unexpected tax cuts for the rich. This failure to divulge on costings until November (when the Chancellor promises to lay out his complete proposals) was one reason for the economic turmoil that followed his remarks.
The Sunday Times however says that Kwarteng revealed a lot more to this inner clique than he had to Parliament and the public. Specifically:
The chancellor also gave guests insights about forthcoming government spending cuts during the event… [and] warned those present of austerity-style budget cuts to come. A source said: “He wanted to give an unadulterated message of ‘growth, growth, growth’, and that’s why he didn’t talk about savings, because otherwise the [news] agenda would have been all about savings — ‘where will you cut? What will you cut? Blah blah blah’ — they’re fully aware they have to make savings.”
In short Kwarteng divulged that in his later economic announcements he plans to make harsh cuts in government spending in order to fund the generous payouts announced to his former City friends and colleagues… and present political donors.
What a massive tip to anyone betting on Britain’s economic health and stability over the coming months!
How can the offer of such privileged information over an incomplete financial package to donors well equipped to benefit not raise concerns about misconduct?
Labour’s call for an investigation has become almost as strong as if there was evidence of a direct disclosure in advance of the speech itself. Which, it turns out, is exactly what may very well have also happened.
Over the weekend, Kwarteng’s spokesmen conceded in response to questions that the then chancellor-to-be did indeed enjoy a discreet private lunch with his same former employer, Mr Odey, during the closing days of the leadership campaign.
This was a time where there was an inevitability hanging over the outcome which was to be a victory for Liz Truss, who in turn had made clear that Kwarteng would be her chancellor. Under which circumstances such a meeting with a City crony in advance of his planned budgetary announcements can at best be described as ill-advised and open to perceptions of conflict.
Of course, the speculator was already well-equipped to make an ‘educated guess’ as to Kwarteng’s mind, having been aligned to him for so many years. Moreover, whilst the majority of Conservative voters may well have understood the so-called ‘Trussonomics‘ tax-slashing, ‘pie-growing’ leadership election pitch to have been largely rhetoric, insiders knew better.
Former Brexit guru Dominic Cummings had Tweeted back in June that Truss is “about as close to properly crackers as anybody I’ve met in parliament”.
Odey was also close enough to make that judgement and to be aware the PM and her chosen chancellor were supremely confident in their adherence to right-wing think tank economics and dismissive of more experienced heads. Together with a clique of ideological colleagues Truss and Kwarteng had laid out their radical ideas for taking the burdens off the rich in order to benefit the rest of society in a policy book ‘Britannia Unchained“.
By the time Truss and Kwarteng had formed a Cabinet comprised only of those who agreed with them and had sacked the long-standing head of the Treasury within hours of taking office, an astute gambler such as Odey could well put forward a convincing case that he had judged his former protege would carry through his ‘courageous’ convictions, despite the dreadful conditions of the battered global markets and Britain’s Bexit-weakened status.
Even so, as he perused whether to further bet against government bonds (an activity he has described as the “gifts that keeps on giving”) a lunch such as the one now admitted to would have been invaluable to gauge his protege’s state of mind and level of resolve.
It ought not to have taken place in advance of Kwarteng’s planned big announcement, anymore than the triumphant cocktail bash for donors after with further announcements still to make.
As if such ‘budget leaks’ had not tested the thin line between insight and insider information beyond its limits, the parallel scandal of corporate lobbyist infiltration – as originally broken by Sarawak Report – has likewise escalated over past days and hours.
PR guru cum election strategist cum policy advisor, Mark Fullbrook, has been duly appointed as Truss’s chief of staff despite having been interviewed by the FBI over hundreds of thousands of dollars of election work he performed for an illegal foreign donor to a campaign in the United States.
It made him damaged goods on arrival after running her campaign. However, the strategist, who had left his original lobbying company CT Group (the advisors to Boris Johnson) just in April, stated he had done “nothing wrong”. Moreover, he claimed that his short-lived company vehicle, Fullbrook Associates, had been closed down.
However, within days it emerged that in fact Fullbrook Associates was still functioning as the vehicle from which Fullbrook was being ‘seconded’ for his Downing Street role, enabling him to be paid as self-employed. This was a taxation advantage, enhanced by the Kwarteng budget.
Fullbrook responded he would ‘dispel any misconceptions’ by altering his status to that of a direct employee at Downing Street. This, amidst further reports that part of his job deal with Truss had been a guarantee that his ‘disbanded’ company would receive the lucrative contract to run the next Conservative election campaign.
Then, on Sunday, it emerged, again through the Sunday Times that two other Fullbrook associates were also being paid through his ‘defunct’ company to advise the new prime minister alongside the civil service. These include Alice Robinson, who is none other than the wife of the new party chairman, Jake Berry MP – the man who’d presided over Kwarteng’s celebratory mini-budget bash for city donors.
There is a far deeper thread that runs through such trends. It is the pattern by which super-wealthy special interests have wormed their way into the economic and political capture of the current ruling party in the UK through its system of donations and support.
A former Lib Dem, Liz Truss now has a head stuffed full with policies devised by a string of ‘right wing think tank’ operations (the ‘5 Tufton Street’ collective) whose arguments reflect the evident self-interests of their shadowy network of billionaire donors and major corporates – they argue society will be better off if industries are de-regulated, higher tax-rates removed and the rich are allowed to get richer.
Truss has absorbed and platformed on their theories (Britannia Unchained) and leant on their support – her new Downing Street team is also packed with 5 Tufton Street advisors.
The same special interests have poured their funding into the likes of CT Group, the political and commercial PR operators who have acted as the Conservative party’s election strategists for years (they claimed they did the job for Boris Johnson for free) whilst at the same time keeping their other clients secret.
CT Group personnel have routinely followed their political proteges into government service, formally severing previous ties with industry clients and foreign governments in the process. Before only too often returning to their PR/lobbying roots.
Predictable conflicts have emerged from such a system. Just last July Sarawak Report exposed how CT Group were commissioned to assist Johnson with a plan to pack the House of Lords with tame appointees. This was not only to push through legislation that had failed on Brexit, as it turned out, but to aide CT Groups private corporate sponsors in the tobacco industry.
Under the rules established by this government, strategists cum Downing Street advisors have no obligation to declare their former corporate clients. However, it is already reported that during its short period of operation Fullbrook Associates represented the unrecognised ‘Libyan Parliament’, which is trying to destabilise the UN recognised government in that country, and a company linked to a religious sect which gained a £680 million PPE contract during the pandemic.
If one wished to define corporate capture of a governing political party, the new prime minister Liz Truss and her beleaguered chancellor paint a very convincing example of a duo bound both hand and foot, with their minds in obedient tow.
The latest Conservative crony news coming through on the party’s conference weekend is that the co-owner and business partner of Business Secretary, Jacob Rees-Mogg, at the multi-billion pound Somerset Asset Management, Dominic Johnson (a major Tory donor) has just been appointed by Truss as a minister in the Cabinet Office and the Department for International Trade – despite being unelected.
The hard Brexit politicians (Johnson is a former Conservative vice treasurer) are understood to have also made a packet on the post-Brexit pound having opened a fund in Ireland shortly before the referendum he supported.
Just last month it emerged they had cannily put their business up for sale … just in advance of the KamiKwazi budget.