Kwasi Kwarteng has been sacked as chancellor three weeks after his mini-budget unleashed chaos on the economy.
He was appointed to the role by Liz Truss only 38 days ago, making him the second-shortest serving chancellor after Iain Macleod, who died a month after being handed the job by Edward Heath.
Mr Kwarteng’s downfall was set in motion by the mini-budget on 23 September, in which he announced £45bn in unfunded tax cuts.
The mini-budget pushed the pound to a record low against the dollar, sent the cost of government borrowing and mortgage rates up and led to an unprecedented intervention by the Bank of England.
Chris Philp, who was heavily involved in plans for the mini-budget, has also lost his job as chief secretary to the Treasury but has been moved to the Cabinet Office as paymaster general.
In Mr Kwarteng’s letter to Ms Truss accepting he had been sacked, he said: “You have asked me to stand aside as your chancellor. I have accepted.”
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He said he accepted the job “in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices”.
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Moment Kwarteng sacking announced
But he said the PM’s “vision of optimism, growth and change was right” and “following the status quo was simply not an option”.
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He finished his letter by saying they have been “colleagues and friends for many years” and he believes her “vision is the right one”.
“It has been an honour to serve as your first chancellor. Your success is this country’s success and I wish you well,” he wrote.
Moments later, he was seen leaving No 11 Downing Street and was driven away from the home he had only occupied for just over a month.
Ms Truss replied to his letter by saying she is “deeply sorry to lose” him from government and said “I deeply respect the decision you have taken today” – despite her sacking him.
She said they “share the same vision” for the UK and praised him for the energy price guarantee and the energy bill relief scheme, saying “thanks to your intervention, families will be able to heat their homes this winter and thousands of jobs and livelihoods will be saved”.
Ms Truss and Mr Kwarteng, who have been close friends for years, insisted that the turbulence in the UK economy was part of a global problem exacerbated by the war in Ukraine and post-pandemic recovery.
But last week, after open revolt by Tory MPs and a record surge for Labour in the polls, the prime minister announced the first major reversal of mini-budget policies when she backtracked on scrapping the 45p top rate of income tax.
Image: Kwasi Kwarteng and Liz Truss have been close friends for a long time. Pic: Liz Truss/Instagram
The second U-turn is expected to come on Friday afternoon, with the government set to raise corporation tax from 19% to 25% next April, despite promising not to do so in the mini-budget.
Less than an hour earlier, Mr Kwarteng had landed back in London after cutting short meetings with the International Monetary Fund in Washington DC.
He had been due to make a medium-term fiscal statement on 31 October.
The Conservative Party has now had four chancellors in the past three years – Mr Kwarteng, Nadhim Zahawi, Rishi Sunak and Sajid Javid.
And the next chancellor, who will be chosen by Ms Truss, will be the seventh Tory chancellor in 12 years.
While the PM’s focus will be on choosing a new chancellor, there is set to be a renewed focus on whether Ms Truss can remain in the job.
A Tory MP told Sky News: “The idea that the prime minister can just scapegoat her chancellor and move on is deluded.
“This is her vision. She signed off on every detail and she defended it.”
“Terrible”, “weird”, “peculiar” and “baffling” – some of the adjectives being levelled by observers at the Donald Trump administration’s peace plan for Ukraine.
The 28-point proposal was cooked up between Trump negotiator Steve Witkoff and Kremlin official Kirill Dmitriev without European and Ukrainian involvement.
It effectively dresses up Russian demands as a peace proposal. Demands first made by Russia at the high watermark of its invasion in 2022, before defeats forced it to retreat from much of Ukraine.
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Ukrainian support for peace plan ‘very much in doubt’
The suspicion is Mr Witkoff and Mr Dmitriev conspired together to choose this moment to put even more pressure on the Ukrainian president.
Perversely, though, it may help him.
There has been universal condemnation and outrage in Kyiv at the Witkoff-Dmitriev plan. Rivals have little choice but to rally around the wartime Ukrainian leader as he faces such unreasonable demands.
The genesis of this plan is unclear.
Was it born from Donald Trump’s overinflated belief in his peacemaking abilities? His overrated Gaza ceasefire plan attracted lavish praise from world leaders, but now seems mired in deepening difficulty.
The fear is Mr Trump’s team are finding ways to allow him to walk away from this conflict altogether, blaming Ukrainian intransigence for the failure of his diplomacy.
Mr Trump has already ended financial support for Ukraine, acting as an arms dealer instead, selling weapons to Europe to pass on to the invaded democracy.
If he were to take away military intelligence support too, Ukraine would be blind to the kind of attacks that in recent days have killed scores of civilians.
Europe and Ukraine cannot reject the plan entirely and risk alienating Mr Trump.
They will play for time and hope against all the evidence he can still be persuaded to desert the Kremlin and put pressure on Vladimir Putin to end the war, rather than force Ukraine to surrender instead.
This is the first time the G20 summit is being hosted on African soil.
Heads of state from 15 countries across Europe, Asia and South America are expected to convene in South Africa’s economic capital, Johannesburg, under the banner of “solidarity, equality and sustainability.”
The summit is facing challenges from the Oval Office as US President Donald Trump boycotts the event, where the G20 leadership is meant to be handed over to him by South African President Cyril Ramaphosa.
The US has also warned South Africa against issuing a joint declaration at the end of the summit. The challenges to South Africa’s G20debut are also domestic.
Image: Trump had a contentious meeting with Cyril Ramaphosa in the Oval Office earlier this year. File pic: AP
Nationwide civic disobedience has been planned by women’s rights charities, nationalist groups and trade unions – all using this moment to draw the government’s attention to critical issues it has failed to address around femicide, immigration and high unemployment.
But a key symbolic threat to the credibility of an African G20 summit themed around inclusivity is the continued exclusion and marginalisation of its oldest communities.
“There is a disingenuous thread that runs right through many of these gatherings, and the G20 is no different”, Khoisan Chief Zenzile tells us in front of the First Nations Heritage Centre in Cape Town, “from any of them”.
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“I am very concerned that the many marginalised sections of society – youth, indigenous people, are not inside the front and centre of this agenda,” he added.
Image: Khoisan Chief Zenzile says land developments on indigenous land are the ‘most ridiculous notion’
As we speak, the sounds of construction echo around us. We are standing in a curated indigenous garden as South Africa’s Amazon headquarters is being built nearby.
After years of being sidelined by the government in a deal that centres around construction on sacred Khoisan land, Chief Zenzile said he negotiated directly with the developers to build the heritage centre and sanctuary as a trade-off while retaining permanent ownership of the land.
“There are many people who like to fetishise indigenous people who want to relegate us to an anthropoid state, as if that is the only place we can, as if we don’t have the tools to navigate the modern world,” he says when I ask about modern buildings towering over the sacred land.
“That is the most ridiculous notion – that the entire world must progress and we must be relegated to a state over which we have no agency.”
An hour and a half from Cape Town’s centre, Khoi-San communities have seized 2,000 hectares of land that they say historically belongs to them.
Knoflokskraal is a state where they exercise full agency – filling in the infrastructural gaps around water and electricity supply that the provincial government will not offer to residents it categorises as “squatters”.
“We are – exactly today – here for five years now,” Dawid De Wee, president of the Khoi Aboriginal Party, tells us as he gives us a tour of the settlement. “There are more or less around 4,000 of us.
“The calling from our ancestral graves sent us down here, so we had an urge to get our own identity and get back to our roots, and that was the driving motive behind everything we are here now to take back our ancestral grounds.”
Image: ‘We are here now to take back our ancestral grounds,’ Dawid De Wee says
Dawid says they have plans to expand to reclaim more swathes of land stolen from them by European settlers in the 1600s across the Cape Colony.
Land reform is a contentious issue in post-Apartheid South Africa, with a white minority still owning a majority of the land.
Indigenous land is even further down the agenda of reparations, and South Africa’s oldest communities continue to suffer from historic dispossession and marginalisation.
For many Khoi-San leaders, G20 represents the ongoing exclusion from a modern South African state.
They have not been invited to officially participate in events where “solidarity, equality and sustainability,” are being discussed without reference to their age-old knowledge.
Instead, we meet Khoi-San Queen Eloise at a gathering of tribal leaders from around the world on the most southwestern tip of Africa in Cape Point called the World Tribal Alliance.
Image: Khoi-San Queen Eloise tells Sky that the G20 ‘is a politically-based gathering’
“In order for us to heal, Mother Nature and Mother Earth is calling us, calling our kinship, to come together – especially as indigenous people because with indigenous people we are still connected to our lands, to our intellectual property we are connected to who we are,” Queen Eloise tells us.
“G20 is a politically-based gathering – they are coming together to determine the future of people politically.
“The difference is that we will seek what Mother Earth wants from us and not what we want to do with technology or all those things politically, but the depth of where we are supposed to go.”
A fierce warning from Britain’s defence secretary to Vladimir Putin to turn his spy ship away from UK waters or face the consequences was a very public attempt to deter the threat.
But unless John Healey backs his rhetoric up with a far more urgent push to rearm – and to rebuild wider national resilience – he risks his words ringing as hollow as his military.
The defence secretary on Wednesday repeated government plans to increase defence spending and work with NATO allies to bolster European security.
Image: Russian Ship Yantar transiting through the English Channel.
File pic: MOD
Instead of focusing purely on the threat, he also stressed how plans to buy weapons and build arms factories will create jobs and economic growth.
In a sign of the government’s priorities, job creation is typically the top line of any Ministry of Defence press release about its latest investment in missiles, drones and warships rather than why the equipment is vital to defend the nation.
I doubt expanding employment opportunities was the motivating factor in the 1930s when the UK converted car factories into Spitfire production lines to prepare for war with Nazi Germany.
Yet communicating to the public what war readiness really means must surely be just as important today.
Image: Russia’s President Vladimir Putin. Pic: Reuters
Mr Healey also chose this moment of national peril to attempt to score political points by criticising the previous Conservative government for hollowing out the armed forces – when the military was left in a similarly underfunded state during the last Labour government.
A report by a group of MPs, released on the same day as Mr Healey rattled his sabre at Russia, underlined the scale of the challenge the UK faces.
Image: HMS Somerset flanking Russian ship Yantar near UK waters. on January 22, 2025.
File pic: Royal Navy/PA
It accused the government of lacking a national plan to defend itself from attack.
The Defence Select Committee also warned that Mr Healey, Sir Keir Starmer and the rest of the cabinet are moving at a “glacial” pace to fix the problem and are failing to launch a “national conversation on defence and security” – something the prime minister had promised last year.
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The report backed up the findings of a wargame podcast by Sky News and Tortoise that simulated what might happen if Russia launched waves of missile strikes against the UK.
The series showed how successive defence cuts since the end of the Cold War means the army, navy and air force are woefully equipped to defend the home front.
But credible national defences also require the wider country to be prepared for war.
A set of plans setting out what must happen in the transition from peace to war was quietly shelved at the start of this century, so there no longer exists a rehearsed and resourced system to ensure local authorities, businesses and the wider population know what to do.
Image: John Healey.
Pic: PA
Mr Healey revealed that the Russian spy ship had directed a laser light presumably to dazzle pilots of a Royal Air Force reconnaissance aircraft that was tracking it.
“That Russian action is deeply dangerous,” he said.
“So, my message to Russia and to Putin, is this: We see you. We know what you are doing. And if Yantar travels south this week, we are ready.”
He did not spell out what this might mean but it could include attempts to block the Russian vessel’s passage, or even fire warning shots to force it to retreat.
Image: The Russian ship Yantar is docked in Buenos Aires in 2017
Pic: David Fernandez/EPA-EFE/Shutterstock
However, any direct engagement could trigger a retaliation from Moscow.
For now, the Russian ship – fitted with spying equipment to monitor critical national infrastructure such as communications cables on the seabed – has moved away from the UK coast. It was at its closest between 5 and 11 November.
The military is still tracking its movements closely in case the ship returns.