“Only Labour” offers leadership needed, Reeves declares after Kwarteng sacking

Rachel Reeves has declared that “only Labour” offers the leadership needed to respond to the fallout from the mini-Budget after it was announced that Kwasi Kwarteng has been sacked as Chancellor.

Liz Truss sacked Kwarteng this afternoon amid the ongoing economic turmoil that has followed his fiscal statement last month. Former Health Secretary Jeremy Hunt has been confirmed as Kwarteng’s successor.

Responding to Kwarteng’s departure, the Shadow Chancellor said: “Changing the Chancellor doesn’t undo the damage that’s already been done. It was a crisis made in Downing Street.

“Liz Truss and the Conservatives crashed the economy, causing mortgages to skyrocket and has undermined Britain’s standing on the world stage.

“We don’t just need a change in Chancellor, we need a change in government. Only Labour offers the leadership and ideas Britain needs to secure the economy and get out of this mess.”

The Prime Minister is expected to announce a U-turn on plans to scrap a scheduled increase in corporation tax, one of the measures set out in the mini-Budget. She is due to hold a press conference later this afternoon.

According to the BBC, a group of senior Tory MPs plan to publicly urge Truss to resign next week. A source told BBC Newsnight’s political editor Nicholas Watt: “These are serious people. The PM will find it difficult to survive.”

In a letter to the Prime Minister after the announcement of his sacking, Kwarteng said: “Following the status quo was simply not an option. For too long, this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.”

He continued: “It is important now as we move forward to emphasise your government’s commitment to fiscal discipline. The medium-term fiscal plan is crucial to this end.”

“We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one,” the former Chancellor added.

The Chancellor had been due to publish the government’s medium-term fiscal plan on October 31st. The plan is expected to be used, alongside fresh forecasts for the economy and public finances from the OBR, to outline how the Conservatives will fund the tax cuts set out in the mini-Budget.

The pound crashed to its lowest level to date against the dollar, and government borrowing costs soared following the min-Budget. The Bank of England announced on Tuesday that it was taking emergency action for a third time since the Chancellor’s statement in an attempt to calm the markets.

Kwarteng left a meeting of the International Monetary Fund in Washington early to return to the UK amid speculation of the U-turn on the government’s plans for corporation tax. The Chancellor announced in the mini-Budget that plans set out by Rishi Sunak to increase the tax from 19% to 25% would be axed.

The government has already been forced to U-turn on its plans to scrap the 45% rate of income tax on earnings over £150,000.

Reeves accused Kwarteng of being in a “dangerous state of denial” over the mini-Budget on Tuesday and repeated Labour’s call for the plans set out in the statement to be reversed.

Addressing the Commons, Reeves said: “We’ve seen wild swings in the value of the pound, gilt yields up 100 basis points in a single day and the Bank of England stepping in because, in their words, of a “material risk” to UK financial stability.”

“This is a British crisis made in Downing Street. No other government is sabotaging their own country’s economic credibility as this government is,”” she added.