UK PM Truss’s leadership campaign partly funded by donors who stood to benefit from tax cuts

By CNN

Published October 6, 2022 6:21 AM

By Nina dos Santos, CNN

Almost half of the money raised by British Prime Minister Liz Truss to fund her Conservative Party leadership campaign came from wealthy donors, according to official donation records published by Parliament on Wednesday.

Truss raised nearly £432,549 ($489,472) thanks to donations largely from the business community. More than £230,000 (roughly $290,000) came from owners of hedge funds and bankers — people who stood to benefit the most from a controversial budget Truss and Finance Minister Kwasi Kwarteng had proposed.

Among those who had donated large sums were Natasha Barnaba, a hedge fund founder who gave the Truss campaign £100,000 ($112,000). Investment banker Howard Shore gave £50,000 ($56,000).

The donations to Truss’s campaign raise questions about the new government’s close relationship to niche business interests. UK media reports suggested Kwarteng had enjoyed multiple meetings with financiers — including a hedge fund boss he once worked for — before and after he unveiled his mini-budget last month.

CNN has reached out to Downing St for comment.

Truss and Kwarteng’s proposal contained billions of dollars of tax cuts that were meant to incentivize businesses to invest and help ordinary Britons with their taxes, Truss told CNN’s Jake Tapper last month. The budget would have also cut the top rate of tax for high earners.

The plan that was met with furor as it came in the midst of an acute cost-of-living crunch, and the government’s initial commitment to move forward with it pummeled the pound, caused pension funds to nearly collapse and sent mortgages soaring. A degree of order was only restored by an emergency intervention last Wednesday by the Bank of England, which said it would buy UK government bonds worth £65 billion ($73 billion).

Truss’s government abruptly abandoned the proposal to cut the top rate of income tax on Monday, calling it a “distraction.”

The hedge fund manager whom Kwarteng met dismissed suggestions he profited from any advance information about the budget, calling them “nonsense.” He did admit that he still made hundreds of millions betting on sterling during its rout and the more recent rebound.

Truss addressed the chaos of the past few days in her debut party conference speech as Conservative leader in Birmingham on Wednesday.

Truss defended her rapid economic policies that led to the pound tanking by saying that she wanted to get on with her agenda of growing the economy from her first day in Downing Street.

She acknowledged her U-turn on cutting the top tax rate, but doubled down on the rest of her libertarian agenda. She told delegates that her government “will keep an iron grip on the nation’s finances,” and that she believes “in sound money and a lean state.”

“Cutting taxes helps us face this global economic crisis, putting up a sign that Britain is open for business,” Truss said.

CNN’s Luke McGee and Joshua Berlinger contributed to this report