Labour leader Sir Keir Starmer was under pressure to remove the whip from the politician over the remarks that were criticised by Angela Rayner and David Lammy as well as Tories.
In audio published online, Ms Huq can be heard discussing Mr Kwarteng’s elite school background, before adding that “you wouldn’t know he is black” when listening to him on the radio.
The comments were made at a fringe event at the Labour conference in Liverpool on Monday about the about the man who earlier this month became Britain’s first black Chancellor.
— Jake Berry MP (@JakeBerry) September 27, 2022
Labour sources told the PA news agency Ms Huq has been administratively suspended from the party, and has therefore lost the party whip.
A party spokesman added: “We obviously condemn the remarks she made, they are totally inappropriate and we would call on her to apologise and withdraw them.”
The suspension came shortly after Sir Keir finished his conference speech, which he used to argue now is a “Labour moment” for the party to provide the leadership the nation “so desperately needs”.
Deputy Labour leader Angela Rayner had told the MP for Ealing Central and Acton, in west London, to apologise and take “immediate action” over the “completely unacceptable” remarks.
In the audio, Ms Huq could be heard saying: “Superficially he is a black man.
“He went to Eton, I think, he went to a very expensive prep school, all the way through, the top schools in the country.
“If you hear him on the Today programme, you wouldn’t know he is black.”
Tory party chairman Jake Berry raised his “serious concerns” in a letter to Sir Keir, with the audio being published by the Guido Fawkes website shortly before his conference speech.
“I trust you will join me in unequivocally condemning these comments as nothing less than racist and that the Labour whip be withdrawn from Rupa Huq as a consequence,” he wrote.
Mr Berry said that Sunder Katwala, who was chairing the event for the British Future and Black Equity organisations, was forced to challenge her remarks.
According to the Tory MP, Mr Katwala said that the Chancellor’s Conservative views “doesn’t make him not black … and I think the Labour Party has to be really careful”.
Ms Rayner told BBC Politics Live: “She should apologise for those comments.
“For me those comments are completely unacceptable.
“I think Rupa needs to reflect on what she has said and she needs to take immediate action.”
If she fails to apologise, Ms Rayner said: “Well that’s a whipping matter, what they do regarding the whip. But I’m pretty certain that the whip will see that and say that’s not acceptable.
“I’m sure that Rupa will recognise that’s not acceptable, I’ve known Rupa a very long time and I don’t think those comments are appropriate.”
Shadow foreign secretary David Lammy added: “I wouldn’t have made them myself and clearly I hope Rupa apologises and retracts them, frankly.”
Asked if the Labour MP should have the whip withdrawn, he said: “I have only just heard this story to be honest, I don’t know the full circumstances so I don’t want to shoot from the hip.
“I hope she is able to stand those comments down.”
In a tweet, Mr Katwala said Labour chairwoman Anneliese Dodds was no longer at the meeting when the criticised comments were made.
Ms Huq and the Labour Party have been approached for comment.