Tories seek to shift focus from economy after U-turn humiliation

Tories seek to shift focus from economy after U-turn humiliation

Conservatives will attempt to shift the focus away from the economy following the humiliation of two U-turns on income tax cuts for the highest earners and the date of a new fiscal plan.

Keynote speeches at the Tory conference in Birmingham on Tuesday by Home Secretary Suella Braverman and Foreign Secretary James Cleverly will aim to set out the Government’s plans on immigration and commitment to support Ukraine.

Liz Truss will be keen to get the annual gathering back on track after she and Chancellor Kwasi Kwarteng abandoned their plan to scrap the 45% rate for earnings over £150,000 in an astonishing U-turn to stave off a Tory revolt.

The Prime Minister admitted that it had not been an “easy” week but indicated she was sticking with the rest of the tax-cutting package.

She told the Express newspaper: “Express readers can rest assured: we will reward your trust.

“It has not been an easy week, but we have shown that we listen to people’s concerns and we are determined to deliver on our core plan for economic success and security.

“Our plan for growth is essential to get the British economy moving. Growth is the only way to create jobs, boost wages and fund our vital public services like the NHS.”

Conservative Party Conference 2022
Chancellor of the Exchequer Kwasi Kwarteng after delivering his speech to party members at the Tory conference (Stefan Rousseau/PA)

Writing in The Telegraph, Ms Truss added: “Abolishing the 45p top rate of tax was a tiny part of the plan and had become an unnecessary distraction.

“That is why the Chancellor and I decided to no longer proceed with it. We listened and took action.”

In his conference speech on Monday, Mr Kwarteng also conceded it had been a “tough” day as he vowed to “focus on the task in hand”.

He was accused by opposition MPs of “insulting millions of people” as he sought to shrug off the market turmoil that triggered the U-turn as a “little turbulence”.

Coming a little over a week after the tax cut was announced in the mini-budget and just a month into Ms Truss’s premiership, the U-turn was a massive blow to their authority.

In a second change of course in a bid to reassure markets and Tory rebels, the Chancellor is understood to be bringing forward his medium-term fiscal plan, alongside official forecasts from the Office for Budget Responsibility, to later this month.

Having previously insisted he would wait until November 23, Mr Kwarteng told the conference he would publish details “shortly” on how he planned to bring down public debt as a percentage of GDP over the medium term.

Despite £65 billion of Bank of England action to stave off fresh financial turmoil and the pound having plummeted over his mini-budget on September 23, Mr Kwarteng insisted the Tories will be “serious custodians of the public finances”.

But in a sign of continuing disquiet among Conservative MPs, Priti Patel is set to accuse Ms Truss and Mr Kwarteng of “spending today with no thought of tomorrow”.

“I want to see our party regain its credibility by restoring its commitment to sustainable public spending … which is affordable today, tomorrow and for the foreseeable future,” the former home secretary will tell a conference fringe event, according to The Times.

The Prime Minister and Chancellor also faced a fresh rebellion as they declined to commit to increasing benefits in line with inflation.

Failing to keep pace with rising prices would leave some of the poorest households facing a real-terms cut in their incomes.

Former Cabinet minister Michael Gove told Times Radio he would need “a lot of persuading” to stop benefits from rising in line with inflation, while former work and pensions secretary Damian Green told LBC that a freeze or cut in benefits would not get through the Commons.

On Tuesday, Ms Braverman will use her conference speech to call for the French to stop more boats crossing the English Channel and set out her intention to bring in new laws to make it easier to deport people who come to the UK illegally.

Prime Minister Liz Truss applauding Chancellor of the Exchequer Kwasi Kwarteng during the Conservative Party annual conference at the International Convention Centre in Birmingham on Monday October 3, 2022
Prime Minister Liz Truss admitted that it had not been an ‘easy’ week but indicated she was sticking with the rest of the tax-cutting package (Jacob King/PA)

The Home Secretary will promise to allow “the kind of immigration that grows our economy” but “end abuse of the rules” as she addresses activists at the Conservative Party conference.

Mr Cleverly will declare that Britain has the “strategic endurance” to see Ukraine through to victory over Russian invaders.

The Foreign Secretary will say that Ukraine has the UK’s unwavering support in its efforts to push back Vladimir Putin’s forces, saying that “we are players on the pitch” and not just “commentators”.

He will also repeat Ms Truss’s vow that the UK will never accept Russian President Vladimir Putin’s annexation of the regions of Donetsk, Luhansk, Kherson, Zaporizhzhia or Crimea.