Liz Truss and Kwasi Kwarteng are in “lockstep” over scrapping the top rate of income tax, a spokesperson for the Chancellor has said.
Ms Truss was accused of throwing the chancellor “under the bus” after she said the move to abolish the 45p rate was his idea and had not been discussed in Cabinet.
But now a spokesperson for the chancellor has sought to clarify matters, saying: "As the PM said this morning, the 45p rate raises very little and makes our tax system more complicated.
"While the chancellor obviously makes all tax decisions, the prime minister and Kwasi are in lockstep on this."
The Prime Minister also insisted she has a “very clear plan” for the economy as she faced questions from Laura Kuenssberg on Sunday morning.
Also present on the programme was former Cabinet minister Michael Gove who remained coy over his support for the new tax plans, saying he was “profoundly” concerned about Ms Truss’s vast tax cuts
Later he was asked about his support as he arrived at the conference centre but refused to be drawn, saying “we’ll wait to see what’s brought forward”.
Truss tells Tory rebels ‘there is no option but to change’
07:48 , Sami Quadri
Liz Truss has warned Tory rebels urging her to abandon her controversial tax cutting agenda that she will not change course, telling them “the status quo isn’t an option”.
The Prime Minister rejected calls to sack Chancellor Kwasi Kwarteng after the chaos caused by his mini-budget, insisting he was doing an “excellent job” despite the turmoil on the financial markets caused by his mini-budget.
In an interview with The Sunday Telegraph, she said she was sticking to her guns, and that tax cuts were essential to get the economy growing again.
“Change is always something that people might find worrying. But what I’m fundamentally saying is we do have to change, and the status quo isn’t an option,” she said.
“We cannot continue on the current trajectory of managed decline… We must take a new direction.”
Latest poll puts Labour 19 points ahead of Tories
08:34 , Bill Mcloughlin
A poll by Opinium has put Labour 19-points ahead of the Tories – with support for Sir Keir’s party up seven points on 46 per cent while the Conservatives are down seven on 27 per cent.
Opinium’s latest survey found more than half the public – 55 per cent – disapprove of the job Ms Truss is doing against just 18 per cent who approve – a net rating of minus 37.
Support forKwasi Kwarteng showed a similar drop, with 55 per cent disapproving against 15 per cent approving – a net rating of minus 40 – down 30 points on a week ago.
Read our story here.
Truss praises ‘vitally important’ energy bill support package
08:45 , Sami Quadri
Prime Minister Liz Truss has said it was “vitally important” that her party freezed energy bills at an average of £2,500 a year for two years.
Speaking to Laura Kueunnsberg on BBC One, she said: “This is the bill for an average family but what we are preventing is those extraordinary bills that people were expecting. It is a big energy package and it’s the biggest part of our mini budget.
“It was important that the government stepped into deal with this. And we’re not just dealing with it as the Labour Party have suggested for six months – we’re dealing with it for two years to make sure people have that reassurance.”
Liz Truss admits she could have ‘laid the ground’ better about mini-budget plans
08:47 , Sami Quadri
Liz Truss acknowledged she could have “laid the ground” better about the plans contained in the Government’s mini-budget which triggered market turmoil.
She told the BBC’s Sunday with Laura Kuenssberg: “I’m afraid there is an issue that interest rates are going up around the world and we do have to face that.”
But she added: “But I do want to say to people I understand their worries about what has happened this week.
“I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act.
“But I do accept we should have laid the ground better… I have learnt from that and I will make sure that in future we do a better job of laying the ground.”
Truss says she was right to increase borrowing
08:53 , Sami Quadri
Liz Truss insisted she was right to increase borrowing this winter, making “tough decisions” in a “very difficult world”.
The Prime Minister told Sunday With Laura Kuenssberg on BBC One: “We’re not living in a perfect world, we’re living in a very difficult world where governments around the world are making tough decisions.
“And I believe it was the right decision to increase borrowing this winter.”
She said the UK has the “second lowest borrowing in the G7”, borrowing less than France, the US, Canada and Japan, adding: “And I think it’s important people understand that.”
“Of course we need to bring down borrowing as a proportion of GDP over the medium-term, and I have a plan to do that. But what would have been wrong is for us not to have acted,” she said.
Truss says she has ‘very clear plan’ on economy
08:55 , Sami Quadri
Prime Minister Liz Truss told the BBC: “I understand how worried people are and I understand that people are struggling and it is very, very difficult times.
“This is a global problem. You have got (Vladimir) Putin’s war in Ukraine, the aftermath of Covid.
“What is happening around the world is that interest rates are rising, so the Federal Reserve has pushed its interest rates up to 4%.”
Pressed on the response to the mini-budget in the UK, she said: “I want to reassure people that we do have a very clear plan – first of all about how we are going to get through this winter with our energy plan but also how we are dealing with the issue of a slowing economy.”
She said the Government had to act to reverse the national insurance rise and “on other areas of taxation” to make sure the economy did not slow down.
Truss refuses to rule out cuts to public services
09:01 , Sami Quadri
Liz Truss did not rule out cuts to public services, saying they will remain “excellent”.
The Prime Minister told the BBC: “What I’m going to do is make sure we get value for money for the taxpayer.
“But I’m very, very committed to making sure we’ve got excellent frontline public services.
“And I’m not going to go into what the Chancellor will announce in his medium-term fiscal plan. He’s going to announce that very shortly, it will come together with an OBR forecast.”
Pressed on whether her refusal to rule out cuts suggested that she will go down that path, she said: “No it doesn’t, because I can’t exactly set out what is going to be in this plan. What I can promise is we’re going to reduce debt as a proportion of GDP.”
Liz Truss: I stand by the income tax cut
09:03 , Bill Mcloughlin
Truss said scrapping the top rate of income tax for the nation’s highest earners was a decision made by Kwasi Kwarteng rather than being agreed by the wider Cabinet.
Asked if she discussed the controversial move with the whole Cabinet, the Prime Minister told Sunday With Laura Kuenssberg on BBC One: “No, no we didn’t. It was a decision the Chancellor made.”
Liz Truss says pensions will rise in line with inflation
09:11 , Sami Quadri
Liz Truss said she would ensure pensions rise in line with inflation, but refused to make the same commitment for benefits and government departmental spending.
Not ruling out departmental real-term cuts, the Prime Minister said: “I’m not going to write future budgets on your show.
“I believe in outcomes rather than inputs, so I believe in what people see and what people feel.”
Not ruling out rowing back on Boris Johnson’s promise to raise benefit payments in line with inflation, she said: “This is something the Department of Work and Pensions Secretary is looking at at the moment. She will make a determination on that and we will announce that this morning.”
But she was clear pensions would rise in line with inflation, saying: “I’ve committed to the triple lock. Yes.”
MPs who vote against tax cuts will lose the whip
09:11 , Sami Quadri
Conservative MPs who vote against the Government’s plan for tax cuts will lose the whip, the party chairman has said.
It has been reported that some Tory MPs are preparing to vote with Labour to prevent measures announced by the Chancellor on September 23, including abolishing the top rate of income tax.
Asked on Sky’s Sophy Ridge on Sunday whether this would result in them losing the party whip, Conservative chairman Jake Berry said: “Yes.”
He also urged Tory MPs to unite behind Liz Truss and her programme, saying she had “a mandate both from colleagues and our membership”.
He said: “I’m sure that if we do that it will lead ultimately to long-term electoral success.”
Liz Truss defends Chancellor’s drinks do reception
09:14 , Bill Mcloughlin
Liz Truss said Kwasi Kwarteng “meets business people all the time” when asked about the Chancellor attending a private champagne reception with hedge fund managers who stood to gain from a collapse in sterling following his mini-budget.
The Prime Minister told the BBC’s Sunday with Laura Kuenssberg programme: “The Chancellor meets business people all the time, that’s his job.
“I do not manage Kwasi Kwarteng’s diary, believe me.”
Pressed on whether it would have been better if he had not gone as people are struggling with the cost-of-living crisis, Ms Truss said: “I get up every morning as Prime Minister thinking how can we make our country more successful, how can we reassure people, how can we help people get through these very difficult times and we do face difficult times…
“And that’s what I’m focused on. That’s what the Chancellor is focused on and that is what the whole Cabinet is focused on.”
Keir Starmer accuses Truss of being ‘intoxicated by dogma'
09:33 , Sami Quadri
This is a Tory crisis: made in Downing Street, paid for by working people.
Mortgages, pensions and family finances are not casino chips for a government intoxicated by dogma. https://t.co/AhxCCNcPsd
— Keir Starmer (@Keir_Starmer) October 2, 2022
09:50 , Sami Quadri
Shadow chancellor Rachel Reeves has said the Prime Minister failed to understand the “anxiety and fear” felt by people facing huge increases in their mortgage repayments as a result of the Government’s mini-budget.
Ms Reeves dismissed claims that the growth plan would deliver the annual 2.5% trend rate of growth Chancellor Kwasi Kwarteng is aiming for.
“The Prime Minister just doesn’t seem to understand the anxiety and fear. This is a crisis made in Downing Street but it is ordinary working people who are paying the price,” she told the BBC’s Sunday With Laura Kuenssberg programme.
“The idea that trickle-down economics is somehow going to deliver the 2.5% growth we all want to see is for the birds.
“The Prime Minister and the Chancellor are doing some sort of mad experiment with the UK economy and trickle down economics. It has failed before and it will fail again.”
10:39 , Sami Quadri
Conservative MP Mel Stride, the chairman of the Commons Treasury Committee, said Liz Truss’s refusal to bring forward the publication of the Office for Budget Responsibility’s forecasts could mean interest rates will have to rise even higher.
Mr Stride said it should be possible for the OBR to release its report before the next meeting of the Bank of England’s Monetary Policy Committee (MPC), which sets rates, on November 3.
“If it has a satisfactory OBR report before that meeting on November 3, I would imagine and expect that the interest rate rise will probably not be as high as it otherwise would be,” he told Sky News’s Sophy Ridge On Sunday programme.
“That OBR report, the fiscal targets, would have reassured the markets, there would be less concern about the inflationary impacts of the Government’s policy and therefore the MPC would be putting interest rates up by potentially a little bit less.”
Michael Gove could vote against Truss’s ‘profoundly concerning’ tax plans
10:45 , Sami Quadri
Former Cabinet minister Michael Gove said he is “profoundly” concerned about Liz Truss’s vast tax cuts as he suggested he could vote against the plans.
Gove, who is influential in the Tory party, said her plans were “not Conservative”.
Mr Gove welcomed the Prime Minister acknowledging she had made mistakes but said she has an “inadequate realisation” about the scale of the problem.
He told the Sunday With Laura Kuenssberg show he is “profoundly” concerned that Chancellor Kwasi Kwarteng is paying for £45 billion of tax cuts through increased borrowing.
Mr Gove said cutting the 45% income tax rate for the highest earners was a “display of the wrong values”.
He even suggested he could vote against the plans in the House of Commons, as Conservative critics eye a possible rebellion.
“I don’t believe it’s right,” he said of the budget when pressed on the BBC One programme.
11:16 , Sami Quadri
Senior Conservative MP Mel Stride has said Liz Truss needs to quickly regain the confidence of the public and of the markets if she is to lead the party into the next general election.
Mr Stride, the chairman of the Commons Treasury Committee, said the party will be in “hugely difficult waters” if that does not happen.
Asked on Sky News’s Sophy Ridge On Sunday programme about Ms Truss’s prospects of leading the party into the election, he said: “For that to happen I think it is fair to say that we have to fairly quickly move to a place where the polls are beginning to turn around, where the markets are feeling the Government is behaving fiscally responsibly and they are gaining in confidence, the pressure on the pound is being released somewhat and bond yields are not soaring off.”
Mr Stride criticised Chancellor Kwasi Kwarteng’s mini-budget, saying: “I do think there are some very difficult optics, at the very least, around having the 45p rate (of tax) abolished and then seeking reductions, for example, in the welfare.”
12:11 , Sami Quadri
Tara Sherfield, a Conservative councillor on Cornwall County Council, said she was feeling “optimistic” as the party conference began.
The founder of Conservative Friends of America told the PA News agency: “I completely understand the frustration and the panic people are going through. It is not to be ignored.
“I think with the mini-budget it is a budget that should have come out six months ago. Six months too late in my opinion.”
The 26-year-old said the party needed to “at least give it a chance and see if it can work”, adding: “I am a big believer in trickle-down economics but at the same time you can’t create a rich-poor divide either, which I think is what people are starting to think about with the energy crisis that is about to happen.”
Ms Sherfield said she felt “pretty confident” about Liz Truss’s leadership but added that Penny Mordaunt was her first choice for leader.
She added: “I think she has got two years to really turn around the last few years with all the setbacks we have had from austerity, to Covid, and of course Brexit as well. So I hope that she uses these two years wisely.”
Jacob Rees-Mogg booed in Birmingham
13:13 , Bill Mcloughlin
Jacob Rees-Mogg was booed loudly by hundreds of protesters in Birmingham, according to reports.
The Business Secretary was escorted by several police officers as he walked across Victoria Square, where demonstrators had gathered to vent their anger at the Government as the Tory conference gets under way in the city.
The crowd pursued him, jeering and booing, with some shouting "Tory scum".
Demonstrators furious at Liz Truss's economic plan are carrying signs reading "unelected, unaccountable, unhinged" and "wages up, bills down, Tories out".
Tory member hits out at Michael Goves after Liz Truss criticism
13:16 , Bill Mcloughlin
Michael Gove has been elected as a Conservative, and he should support the party, a Conservative Party member has said.
Janet Palmer from North West Hampshire, a Tory member for around 50 years, told the PA News agency: "Michael Gove was elected as a Conservative, and he should support the party. I've got no time for these people..."
On Mr Gove's position, that it was wrong to pay for tax cuts out of borrowing, she said: "What did Rishi Sunak do during the pandemic?
"He borrowed huge amounts. Without any checks. And we will never get it back. He gave it away."
13:38 , Sami Quadri
Protesters in Birmingham have expressed their anger over Liz Truss’s tax cuts for the richest.
Jane Elledge, 53, an IT trainer from Bromsgrove, told the PA News agency: “Enough is enough really. We’ve had Brexit, we’ve had falling standards, we’ve had people having to work two jobs, people starving, people with no heating and just the kind of final straw is the announcement of the richest people getting a tax cut.
“Trickle-down economics doesn’t work. We get nothing, nothing for the working people.
“It’s got to stop. Tories out.”
Mick, who did not want to give his surname, described the Government’s mini-budget as “disastrous for normal people”.
The 58-year-old from Birmingham, who carried a “Tory lies kill” placard, told PA: “It’s just the start though. The next step is to balance the books again, they’re going to cut public services even further. They disgust me”.
14:08 , Sami Quadri
Tory chairman Jake Berry suggested the next general election could be around April 2024.
He told a recording of the Chopper’s Politics Live podcast for the Telegraph: “In the normal course of the electoral calendar it’s 18 months or so away.”
Rees-Mogg says protests are ‘fact of democracy’
14:35 , Sami Quadri
Jacob Rees-Mogg has played down the protests taking place outside the Conservative Party Conference in Birmingham as a “fact of democracy”.
Speaking to Sky News while being escorted through the crowd by police officers, Mr Rees-Mogg said: “There have been protests at Tory conferences since time immemorial, it’s nothing new.
“It’s a fact of democracy. They’re shouting but it’s perfectly peaceful.
“And the right to peaceful expression of your view is fundamental to our constitution.”
‘Highly unlikely’ Putin will use nukes, says Ben Wallace
15:03 , Sami Quadri
Defence Secretary Ben Wallace said he thought it “highly unlikely” that Vladimir Putin would use nuclear weapons in the Ukraine conflict.
He told a Tory conference fringe event that while the use of tactical nuclear weapons was in the Russian military doctrine “we think it is highly unlikely he will do it”.
Truss’s personal phone number ‘for sale on the internet’
15:25 , Sami Quadri
The personal mobile phone numbers of Liz Truss and 25 other Cabinet ministers are for sale over the internet after being stolen by hackers, it has been reported.
The Mail on Sunday said the stolen numbers appeared on a US website which charges just £6.49 for a week’s access to its searchable database.
Among those listed, the paper said, were Chancellor Kwasi Kwarteng, Defence Secretary Ben Wallace, Foreign Secretary James Cleverly and Home Secretary Suella Braverman.
The numbers of seven members of the Labour shadow cabinet, including party leader Sir Keir Starmer, were also said to be available.
Pictured: Protesters outside the Conservative Party annual conference in Birmingham
16:02 , Sami Quadri
16:09 , Sami Quadri
Conservative Party members clapped as members of the Cabinet took their seats for the opening of the party conference.
Members stood and cheered as Prime Minister Liz Truss entered hall one of Birmingham’s International Convention Centre (ICC).
Pictured: Chancellor Kwasi Kwarteng and Prime Minister Liz Truss take their seats at the Conservative Party annual conference
16:12 , Sami Quadri
16:19 , Sami Quadri
President of the National Conservative Convention Fleur Butler opened proceedings as she welcomed members.
Leader of the House of Commons Penny Mordaunt paid tribute to the late Queen Elizabeth.
She said: “She saw us through change and challenge, constitutional crisis, conflict, Covid.
“And every time we battled, we had Her Majesty alongside us, advising us, guiding us, unifying us all.”
Tories will lose election if painted as ‘party of the rich'
17:00 , Miriam Burrell
Former deputy prime minister warned that the Tories will lose the next general election if “we end up painting ourselves as the party of the rich”.
He told a drinks reception for the Tory Reform Group and One Nation Caucus attended by only a few MPs: “Very clearly there are conversations that need to be had over the direction of Government as we move between now and the general election.
“Apart from the fact I think it’s morally right, I also think it’s a political no-brainer that if we end up painting ourselves as the party of the rich and the party of the already successful then, funnily enough, most people won’t vote for us and we lose,” he said.
Anger as Rees-Mogg’s former business partner made minister
17:12 , Miriam Burrell
Liz Truss is under fire after appointing the former business partner of Business Secretary Jacob Rees-Mogg as a government minister.
Dominic Johnson has been made a middle-ranking minister of state jointly in the Department for International Trade and the Cabinet Office. He will be made a life peer and sit in the House of Lords.
Mr Johnson and Mr Rees-Mogg founded Somerset Capital Management, described as a seven billion dollar global emerging markets specialist investment company, in 2007.
Watch: Jacob Rees-Mogg booed by protesters
17:18 , Miriam Burrell
Pictured: Tory party conference kicks off
17:31 , Miriam Burrell
Boris Johnson new president of Tory Friends of Ukraine group
17:33 , Miriam Burrell
Boris Johnson will be the new president of the Conservative Friends of Ukraine group.
The current president, former minister John Whittingdale, announced his successor at a Tory conference fringe event, saying Mr Johnson is “in many ways the obvious and most deserving person to lead this organisation because he was the first person, not just in this country but across the western world, to so strongly come out in support of the Ukrainian people”.
The former prime minister has stayed away from the party’s annual gathering in Birmingham.
Mr Whittingdale said: “Boris is sorry that he can’t be with us today, but he has sent his total support for what we all believe and our support continuing for Ukraine.”
Gove: Borrowing for tax cuts ‘not Conservative'
18:05 , Miriam Burrell
Tory former Cabinet minister Michael Gove said Liz Truss’s plans to pay for tax cuts with borrowing were “not Conservative”.
He told Sunday With Laura Kuenssberg show that cutting the 45 per cent income tax rate for the highest earners was a “display of the wrong values” and called for Ms Truss to U-turn.
The MP even suggested he could vote against the plans in the House of Commons. “I don’t believe it’s right,” he said.
Defence Secretary: Putin ‘highly unlikely’ to use nuclear weapons
18:25 , Miriam Burrell
Vladimir Putin is “highly unlikely” to use nuclear weapons in the Ukraine conflict but he is not acting in a “rational” way, Defence Secretary Ben Wallace has said.
The Russian president has threatened to use “all the means at our disposal” if his country is threatened.
But Mr Wallace told a fringe meeting at the Tory party conference that although the use of nuclear weapons was in the Russian military doctrine, it would be unacceptable to Moscow’s allies India and China.
He said Mr Putin “was given a very clear sense what is acceptable and unacceptable” in meetings with the Indian and Chinese leaderships.
But Mr Wallace added that the Russian leader’s actions, from the nerve agent attack in Salisbury to the invasion of Ukraine, were “totally irrational”.
Tory minister surprised by ‘backbiting'
19:21 , Miriam Burrell
Tory minister Dehenna Davison said she had been surprised by the amount of “backbiting” among her fellow Conservative MPs.
The levelling up minister told a conference fringe event she had expected “more camaraderie” among her colleagues.
Asked what had surprised her most about being an MP, she said: “Call this naivety, but just the amount of backbiting among some colleagues sometimes.
“You see things about yourself leaked to the press, half of which is completely made up or fabricated, and you know that it’s come from your own side.
“I expected there to be a little bit more camaraderie than that.”
Rees-Mogg ‘wouldn’t be surprised’ if 45p tax cut raises extra revenue
19:50 , Miriam Burrell
Business Secretary Jacob Rees-Mogg said he would not be surprised if the cut to the top rate of income tax would raise extra revenue.
He told a ConservativeHome event: “Cutting the tax rate from 50p to 45p didn’t actually cost the taxpayer anything at all, it saw income come in.
“So let’s be careful about these forecasts. They are not holy writ, they are guesses at what may happen and it wouldn’t surprise me in the least that 40p raises more money for HMRC than 45p does.”
Mr Rees-Mogg also suggested the Bank of England had lagged behind the US Federal Reserve in increasing interest rates.
He said: “With interest rates, the Federal Reserve has moved faster than the Bank of England. I think that’s one of the key things that has been going on in financial markets and currency markets not just in the UK but across the world.”
Pollster predicts gloom for Torys at election
20:35 , Miriam Burrell
A pollster predicted gloom for the Conservative Party at the next general election.
Matthew Goodwin, professor of politics at the University of Kent, told a Tory conference fringe event: “My instinct is telling me it is going to get worse before it gets better, and it may not get better at all.”
Prof Goodwin said the “broader mood in British politics” did not support the Government’s tax-cutting agenda, with it being a “6% position in the country”.
He added: “It is not even fringe, it is not even on the radar, so as we go through winter and the conversation evolves into where is the money coming from, what public services are being cut, efficiency savings… that is all going to roll into a much broader discussion about austerity 2.0, whatever you want to call it – we may actually see further losses in the Conservative coalition before we see any stabilisation.”
No arrests following protests
21:29 , Miriam Burrell
West Midlands Police said there have been no arrests on the first day of the conference attended by more than 11,000 delegates.
Thousands of people supporting a variety of causes protested in the city centre and MP Jacob Rees-Mogg was confronted when he arrived.
“Officers who were in the area at the time liaising with protesters quickly helped guide him to the conference venue due to the large number of people who had gathered,” police said in a statement on Sunday.
“We are also aware of reports of an alleged assault against a second Conservative MP on Broad Street.
“The MP has since confirmed that while he was approached by protesters, he was not assaulted.”
Additional officers are carrying out high visibility patrols near the conference venue and armed officers are also out on patrol during the conference.
“To date, no one has been arrested in connection with any disorder relating to the conference, and no crimes have been reported to us,” police said.
22:35 , Miriam Burrell
That’s all for our coverage today.
Check back in tomorrow. Goodnight