Tory Party conference latest LIVE: Kwasi Kwarteng admits mini-budget caused market turmoil

Tory Party conference latest LIVE: Kwasi Kwarteng admits mini-budget caused market turmoil

Chancellor Kwasi Kwarteng admitted his mini-budget caused market turmoil in a speech given after an extraordinary U-turn on axing of the 45p top rate of income tax.

However speaking in Birmingham he defended the Government’s measures aimed at growing the economy.

The Chancellor told the Conservative Party conference: “I can be frank. I know the plan put forward only 10 days ago has caused a little turbulence.

“I get it. I get it. We are listening and have listened, and now I want to focus on delivering the major parts of our growth package.”

He added: “Because with energy bills skyrocketing, a painful Covid aftermath, war on our continent, a 70-year high tax burden, slowing global growth rates and glacially slow infrastructure delivery, we couldn’t simply do nothing.

“We can’t sit idly by. What Britain needs more than ever is economic growth.”

He was forced to scrap the flagship tax cut just ten days after his mini Budget after a revolt by Tory MPs led by former Cabinet minister Michael Gove.

The decision leaves Prime Minister Liz Truss and Mr Kwarteng’s reputation badly damaged as they had insisted they would press ahead with the tax cut.

Goodnight from our Tory conference live blog

Monday 3 October 2022 20:15 , Anthony France

That’s all from the Evening Standard’s reporting of the Conservative Party conference’s dramatic first day. Our teams will be back on Tuesday morning.

Kwasi Kwarteng decries “hullabaloo” about his mini-budget

Monday 3 October 2022 20:10 , Anthony France

Chancellor Kwasi Kwarteng decried the “hullabaloo” about his mini-budget as he noted the “market reactions and the excitement” that led to his U-turn on axing the top rate of income tax.

He acknowledged the “extraordinary events” of the last 10 days and recent months in a brief speech at a PolicyExchange drinks reception at the Tory party conference.

“Beyond the market reactions and the excitement, there’s a real strong body of ideas there which are all about growth,” he said.

He went on to say that despite the “hullabaloo about my statement”, business people had praised his plan for growth.

Britain’s first prototype nuclear fusion power station ‘to be built by 2040'

Monday 3 October 2022 18:29 , Anthony France

The UK’s first prototype nuclear fusion power station will be built in Nottinghamshire by 2040, the Business Secretary has announced.

Jacob Rees-Mogg told the Conservative Party conference: “Over the decades we have established ourselves as pioneers in fusion science and as a country our capabilities to surmount these obstacles is unparalleled, and I am delighted to make an announcement of a vital step in that mission.

“We will build the UK’s first prototype fusion energy plant in Nottinghamshire, replacing the West Burton coal-fired power station with a beacon of bountiful green energy.”

He added: “The plant will be the first of its kind, built by 2040 and capable of putting energy on the grid, and in doing so will prove the commercial viability of fusion energy to the world.”

Rees-Mogg: ‘I don’t mind being called Tory scum'

Monday 3 October 2022 18:17 , Anthony France

Jacob Rees-Mogg said: “If people want to call me Tory scum, I don’t mind”.

Speaking from the main stage of the Conservative Party conference in Birmingham, the Business Secretary said: “Well, ladies and gentlemen, thank you and congratulations for coming to the conference in spite of the best efforts of Mr Mick Lynch, who seemed to wish to get in the way.”

He went on: “You make sure we have Conservative governments and you getting here was proof of that. Some of you may think that I should be going around the trains, putting out little calling cards saying how much I look forward to seeing people back at work soon.

“Because, actually, we have a tireless quest for productivity in this country and we need to make sure that everybody is working efficiently, and we want them obviously to be working in their proper places of work.

“Also I wanted to thank you for giving me almost a warmer welcome as I got outside the hall. But I think that’s rather marvellous, I happen to think that having a democracy where you can actually walk through the streets and people can exercise their right to peaceful protest shows the strength of our society.

“And if people really want to call me Tory scum, I don’t mind.”

Rees-Mogg sinks Boris’s plan for a new royal yacht

Monday 3 October 2022 18:05 , Anthony France

Jacob Rees-Mogg has said Boris Johnson’s plans for a new royal yacht are not in the “realms of reality” as he suggested it should be scrapped.

The Business Secretary described it as a “ship that has sailed”, as he said the “glorious distraction” set to cost £250 million could not go ahead in a cost-of-living crisis.

However, it was understood the design phase for a new national flagship is due to be completed, with an announcement expected to follow.

When prime minister, Mr Johnson had described a new national flagship as a chance for the UK to “show itself off to the world” and “revive the shipbuilding industry”.

Labour had said the plan for a ship to succeed the Royal Yacht Britannia should be scrapped. The money had been set to come from the Ministry of Defence budget.

Mr Rees-Mogg told a recording of the Chopper’s Politics for the Telegraph: “I think it’s a glorious distraction I’m afraid.

“It’s too late, it was wonderful whilst it lasted but there are lots of things that Tories have a sentimental attachment to but once they’ve gone it’s impossible to bring back.

“I think the royal yacht is in that category and we are facing a cost-of-living problem, I just don’t think it’s in the realms of reality to have a royal yacht when you’re facing a cost-of-living problem.

“Dare I say I think it is a ship that has sailed.”

Home Secretary to “look at” pre-charge anonymity for criminal suspects

Monday 3 October 2022 17:53 , Anthony France

The Home Secretary has said she will “look at” giving anonymity to suspected criminals before they are charged.

Suella Braverman told an audience of Young Conservatives at the party conference in Birmingham that “trial by media will only undermine our justice system”.

She said: “We have had some high-profile instances where the media circus around a suspect who has not been charged has been devastating.”

She made the comments in response to a question referring to the cases of Cliff Richard and Harvey Proctor.

Ms Braverman added: “I think coverage of people prior to charge can be very, very damaging, particularly if the charges are not pursued or if they are dropped later on.”

Badenoch: 'Tory Party needs to get behind PM Liz Truss’

Monday 3 October 2022 17:49 , Anthony France

Kemi Badenoch has urged Tory MPs not to rush to the “first TV studio to let everybody know how angry you are” if they have a problem with policy.

Speaking during a Q&A on the main stage of the Conservative Party conference, the International Trade Secretary said: “As a party, we need to get behind the Prime Minister because if you don’t do that, then none of that…

“We need unity. And we need to be able to have dissent in a grown-up fashion. I think, when other people have problems with policy, I think there is a way of communicating it and not necessarily rushing to the first TV studio to let everybody know how angry you are.

“Some of the people who have done this are my friends, but it is not helpful for the whole party. So, the party needs to come together. But we also need to remember who our real opponents are and that’s the Labour Party.”

Badenoch: ‘UK can trade with 50 states of America'

Monday 3 October 2022 17:46 , Anthony France

The UK can do “mini-trade deals” with the 50 states of the US, the International Trade Secretary has said.

During a Q&A on the main stage of the Conservative Party conference, Kemi Badenoch said: “Even though the US is not doing any trade deals at the moment, we are able to have a memorandum of understanding with states.

“So, we can do many trade deals with the 50 states of the US.”

On the UK’s trading relationship with the EU, Ms Badenoch said: “Just because we’re not within the single market, it doesn’t mean that there aren’t other things which we can do.

“So for instance, I know that we have an investment partnership that we’re working with Norway on for example.”

Labour: Kwasi Kwarteng "completely out of touch”

Monday 3 October 2022 17:40 , Anthony France

Shadow chancellor Rachel Reeves MP said Kwasi Kwarteng’s speech showed “a Chancellor and a Tory government completely out of touch, with no understanding on its own appalling record on growth”.

She said: “What the Chancellor called a little financial disturbance is a huge economic body blow to working people that will mean higher prices and soaring mortgages. That’s the Tory economic premium.

“This is an economic crisis made in Downing Street, paid for by working people.”

And he’s off

Monday 3 October 2022 16:51 , William Mata

Mr Kwarteng has now departed the stage. Reactions to follow.

Kwarteng on business

Monday 3 October 2022 16:50 , Will Mata

Chancellor Kwasi Kwarteng told the Conservative Party conference he knows "the interests of business and hard-working families are not in conflict".

He went on: "They are alive, when businesses thrive, they create more jobs, they raise wages and they contribute more for our public services.

"Rather than bashing business, we are backing it. That is why we need to make our tax system simpler, more competitive and pro-growth.

"So, we will reverse the planned increase in corporation tax. Ensuring we have the lowest rate in the G20. This will plough almost £19 billion a year back into the economy.

"That's £19 billion for businesses to reinvest to create jobs and raise wages."

He added: "For over a decade, the Conservative Party has stood up for working people in this country. Since 2010, we have delivered the lowest unemployment since the 1970s and million new businesses, more than doubling the tax-free personal allowance."

Labour assault

Monday 3 October 2022 16:49 , Will Mata

Mr Kwarteng says the “high tax” strategy of Labour will never work and accuses the party of “economic incompetence”.

‘We will act'

Monday 3 October 2022 16:47 , Will Mata

Mr Kwarteng says he has little time for strikes, adding those who do take action will have action taken against them.

Breaking down barriers

Monday 3 October 2022 16:44 , Will Mata

Childcare, agriculture and immigration are areas where Mr Kwarteng would like to “break down barriers” to “get Britain moving”.

Investment zones

Monday 3 October 2022 16:41 , Will Mata

Local areas will be empowered to do things differently, the chancellor says. He added that planning rules will be liberalised to hasten development while taxes will be cut for firms in these zones. Lowering taxes for business is also on his radar.

Serious custodians of the public purse

Monday 3 October 2022 16:40 , Will Mata

Mr Kwarteng stressed the Tories reputations as: “Serious custodians of the public purse.” But he goes on to state a need to “do things differently”.

“Business investment, skills, science and technology... These are the key ingredients for economic growth.”

Fiscal responsibility

Monday 3 October 2022 16:38 , Will Mata

A medium term plan will shortly be published by the Tories, said Mr Kwarteng.

Fiscal responsibility, he said, will deliver the “highest path” to growth.

Thinking long and short term

Monday 3 October 2022 16:35 , Will Mata

Mr Kwarteng said the goverment is well equipped to deal with the short term “shocks” caused by the war in Ukraine but is also placed for long-term growth.


Monday 3 October 2022 16:34 , Will Mata

Mr Kwarteng draws things back for a second.

“There is not just an immediate challenge facing our country - but the whole of Europe, driven by Putin’s barbaric invasion of Ukraine.”

He said “dire warnings” were facing the UK and that the government made a “significant intervention” was staged by the government to keep bills down.

“Two years of significant tax payer support. This government will always be on the side of those who need help the most.”

Thunderous applause.

Two and a half per cent annual trend growth

Monday 3 October 2022 16:31 , Will Mata

The aim is two and a half per cent annual trend growth, Mr Kwarteng said.

“We’ve done it before and we can do it again.”

More, more, more

Monday 3 October 2022 16:30 , Will Mata

More businesses, more jobs, more pay, more money for services... are all on the chancellor’s agenda.

“We cannot have a strong NHS without a strong economy,” he says - adding the same for schools and the army.

“Growing the economy should be our central and guiding mission.”

“Can I be frank...”

Monday 3 October 2022 16:27 , Will Mata

“I know the plan put forward only ten days ago has caused a little turbulance,” Mr Kwarteng said.

“I get it. We are listening and have listened. And now I want to focus on delivering the major parts of our growth package.”

He lists the Covid aftermath, energy bills skyrockering and the Ukraine war as hitting Britian’s prospects.

“What we need is economic growth. That is why we will forge a new economic deal for Britian, that is an iron clad commitment for fiscal discipline.”

Chancellor admits imperfections of mini budget

Monday 3 October 2022 16:23 , Will Mata

Growth plan

Monday 3 October 2022 16:22 , Will Mata

“Our growth plan set out ten days ago will make sure we focus relentlessly on economic growth,” Mr Kwarteng says.

“We must face up to the fact that for too long our economy has not grown enough.

“I refuse to believe that it is our destiny to fall back to middle league status or the tax burden reaching a 70 year high.”

‘We need to get on and move forward'

Monday 3 October 2022 16:20 , Will Mata

Mr Kwarteng started his speech in meaningful fashion and has now segued into speaking of the history of Birmingham.

‘What a day'

Monday 3 October 2022 16:18 , Will Mata

Kwasi Kwarteng has made his way to the lectern.

“What a day... It has been tough. But we need to focus on the job in hand,” the chancellor begins.

Liz Truss arrives in hall

Monday 3 October 2022 16:17 , Will Mata

The lockdown might be lifted according to some reports, as Liz Truss has made her way into the arena.

The prime minister was seen embracing Nadhim Zahawi.

‘An avoidable situation’

Monday 3 October 2022 16:13 , Will Mata

Economist Gerard Lyons said the financial chaos of the past week was "an avoidable situation".

Mr Lyons, reported to be favoured by Liz Truss, suggested at a Policy Exchange event at the Conservative Party conference that the absence of a forecast by the Office for Budget Responsibility (OBR) had caused problems.

He said: "When you don't have anyone marking your homework in terms of the OBR ... the markets are going to penalise you if they think it's inflationary or not affordable, so it was completely an avoidable situation."

Dr Lyons added that he had not been "privy to anything that was in the mini-budget"..

Speech 'running late’

Monday 3 October 2022 16:12 , Will Mata

The Chancellor’s speech is set to be heard later than the originally billed 4pm slot.

Latest suggestions are that it will begin within the next ten minutes.

Incident is a ‘security alert’

Monday 3 October 2022 16:06 , Will Mata

Birmingham Police has said they have temporarily restricted access to and from the ICC.

The force will give an update shortly.

Conference ‘in lockdown’

Monday 3 October 2022 15:52 , Will Mata

It has been reported that the conference is currently in lockdown due to an ‘unknown incident’.

Pound latest

Monday 3 October 2022 15:42 , Will Mata

The pound has now risen by 1.1 per cent against the dollar since this morning. The growth in confidence follows the u-turn over the 45p tax rate.

Former deputy PM: ‘Things are looking bleak for Tories at next election'

Monday 3 October 2022 15:05 , Lydia Chantler-Hicks

Former deputy prime minister Lord Heseltine has said “things are looking pretty bleak” for Tory hopes of winning the next election.

He told a conference fringe event: “It will require a very impressive feat of political leadership and it needs to start today. Like this afternoon.”

Lord Heseltine warned Liz Truss that she needed to bring in MPs from across the party, rather than just her supporters.

He urged her to take the “talent off the back benches, not the cronies off the back benches”.

He said there was “appalling” short-termism in politics and leaders had to tackle that by appointing “ministers who know what the heck they are doing”.

Senior Tory dismisses calls for Chancellor to be sacked

Monday 3 October 2022 14:09 , Lydia Chantler-Hicks

Senior Conservative MP Mel Stride dismissed suggestions that the Chancellor should be sacked, saying now is the time for “calm”.

Speaking to BBC Radio 4’s World At One, the chairman of the Commons Treasury Committee also reiterated his desire for the Office for Budget Responsibility (OBR) forecast to be brought forward.

He said it is “fact” that the OBR are in a position to provide a “full forecast by the end of this month” and it is now just a case of how quickly the Government can bring together its plans.

Asked if the Chancellor should be sacked, Mr Stride said: “Well he’s obviously under a great deal of pressure and this is a very difficult situation, but I do think that certainly the parliamentary party should take a big deep breath now.

“There’s been a small reset around this top rate income tax, which will relieve many backbenchers. What we need to do now is give the Government the time to come forward with its OBR forecast, come forward with its plans around that, and then judge it in the round.

“And if they can get that right and if they can stabilise the markets, then I think we’re in a position where the party can start to build from that. I don’t think we need to sort of walk in sort of sacking people and having political crises any more than we already have them at the moment, I think now is the time for calm level headedness.”

‘System would rather young people go into Harry Potter studies than construction’ says education minister

Monday 3 October 2022 14:08 , Lydia Chantler-Hicks

The current system would rather young people get a degree in “Harry Potter studies” than apprentices in construction, an education minister has said.

Speaking at a fringe event at the Conservative Party conference in Birmingham, Andrea Jenkyns said: “A skilled modern economy competing on the global stage requires technical skills just as much as it needs graduates.

“Yet the current system would rather our young people get a degree in Harry Potter studies, than the apprentices shaping construction.

“It doesn’t take magic powers to work out that this is wrong, which is why the Government is committed to putting the broomstick to good use and carrying out a spring clean of low quality courses.”

Ms Jenkyns insisted “if a course isn’t providing someone with a positive outcome”, it makes “no sense” the Government “should be funding it”.

Ms Jenkyns also argued that in some cases young people are not getting skills that are “fit for the future” at universities, adding: “They are being fed a diet of critical race theory, anti-British history and sociological Marxism, which is why this Government is determined to provide an alternative”.

Rees-Mogg refutes suggestion an election is needed

Monday 3 October 2022 14:06 , Lydia Chantler-Hicks

Business Secretary Jacob Rees-Mogg disagreed with former Cabinet ally Nadine Dorries after she suggested Liz Truss requires a general election to divert significantly from the 2019 Tory manifesto.

He told a Telegraph event at the Conservative conference that they used to get on “like a house on fire” around the Cabinet table and agreed on “almost everything”.

But he added: “I don’t think there’s going to be an immediate election and I don’t think there’s a requirement for one.”

‘Commons wouldn’t vote to withdraw from European Convention on Human Rights’, says Rees-Mogg

Monday 3 October 2022 14:03 , Lydia Chantler-Hicks

There is “no mandate” for Britain to leave the European Convention on Human Rights, Jacob Rees-Mogg has said.

He told the Conservative Party Conference: “We would not get withdrawal through the House of Commons…And as we’ve discovered in the last week, there’s no point taking on political battles when ultimately, you’re not gonna be able to stick to it.”

Energy Secretary says he would welcome fracking in his own back garden

Monday 3 October 2022 13:54 , Lydia Chantler-Hicks

Jacob Rees-Mogg told the Conservative Party Conference he would welcome fracking in his own back garden in Somerset.

The Energy Secretary said he would be “delighted to have the royalties” if drilling for gas and oil could be done on his land.

Mr Rees-Mogg said it is “the socialists” and Green MP Caroline Lucas who oppose fracking, adding: “Well that makes my heart bleed.”

‘Tories will win next election’, says Gove

Monday 3 October 2022 13:50 , Lydia Chantler-Hicks

The Conservatives will win the next general election, former minister Michael Gove has said.

Asked whether the Tories would turn around their polling the former levelling up secretary replied: “Will we win the next election? Yes.”

MP Michael Gove at Britain's Conservative Party's annual conference in Birmingham on Monday (REUTERS)
MP Michael Gove at Britain's Conservative Party's annual conference in Birmingham on Monday (REUTERS)

His comments come after Labour surged to a 33 point lead over the Tories in a YouGov poll - thought to be the largest lead enjoyed by any political party since the late 1990s - amid fallout of the Government’s mini-budget last week.

Mr Gove also described Jacob Rees-Mogg as the “best-read man in Parliament” after the Business Secretary reportedly described the 45p tax U-turn as a “tale of sound and fury signifying nothing”.

Rees-Mogg criticises Gove, stands by ‘Boudicca’ PM

Monday 3 October 2022 13:45 , Lydia Chantler-Hicks

Jacob Rees-Mogg has criticised Michael Gove after the senior Tory suggested he would not vote for Liz Truss’s Budget because he did not believe it the right time to cut taxes for top earners.

The Energy Secretary joked that Mr Gove was “wet” for only taking party in nine fringe events at the Tory party conference and said he had always thought of him as “the Tory party’s version of Peter Mandelson”.

Mr Mogg added that Liz Truss has his full support as he described the Prime Minister as like “Boudicca”.

Rees-Mogg brands U-turn fallout an ‘absurd distraction'

Monday 3 October 2022 13:43 , Lydia Chantler-Hicks

Jacob Rees-Mogg has described the row over the 45p tax rate cut as an “absurd distraction”.

The Business and Energy Secretary told a fringe event at the Conservative Party Conference that the Government had to make decisions quickly and should not be blamed for changing unpopular policies.

He told the audience: “The problem is with any decision that you ever make …there is always the temptation to ask for one more report, one more expert opinion, one more verification that what we’re going to do is right.”

And by the time you’ve come to making the decision, the time for making the decision has passed.

And government is much too much about this and having another view, another pretend consultation where you set the questions to get the answers that you want. It’s all delay before the fact that they’ve been doing that for years and years and years and we need to get on with things.” Mr Mogg added that he heard about Kwasi Kwarteng ditching the planned axing of the 45 top rate of income tax this morning in a text from the deputy Prime Minister, Thérèse Coffey.

Lammy urges Labour to take chance

Monday 3 October 2022 13:33 , Will Mata

Shadow foreign secretary David Lammy (Aaron Chown/PA) (PA Archive)
Shadow foreign secretary David Lammy (Aaron Chown/PA) (PA Archive)

Shadow foreign secretary David Lammy said the UK Government "must not squander" the opportunity to make progress on the Northern Ireland Protocol.

The Tottenham MP said: "The last thing the UK needs, in the middle of a fiscal crisis the Conservatives have created, is new trade barriers with the EU.

"For months, Labour has been calling for the Government to get round the negotiating table with the EU to fix the bad deal it negotiated.

"There is a window now the government must not squander. With hard work and compromise on all sides, a deal is achievable to end this damaging, self-inflicted stand-off."

Donor blames media for party u-turn

Monday 3 October 2022 13:32 , Will Mata

Alasdair Locke, chairman of the Motor Fuel Group, has told Radio 4 that the Conservative Party - whom he donates to - was “blown off path” by the “sensational” media’s reaction.

“Generally cutting taxes when you're facing an economic downturn if not a recession seems to me to be a pretty obvious thing to do rather than to raise taxes,” he told the Today programme.

Rees-Mogg: Kwarteng should not resign

Monday 3 October 2022 13:28 , Will Mata

Business Secretary Jacob Rees-Mogg was confronted by protesters as he arrived at the conference (Getty Images)
Business Secretary Jacob Rees-Mogg was confronted by protesters as he arrived at the conference (Getty Images)

Business secretary Jacob Rees-Mogg said the government had to U-turn on the abolition of the top rate of income tax out of "political reality", but said chancellor Kwasi Kwarteng should not resign.

He told a Telegraph event at the Conservative conference: "Sometimes things we want to do don't receive the approbation of the nation."

He said there is no point "sticking stubbornly" to policies amid opposition but insisted "this is a tax-cutting Government".

"One tax cut, of all of these the smallest in terms of money to the Exchequer, has not been followed through.

Warm words ahead of Northern Ireland meeting

Monday 3 October 2022 13:21 , Will Mata

UK and EU officials have signalled they are willing to resolve the impasse over the Northern Ireland Protocol.

European Commission (EC) spokesman Daniel Ferrie confirmed the two sides will meet this week for technical level talks, adding the EU will approach them "constructively" and it remains "committed to finding joint solutions".

No comment on a potential rise in benefits alongside inflation

Monday 3 October 2022 13:12 , Will Mata

Chancellor Kwasi Kwarteng (Getty Images)
Chancellor Kwasi Kwarteng (Getty Images)

The Chancellor has again declined to say whether benefits will be increased in line with inflation, as the Government U-turned on plans to cut the top rate of income tax for the highest earners.

Kwasi Kwarteng said he is "not committed to any spending" during an interview on LBC radio on Monday morning.

‘Meeting would be useful’

Monday 3 October 2022 12:41 , Will Mata

Liz Truss and Emmanuel Macron last week (PA Wire)
Liz Truss and Emmanuel Macron last week (PA Wire)

A Downing Street spokesperson said the Prime Minister would use a meeting of the European Political Community to "deliver long-term action" on issues facing the UK.

It caused some surprise when it emerged that Liz Truss, a previous sceptic of French President Emmanuel Macron's scheme to bring together EU nations and countries outside the bloc, would be attending the summit in Prague this week.

The Prime Minister's official spokesman said on Monday: "The continent faces unprecedented challenges, not least the war in Europe.

"But there are other issues as well that need addressing, including migration and energy. The Prime Minister is very clear that she wants to use this meeting to deliver concrete long-term action on priority issues for the United Kingdom."

Nadine Dorries suggests PM should call an election

Monday 3 October 2022 12:31 , Lydia Chantler-Hicks

Former Cabinet minister Nadine Dorries said there was “widespread dismay” at Liz Truss for ditching key parts of Boris Johnson’s administration’s agenda - and suggested the Prime Minister should call an election.

“Widespread dismay at the fact that three years of work has effectively been put on hold,” said Ms Dorries, who served as Secretary of State for Digital, Culture, Media and Sport under Boris Johnson.

“No one asked for this. C4 (Channel 4) sale, online safety, BBC licence fee review, all signed off by Cabinet all ready to go, all stopped.

“If Liz wants a whole new mandate, she must take to the country.”

Leader of Scottish Conservatives says U-turn is ‘right decision’

Monday 3 October 2022 12:28 , Lydia Chantler-Hicks

Abandoning a plan to abolish the top rate of income tax for the highest earners is “the right decision” by the Chancellor, Scottish Conservatives leader Douglas Ross has said.

Douglas Ross, leader of the Scottish Conservatives, at a fringe event at the Conservative Party annual conference on Monday (PA)
Douglas Ross, leader of the Scottish Conservatives, at a fringe event at the Conservative Party annual conference on Monday (PA)

During a fringe speech at the Conservative Party Conference in Birmingham, he said: “I think he’s made the right decision. The best part of the Government’s growth plan going forward remain and the area that caused most concern has gone. Politicians have to listen and respond and that is exactly what the Chancellor has done.”

Taking questions following his speech, he added: “What we have seen is an immediate response from the markets as a result of the change announced by the Chancellor, but we have to continue to look at the positive aspects of the budget.”

Chancellor’s medium-term plan ‘still scheduled for November 23’

Monday 3 October 2022 12:18 , Lydia Chantler-Hicks

Chancellor Kwasi Kwarteng’s medium-term fiscal plan is still scheduled for November 23, according to the Prime Minister’s official spokesman.

Asked when details of the supply side reforms will emerge, he replied: “There will be a series of announcements in the coming weeks on some of the supply side areas and I think the Chancellor set those out during his fiscal statement.

“They will seek to address some of the longstanding issues, whether it’s on financial services or issues like migration and there will be more to set out but I can’t obviously get into the details at this point.”

Gove suggests PM bit off more than she can chew with mini-budget

Monday 3 October 2022 12:16 , Lydia Chantler-Hicks

Conservative former Cabinet minister Michael Gove suggested the Prime Minister bit off than she can chew with her attempt to scrap the 45p top rate of tax.

Speaking to Times Radio, Mr Gove said: “I think she’s recognised, as we all do in politics, that if you bite off just that little bit more than you can chew, then the right thing to do is to extract the gobstopper as it were, and then get on with the job.”

He also said: “As turbulence goes, it has been a pretty hairy 24 hours.”

When it was put to him that it sounds like he would vote against a measure that would prevent benefits rising with inflation, Mr Gove said: “No, I wouldn’t put it that way.”

Asked if there are any circumstances in which he would vote for benefits not rising with inflation, he paused, before saying: “I can’t predict how Liz (Truss) and Kwasi (Kwarteng) will unveil and develop their package, and I don’t want at this stage to anticipate, second guess, or try to backseat drive.”

But he added on budget measures: “I think that we should look at those decisions thinking always how are the most vulnerable in our society going to be affected, how can we protect them?”

Chancellor and PM held U-turn discussions on Sunday

Monday 3 October 2022 12:05 , Lydia Chantler-Hicks

Liz Truss and Kwasi Kwarteng held talks on Sunday ahead of the tax U-turn, according to Downing Street.

Asked to clarify the timings around when the decision was made given Ms Truss’s support for the policy on Sunday morning, the Prime Minister’s official spokesman told reporters: “The Chancellor said he and the Prime Minister talked together yesterday and they were in agreement that they wouldn’t proceed with the abolition of the rate.”

Asked if Ms Truss is committed to everything else in the mini-budget, the spokesman said: “Yes.”

Asked if the Prime Minister was confident everything announced would pass through the Parliament, the spokesman replied: “Yes.”

PM says she still has confidence in Chancellor

Monday 3 October 2022 12:03 , Lydia Chantler-Hicks

Liz Truss continues to have confidence in Chancellor Kwasi Kwarteng following the tax U-turn, according to Downing Street.

Asked if Ms Truss has confidence in Mr Kwarteng, the Prime Minister’s official spokesman told reporters: “Yes.”

‘More U-turns needed, or public spending cuts will follow’ warns IFS chief

Monday 3 October 2022 11:59 , Lydia Chantler-Hicks

The Institute of Fiscal Studies’ director Paul Johnson said Kwasi Kwarteng would still need to consider cuts to public spending unless he had further U-turns on his tax pledges.

Mr Johnson said: “The direct impact of the Government’s U-turn on the abolition of the additional 45p rate of income tax is of limited fiscal significance.

“At a medium-run cost of around £2 billion a year, it represented only a small fraction of the Chancellor’s mini-budget announcements. His £45 billion package of tax cuts has now become a £43 billion package, a rounding error in the context of the public finances.

“The Chancellor still has a lot of work to do if he is to display a credible commitment to fiscal sustainability.

“Unless he also U-turns on some of his other, much larger tax announcements, he will have no option but to consider cuts to public spending: to social security, investment projects, or public services.

“On the latter, the Chancellor has indicated that departments’ cash spending plans that run to 2024-25 will be left unchanged, which amounts to a real-terms cut in their generosity in the face of higher inflation. This will squeeze public services, but will not be enough to plug the fiscal hole the Chancellor has created for himself.”

Former minister jokes about Chancellor being sacked

Monday 3 October 2022 11:56 , Lydia Chantler-Hicks

A Conservative former cabinet minister joked that Chancellor Kwasi Kwarteng may be sacked.

At a fringe event at the Conservative Party Conference, Baroness Morgan of Cotes told the other panellist, Treasury minister Felicity Buchan: “Keep your phone on you. You never know, you might be asked to be chancellor next.”

In a “message” for her Conservative parliamentary colleagues, Lady Morgan also said “what the business world wants above all else is stability”.

She went on: “So please, no more political crises.

“Actually just a period of calm, confident Government would be much appreciated by the business world.”

Gove says he could support mini-budget plan now income tax cut abolished

Monday 3 October 2022 11:50 , Lydia Chantler-Hicks

Conservative former Cabinet minister Michael Gove suggested he could support the Government’s fiscal package now that abolishing the 45p top rate of tax has been removed.

Asked on Times Radio if he would now vote for the rest of the package, Mr Gove said: “Well yeah I think so on the basis of everything that I know. Again, to be fair to Kwasi (Kwarteng) and to Liz (Truss), they’ll have an opportunity both this week and also when Parliament returns to lay out more detail in the growth plan overall.

“And I think again in fairness to them, there were lots of good things that they announced, and some potentially interesting things, the detail of which I will have to analyse and scrutinise, and the debate over the 45p tax increase obscured that.

“So naturally, I’m still a Conservative MP last time I checked, though I’ll check in with the Chief Whip later, and therefore I will want to support, and I think as I say on the basis of everything I’ve heard, there’s lots that can be enthusiastically supported.”

He added that Liz Truss “won the debate and the contest” in the leadership election and she is “entitled to the time and space to make her case and to make the changes that she argued for” during the campaign.

Shadow chancellor calls for benefits to increase in line with inflation

Monday 3 October 2022 11:46 , Lydia Chantler-Hicks

Shadow chancellor Rachel Reeves has said not increasing benefits in line with inflation would be “grotesque”.

She said: “The idea that the Government can afford to give tax cuts to the wealthiest, but not uprate benefits in line with inflation, I think is grotesque.

“And there are many people who are saying that the Government needs to rethink this one as well.

“The Prime Minister yesterday refused to say whether people with disabilities, people on universal credit, will see their benefits go up in line with inflation next year.

“That uncertainty for people who are already seeing huge increases in their energy prices in the weekly food shop, it’s a time of huge anxiety. And yet the Government seem to be that cutting taxes for people who are already on big salaries or businesses already making big profits, that seems to be their priority.

“This idea of trickle down economics, which has failed in the past and will fail again, the Government don’t just need to reverse the budget, they need to rethink the whole idea of trickle down economics, which is causing huge anxiety and sent the markets into a panic.”

‘Mini-budget showed Tories’ true instincts’, says shadow chancellor

Monday 3 October 2022 11:44 , Lydia Chantler-Hicks

Shadow chancellor Rachel Reeves said the U-turn could not mask the true instincts of the Tories.

She told broadcasters: “The mini-budget showed what their instincts were, their instincts were to cut taxes for the wealthiest in society, paid for by borrowing, which in the end, current and future taxpayers will have to pay for.

“It was obvious they weren’t going to get this through the House of Commons, they were forced into this screeching U-turn but so much damage has already been done with higher government borrowing costs, and huge worries to people about how they’re going to afford their mortgages.”

She called for Parliament to be recalled, with the Office for Budget Responsibility forecasts published as soon as possible.

“I wrote to the Chancellor yesterday and said that when the OBR give the Prime Minister and the Chancellor their forecast this Friday, that that should be available to everybody else as well.”

Mayor of London calls on Government to help those in need, ‘not the wealthy'

Monday 3 October 2022 11:38 , Lydia Chantler-Hicks

Mayor of London Sadiq Khan says it is “100% right that the Govt has finally u-turned” on its plan to scrap the top rate of income tax for the highest earners.He added that the Government “needs to focus on helping Londoners who need support, not the wealthy”, in a post on Twitter.

‘Economic turmoil wrongly attributed to mini-budget’, says economist

Monday 3 October 2022 11:06 , Lydia Chantler-Hicks

Economist Gerard Lyons said most developments in UK financial markets last week were “wrongly” attributed to the Government’s controversial mini-budget.

Chancellor Kwasi Kwarteng’s fiscal statement triggered turmoil in the City, sending the pound plummeting and the cost of Government borrowing soaring.

Mr Lyons, chief economic strategist at Netwealth, who has been an external adviser to Prime Minister Liz Truss, told a fringe event at the Tory conference in Birmingham: “The challenge last week was in the wake of the mini-budget, it seemed that most if not all of the developments in UK financial markets were attributed to the mini-budget wrongly.

“For instance, global markets were moving quite significantly last week. The dollar, actually sterling did pretty well against the dollar last week, but the dollar has been strong across the board, interest rate expectations globally have risen.

“So even if there had not been a mini-budget, it’s likely that we would’ve seen significant movements in markets last week in the UK, because that’s what was happening globally.”

Economic strategist says he ‘was very clear’ about risks of mini-budget

Monday 3 October 2022 10:50 , Lydia Chantler-Hicks

Gerard Lyons has said it was “incorrect” of Kwasi Kwarteng to claim that the economist did not warn him about the risks of the mini-budget.

Mr Lyons, chief economic strategist at Netwealth, who has been an external adviser to Prime Minister Liz Truss, was asked about the Chancellor earlier telling BBC Radio 4’s Today programme that he could not “remember” being warned by him that the markets would not tolerate unfunded tax cuts.

Mr Lyons told the PA News agency: “Well that’s incorrect. I was very clear.”

Asked if he was pleased about Ms Truss and Mr Kwarteng’s U-turn on scrapping the top rate of income tax for the highest earners, Mr Lyons said: “I have no view on the U-turn.

“I was critical of that immediately after the mini-statement and said so publicly on the record, but it’s up to them what they do in terms of U-turns”.

Former minister: ‘I’m pleased PM and Chancellor listened to our concerns’

Monday 3 October 2022 10:03 , Lydia Chantler-Hicks

Former Government minister Robin Walker is among the backbench MPs to welcome the Government’s U-turn on the plan to axe the 45% rate of income tax.

On Monday morning, he tweeted: “Very pleased that the Chancellor & PM have listened to the concerns of myself and other colleagues re scrapping the 45p rate.”

He said: “Now we can focus on the wider plan to grow the economy, cut the lower rate of tax sooner, increase wages & help with the cost of energy.”

Lib Dem leader says Chancellor ‘has to go'

Monday 3 October 2022 09:53 , Lydia Chantler-Hicks

Chancellor Kwasi Kwarteng should be given the boot after his tax U-turn, according to Liberal Democrat leader Sir Ed Davey.

Sir Ed told Sky News: “I welcome this U-turn but the unfortunate truth is that this Conservative Government is in complete chaos.

“I don’t think the Chancellor has the credibility to make all the changes that are needed and I think he has to go, and I think that would really restore confidence.”

Sir Ed said the Government has made a “small change”, adding: “We need a far more radical overhaul of the Budget, we need it soon and we need it to be done in a transparent way, and I come to the conclusion, regrettably, that I think this Chancellor can’t deliver that.”

In a post on Twitter, he added: “They didn’t listen when people’s mortgages soared, the pound crashed and our economy tanked. Kwasi Kwarteng must resign now and this rotten budget needs to be scrapped.”

‘I’ve never known Truss change her mind before’ says think tank chief

Monday 3 October 2022 09:26 , Lydia Chantler-Hicks

On the Government scrapping plans to axe the 45p top rate of tax, the director-general of a free-market think tank said: “I’ve known Liz Truss for many years and I can’t think of another time where she’s changed her mind on anything, anything at all.”

He appeared to speculate as to whether the U-turn - which swiftly followed backlash from former Tory ministers Grant Shapps and Michael Gove - could pave the way for similar reversals in future.

Mark Littlewood, of the Institute of Economic Affairs, told BBC Radio 4’s Today programme: “As a matter of principle I would have liked to have got rid of this rate...I think it raises virtually no money.

“But this has become a political hot potato, they have decided this is not the hill they’re going to die on, a tax that raises £2 billion or so. And they are going to hope this calms the markets.

“Of course, it will raise the question that the next time Kwasi Kwarteng makes an announcement that Grant Shapps and Michael Gove don’t like, does that announcement stick?”

He later added: “You always worry about that when you see a U-turn…I’ve known Liz Truss for many years and I can’t think of another time where she’s changed her mind on anything, anything at all.”

Treasury insists rest of mini-budget will go ahead

Monday 3 October 2022 09:03 , Lydia Chantler-Hicks

Chief Secretary to the Treasury Chris Philp said there is a “strong economic case” for scrapping the 45p tax rate but the policy had become a “distraction”.

He insisted the rest of the mini-Budget will be implemented, saying of the 45p tax rate policy on Times Radio: “I think there is a strong economic case, it’s the case indeed I’ve been making for the last week or two to do with international competitiveness and making sure people come to the UK rather than anywhere else.

“However, it is very clear that public opinion doesn’t support it, it’s clear that parliamentary opinion doesn’t either, and so the Government – the Prime Minister and the Chancellor – have listened to that and decided to remove it from the package in order to avoid it being a distraction.”

On the other policies announced by Kwasi Kwarteng in his “growth plan”, Mr Philp said: “The rest of it is all staying.”

‘Let’s hope this is beginning of stability’, says British industry chief

Monday 3 October 2022 08:58 , Lydia Chantler-Hicks

Director-general of the Confederation of British Industry (CBI) Tony Danker suggested the now-scrapped plan to cut the 45p tax rate “undermined market confidence” but said he hopes it spells the beginning of market stability.

Speaking to LBC, he said: “This was a budget of two halves. You had some very good economic reforms here which, he’s absolutely right, will be good for growth, which businesses had been wanting to see for some time.

“But the other stuff was getting in the way, it undermined market confidence, clearly in the last 24 hours it undermined political confidence. And I hope what this begins to do is, exactly to your point, it brings stability.”

He added: “None of this growth plan will work unless we have stability. Let’s hope this is the beginning of it.”

Asked if companies from overseas would be encouraged to come to the UK with the Chancellor having to U-turn and if it is confidence-building, Mr Danker said: “No, but the opposite would be true, which is if he had persevered with something that was politically unpopular, unpopular with the markets, unpopular with businesses, then that would have made the UK even less desirable a place to be.

“So hopefully what we are doing is putting that one behind us.”

Kwarteng: ‘With hindsight, day after budget probably wasn’t best to attend party’

Monday 3 October 2022 08:54 , Lydia Chantler-Hicks

The Chancellor has admitted that attending a party with financiers after the mini-budget was “a difficult call” and “it probably wasn’t the best day to go”.

Kwasi Kwarteng reportedly attended a private champagne reception with hedge fund managers who stood to gain from a collapse in sterling just hours after his mini-budget, joining the gathering at a financier’s home in Chelsea on the evening of September 23, according to The Sunday Times.

Speaking to LBC radion on Monday, he said the Tory party event had been planned for “a few weeks”.

“I spent, I think, quarter of an hour there, or maybe a bit longer,” he said. “It was a party event, we have party events all the time.

“I think it was a difficult call and I totally get how it looks. I just feel that it was something that I was signed up to do and I had to do.”

He acknowledged that “with hindsight it probably wasn’t the best day to go”.

U-turn ‘not about parliamentary games’ but about ‘listening to people'

Monday 3 October 2022 08:50 , Lydia Chantler-Hicks

The decision to change course on the 45p tax rate was “not about parliamentary games or votes in the House of Commons” but about “listening to people”, Chancellor Kwasi Kwarteng said.

Chancellor Kwasi Kwarteng speaking to the media on Monday (PA)
Chancellor Kwasi Kwarteng speaking to the media on Monday (PA)

Asked on BBC Radio 4’s Today programme if the policy is still the right thing to do or whether he is scrapping the plan because he cannot get it through, Mr Kwarteng said: “It’s not a question of getting it through, it’s a question of actually getting people behind the measure. It’s not about parliamentary games or votes in the House of Commons.

“It’s about listening to people, listening to constituents, who have expressed very strong views about this, and on balance I thought it was the right thing not to proceed.”

Asked about Prime Minister Liz Truss saying on Sunday morning that she was going ahead with the plan, and explaining the timing, Mr Kwarteng said: “We get it. I get it. I saw the reaction. I saw the focus, the intense focus on that particular measure.”

Asked why he did not listen to the reaction on Saturday, he said: “We were absorbing the reaction and we were thinking ‘What are we going to do?’”

He stressed that the 45p rate “was one element of a very comprehensive plan” and said it “even fiscally wasn’t the most significant by any means”.

Chancellor ‘refuses to rule out new era of austerity'

Monday 3 October 2022 08:41 , Lydia Chantler-Hicks

Chancellor Kwasi Kwarteng did not rule out a new era of austerity to pay for tax cuts.

He told BBC Radio 4’s Today programme: “You will see what our spending plans are in the medium-term fiscal plan but I’m not going to be drawn into that.”

Kwarteng declines to apologise to the nation

Monday 3 October 2022 08:39 , Lydia Chantler-Hicks

Chancellor Kwasi Kwarteng declined to apologise directly to the nation and to Conservative MPs who had been warned over their possible rebellion on tax plans.

Instead he told BBC Radio 4’s Today programme: “There’s humiliation and contrition and I’m happy to own it.”

Chancellor refuses to be drawn on benefits

Monday 3 October 2022 08:37 , Lydia Chantler-Hicks

Chancellor Kwasi Kwarteng refused to say whether benefits will be uprated 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.

Mr Kwarteng told LBC Radio: “I’m not committed to any spending.”

Pressed on the issue of benefits uprating, he said: “I’m not going to comment on spending today.

“What we are focused on is the growth plan, we have got a medium-term plan which will set out more spending policies in the near future.”

Chancellor plays down fallout of U-turn

Monday 3 October 2022 08:26 , Lydia Chantler-Hicks

Chancellor Kwasi Kwarteng sought to play down the political impact of the U-turn on a key policy announcement.

“These things happen in politics,” he told LBC Radio.

Asked if the measures lifting the cap on bankers’ bonuses would now also be abandoned, he said: “I have said what I said about the 45p rate and I am totally focused on delivering the growth plan.”

Chancellor of the Exchequer Kwasi Kwarteng during an interview with LBC on Monday morning (Getty Images)
Chancellor of the Exchequer Kwasi Kwarteng during an interview with LBC on Monday morning (Getty Images)

Pressed repeatedly on whether he would make further U-turns, he said he was “focused on the growth plan”.

Asked when the growth plan would provide the economic boost it is intended to deliver, he said: “I can’t say a specific date or a specific time…I’m hoping for a growing economy.”

But he said: “I’m absolutely convinced that 2023 will be better for the growth plan than the opposite. If we hadn’t had it, we were facing low growth and high taxes and that is what I wanted to avoid.”

Kwarteng: ‘U-turn was made in spirit of contrition'

Monday 3 October 2022 08:20 , Lydia Chantler-Hicks

Kwasi Kwarteng said he was making the U-turn “in a spirit of contrition and humility” because scrapping the 45p tax rate “doesn’t make sense”.

He told LBC Radio that other parts of the growth package had been welcomed but “there is this one element, which is the 45p rate, which was, I accept, controversial” and “people have said they don’t like it”.

“I’m listening, and I get it, and in a spirit of contrition and humility I have said ‘actually this doesn’t make sense, we won’t go ahead with the abolition of the rate’.”

Chancellor denies economic chaos was down to income tax cut

Monday 3 October 2022 08:18 , Lydia Chantler-Hicks

Kwasi Kwarteng has insisted turmoil on the UK market was not the result of his plan to cut the 45p rate.

He told LBC Radio: “I think there was a whole range of things that were going on in the gilt market.”

He said the turbulence was triggered by interest rates going up across the world, particularly in the US, which saw bond prices going down, forcing the Bank of England intervention.

“That was a different set of issues from the tax measures that we announced in the mini-budget,” he claimed.

Kwarteng: ‘I take full responsibility for mini-budget'

Monday 3 October 2022 08:17 , Lydia Chantler-Hicks

Chancellor Kwasi Kwarteng has said he takes responsibility for the contents of his mini-budget, which was unveiled 10 days ago and included plans to axe the higher rate of income tax.

He told LBC that this morning’s U-turn on the controversial cut came after “I decided, along with the Prime Minister, that the best thing to do was simply not proceed with the abolition of the rate”.

“I was responsible for the budget, I take full responsibility for that, I was looking around the world and looking at competitive tax rates,” he added. “But I think governments have to listen.”

Asked if he would have been fired for such a mistake in the City, he said: “I don’t think that is the case at all. I think people actually have the maturity to learn from things that haven’t gone right.

“And also in politics, absolutely in politics, you have to listen to people, you have to understand that you are not going to get 100% of things right all the time and when you listen you do have, in the spirit of humility, to take on board what people are saying.”

Nicola Sturgeon brands U-turn ‘morally wrong’ and ‘utter ineptitude’

Monday 3 October 2022 08:14 , Lydia Chantler-Hicks

In a scathing post on Twitter, Scotland’s First Minister Nicola Sturgeon wrote: “UK gov u-turns on top tax rate abolition because it’s a ‘distraction’.

“Morally wrong and hugely costly for millions is a better description. Utter ineptitude.

“Perhaps those who slammed @scotgov for not immediately following suit should also be reflecting this morning…”

Chancellor doesn’t rule out scrapping plans to axe banker bonuses

Monday 3 October 2022 08:10 , Lydia Chantler-Hicks

Kwasi Kwarteng refused to confirm whether he would also scrap plans to axe the cap on banker bonuses.

Asked whether he would U-turn on his ambitious plans to deregulate London’s financial industry to boost growth, he told LBC: “I’ve said what I’ve said about the 45p rate and I’m totally focused on delivering the growth plan, on delivering the energy intervention and making sure that the 1p reduction in the basic rate [is cut].”

Shapps: 45p tax cut was ‘crowding out’ rest of Government’s plan

Monday 3 October 2022 08:04 , Lydia Chantler-Hicks

Conservative former Cabinet minister Grant Shapps said the 45p tax issue was “crowding out” other Government policies.

Speaking to BBC Breakfast just before the Government announcement, Mr Shapps said: “I’d spoken to the Chancellor and I’d spoken to the Prime Minister over the weekend and said that actually you know, knocking on doors, it was very, very clear that this 45p issue was actually crowding out all the other good stuff, like that massive energy cap, which is designed to help millions of people.”

He said that people on the doorstep had told him that the money the Government is borrowing “is one of reasons why these mortgage rates are going up”.

Mr Shapps added: “So it was very, very important that they acted to sever that link and that’s what they are doing this morning and I strongly welcome that.”

“It’s better to act, it’s better to reverse ferret on something that’s causing a problem like this, and it sends a very important signal to the public and also to the markets that we are serious about sound money. And if Conservatives are not about looking after the public purse, then what are we here for?” Mr Shapps said.

Labour calls for Government to scrap entire economic plan

Monday 3 October 2022 08:02 , Lydia Chantler-Hicks

Labour has pressed for Liz Truss and Kwasi Kwarteng to back down on the rest of their tax-cutting mini-budget following their major U-turn this morning.

Shadow chancellor Rachel Reeves said the reversal on cuts to higher income tax “comes too late for the families who will pay higher mortgages and higher prices for years to come”.

“The Tories have destroyed their economic credibility and damaged trust in the British economy,” she added.

“This is not over – it’s not just some distraction.

“The Tories need to reverse their whole economic, discredited trickle down strategy.

“Their kamikaze Budget needs reversing now. As the party of fiscal responsibility and social justice, it will come to the Labour Party to repair the damage this Tory government has done.”

Pound surged amid rumours of Government’s tax cut reversal

Monday 3 October 2022 08:00 , Lydia Chantler-Hicks

The pound surged higher in overnight trading on Monday as reports emerged that the Government would U-turn on the decision to axe the 45p tax rate.

Sterling hit 1.125 US dollars at one stage, recovering back to levels seen before the mini-budget, though it pared back some of the gains in early morning trading to stand at 1.119.

The market turmoil following Kwasi Kwarteng’s mini-budget had seen the pound fall to an all-time low of 1.03 US dollars.

U-turn ‘humiliating’ and ‘too late for mortgage owners’, says Lib Dem leader

Monday 3 October 2022 07:58 , Lydia Chantler-Hicks

Lib Dem leader Ed Davey has branded the Government’s abrupt U-turn over income tax cuts “humiliating” - adding it is “too late” for mortgage owners who have suffered during the recent economic turmoil.

“This humiliating U-turn comes too late for the millions seeing their mortgage rates soar because of this botched budget,” he said.

“The Conservatives must now cancel their conference and recall Parliament, to sort out this mess for the sake of the country.

“The corporation tax cut and the bankers bonus rise need to be scrapped and we need a clear plan to help mortgage borrowers cope with eye-watering interest rate rises. It can’t be right that big banks and huge companies will see their taxes slashed while people struggle to pay the bills.

“Every day it becomes clearer this Conservative government has no plan, no clue and is completely out of touch.”

‘We get it and we have listened’ says Prime Minister

Monday 3 October 2022 07:55 , Lydia Chantler-Hicks

Tweeting at 7.50am, while the Chancellor was doing a media round with broadcasters in Birmingham, Liz Truss wrote: “We get it and we have listened. The abolition of the 45pc rate had become a distraction from our mission to get Britain moving.

“Our focus now is on building a high growth economy that funds world-class public services, boosts wages, and creates opportunities across the country.”

‘U-turn was joint decision by PM and Chancellor’

Monday 3 October 2022 07:52 , Lydia Chantler-Hicks

Kwasi Kwarteng suggested he told Liz Truss they needed to U-turn on the abolition of the top rate of income tax for the highest earners.

The Chancellor first told BBC Breakfast that “the Prime Minister decided not to proceed with the abolition of the rate”.

When pressed if it was her U-turn, he said: “No, we talked together, I said this is what I was minded to do and we decided together, we were in agreement that we wouldn’t proceed with the abolition of the rate”.

He later added: “The conversation about the 45p rate was this terrible distraction really from what was a very, very strong plan and I’m very pleased that we’ve decided not to proceed with that because it was drowning out the elements of an excellent plan.”

Mr Kwarteng defended the delay on the reversal, saying: “We can always have a debate about when we could’ve made the decision but the important thing is we’ve made the decision and we can now move forward with making the push for the growth plan.”

Shapps welcomes U-turn over cut to higher income tax

Monday 3 October 2022 07:51 , Lydia Chantler-Hicks

Conservative former Cabinet minister Grant Shapps said he was “pleased” to see the Chancellor acknowledge abolishing the 45p top rate of tax was the “wrong move”.

Mr Shapps was speaking on air on BBC Breakfast when the Chancellor confirmed the U-turn, and on hearing the statement said: “Those are exactly the right words. I actually saw him last night. I encouraged him to say, ‘look we understand, we get this, sometimes you just get things wrong’.

“This was a mini-budget which was done incredibly quickly… I’m very pleased to see him acknowledging that they understood it was the wrong move and fixing that problem.”

Asked if the Chancellor’s position is secure, Mr Shapps said: “I leave positions and things to the Prime Minister and the Chancellor to…”

Being interrupted and asked if Mr Kwarteng is going to be Chancellor at the end of the year, Mr Shapps said: “I want this Government to succeed, right, so I hope that this actually solves this problem and we can move on. That’s what I want to see happen, and I think he’s done the right thing this morning.”

Asked how damaged Prime Minister Liz Truss was over the embarrassing reversal, he said: “I want the Prime Minister to survive. I want the Conservatives to win the next election. I think the Prime Minister herself has acknowledged that this was rushed into, that the communications behind it were nowhere near good enough.

“There was a belief if you like, that as long as the policy worked out, to hell with everything else, that is not the real world because in the real world, the perception of the values the core beliefs of a government are important.”

Kwarteng: ‘I’m not considering resigning'

Monday 3 October 2022 07:47 , Lydia Chantler-Hicks

Asked where the U-turn had left his credibility, Kwasi Kwarteng said: “We are 100% focused on the growth plan.”

The Chancellor told BBC Breakfast: “I have been in Parliament for 12 years, there have been lots of policies which, when government listens to people, they have decided to change their minds.”

Asked if it had considered resigning over the backlash to his controversial economic plan, he said: “Not at all. What I am looking at is the growth plan and delivering what is a radical plan to drive growth in this country, to reduce taxes, to put more money that people earn in their pockets.”

Pressed on whether the 45p abolition had been a mistake, he said: “What I admit was it was a massive distraction on what was a strong package.”

He added: “People were concerned about it, and we listened to those concerns.”

Chancellor: ‘I saw the reaction to tax cut - I get it’

Monday 3 October 2022 07:43 , Lydia Chantler-Hicks

The Chancellor has explained his decision to abruptly U-turn on plans to cut higher income tax, saying “I saw the reaction - I get it”.

“We talked to lots of colleagues, we talked to a lot of people up and down the country, I saw the reaction - I get it -and I’ve decided aong with the Prime Minister not to proceed with the aboloition of the rate,” he told BBC Breakfast.

“This 45p rate was simply a distraction in our mission to drive higher growth.”

Chancellor U-turns on cut to higher tax rate

Monday 3 October 2022 07:27 , Lydia Chantler-Hicks

The Chancellor has announced an abrupt U-turn on his plan to scrap the higher rate of income tax, following widespread backlash including from former Tory ministers.

U-turn over cut to higher tax rate ‘inevitable’, says Shapps

Monday 3 October 2022 07:25 , Lydia Chantler-Hicks

Conservative former Cabinet minister Grant Shapps said cutting the 45p tax rate “could never have worked”.

Speaking to BBC Radio 4’s Today programme amid speculation the Government will U-turn on the proposal to cut the top rate of tax, Mr Shapps said: “I sensed that things were moving very rapidly last night. Frankly, it was inevitable.

“And I think you know the idea that you could whip everybody into line or delay this until next spring and change the outcomes, which was one of the suggestions, a couple of the suggestions yesterday, completely untrue. This could never have worked.”

‘We must not be dictated by short-termism’, says fuel group boss and Tory donor

Monday 3 October 2022 07:22 , Lydia Chantler-Hicks

Asked about the Chancellor’s expected U-turn on BBC Radio 4’s Today programme, Alasdair Locke, chairman of petrol station operator Motor Fuel Group and a Conservative Party donor, warned against being “dictated against short-termism”.

“I think it would be unfortunate [for the Government’s economic plan] to be blown off course by a sort of rather sensational media,” he said.

“The presentation was very poor, it’s the right direction of travel however, and generally cutting taxes when you’re facing an economic downturn if not a recession seems to me to be a pretty obvious thing to do rather than to raise taxes. The 40% to 45% rate is a bit of a distraction. It doesn’t raise much money.”

He said scrapping the cut to higher income tax - which the Chancellor is expected to do this morning in an abrupt U-turn - would be “very minor” when compared with the overall package planned by the Government.

But he warned: “I think we should be, as a party and as a Government, we should be careful about having what we do dictated by short-termism, by media reaction, by market reaction, which is not necessarily rational.”

Chancellor U-turn statement due shortly

Monday 3 October 2022 07:04 , Lydia Chantler-Hicks

Kwasi Kwarteng is expected to deliver a statement at around 7.30am, reversing plans to abolish the 45p top rate of income tax.

The tax cut - announced when the Chancellor unveiled his so-called ‘mini-budget’ 10 days ago - has prompted widespread backlash including among top Tory MPs who have called it “politically tin-eared” and a “display of the wrong values”.

Mr Kwarteng had been planning to insist at the Conservative conference in Birmingham today that his party “stay the course” and back his plan for tax cuts, but a statement is now expected on Monday morning ahead of his appearance on the broadcast round.

Monday 3 October 2022 06:48 , Lydia Chantler-Hicks

Good morning. Today is Monday, October 3 and we are covering the fallout from the Chancellor’s mini-budget as rebellion grows among Tory MPs over the planned cuts to the higher rate of income tax.

Later today, as disquiet simmers among Tory MPs, Chancellor Kwasi Kwarteng is due to give a hotly anticipated speech to Tories gathered for the Conservative Party Conference.

The Chancellor is expected to defend his plan, telling the party it “must stay the course” to avoid a future of “slow, managed decline”.

Stay tuned for the latest updates throughout the day.