Kwasi Kwarteng U-turns on plan to axe 45p tax rate for higher earners
It follows 10 days of market turmoil after the Chancellor's mini Budget.
Kwasi Kwarteng has U-turned on plans to scrap the 45p rate of income tax for the UK’s highest earners.
The sudden change of heart comes just 10 days after the Chancellor unveiled his mini Budget, which has led to 10 days of market turmoil and fierce pressure from within the Conservative party.
Just yesterday, Prime Minister Liz Truss insisted that the tax cut, which would benefit Brits earning more than £150,000, would go ahead.
Mr Kwarteng said that the proposals had ‘become a distraction’ in a statement released this morning.
Given that his Growth Plan has been labelled a ‘Kami-Kwase Budget’, that would seem to be an understatement.
“We get it, and we have listened,” he wrote.
His statement says: “From supporting British business to lowering the tax burden for the lowest paid, our Growth Plan sets out a new approach to build a more prosperous economy.
“However, it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.
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“As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened.
“This will allow us to focus on delivering the major parts of our growth package.
“First, our Energy Price Guarantee, which will support households and businesses with their energy bills.
Second, cutting taxes to put money back in the pockets of 30 million hard-working people and grow our economy.
“Third, driving supply side reforms – including accelerating major infrastructure projects – to get Britain moving.”
Mr Kwarteng’s U-turn on the 45p tax cut policy has been described as ‘humiliating’ and comes on the second day of the Tory party conference in Birmingham.
Former Transport Secretary Grant Schapps said: “Strongly welcome today’s 45p tax reversal. Sensible & pragmatic.
“Conservatives want lower tax, but let’s show our energy price cap + other policies are on side of consumers rather than borrowing to cut high earner taxes first.”
Piers Morgan said: “Tories to U-turn on 45p tax rate cut. Humongous humiliation for @trussliz @KwasiKwarteng and worse possible start to their conference. She’ll have to sack him, surely?”
Featured image: ParliamentTV