Monday 3 October 2022 09:00 PM Is Kwasi Kwarteng about to perform his second U-turn in 24 hours? trends now

Kwasi Kwarteng is expected about to bring forward his fiscal plan to tackle Britain's enormous £2.4trillion debt mountain this month from November 23 - after laughing off the Government's humiliating climbdown on its proposed 45p tax cut amid backlash at the mini-Budget.

The Chancellor earlier quipped 'what a day' as he started his address to the party faithful in Birmingham - before appealing for them to 'move on' with 'no more distractions'.

His appearance came after a tumultuous 24 hours in which the Chancellor and Prime Minister Liz Truss had first defended their decision to abolish the 45p top income tax rate and then capitulated in the face of widespread opposition and reinstated it.  

Mr Kwarteng has had to tear up his text after the intense political drama overnight that saw him drop the commitment for people earning more than £150,000 a year, after it became clear dozens of MPs would refuse to back the move in the Commons.   

The bombshell decision was apparently made in a late-night meeting with the PM in her hotel suite at the party conference - with the news swiftly leaking out. Official confirmation came at 7.25am, with Mr Kwarteng tweeting: 'We get it and we have listened.' 

But watched by the PM, he swiftly went on the attack this evening as he swiped at the 'slow managed decline' under his predecessor Rishi Sunak. 

'What a day. It has been tough but we need to focus on the job in hand,' he said.

'We need to move forward. No more distractions. We have a plan and we need to get on and deliver it. That is what the public expect from the Government.'

He sought to portray the Conservative Party as 'serious custodians of the public purse', saying: 'There is no path to higher sustainable growth without fiscal responsibility.

'Conservatives have always known this and we know it still. And it is because we are Conservatives that we remain absolutely committed to being serious custodians of the public purse. This is what defines us and separates us from the Labour Party.'

The scale of the problem facing the party was laid bare tonight when a new poll by Savanta ComRes gave Labour a 25-point lead, though it was conducted before today's U-turn.

 The critical day for Ms Truss's fledgling government came after:

As he fights to draw a line under the bitter tax row with backbenchers, Mr Kwarteng said he knew it had generated 'turbulence'.

'I can be frank. I know the plan put forward only 10 days ago has caused a little turbulence,' he said.

'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.'

Mr Kwarteng said he refuses to accept that 'it is somehow Britain's destiny to fall back into middle league status'.

He said: 'The Industrial Revolution was one of the most monumental transformations in human history. And it began here with determination and application. Those Britons built a thriving economy. They inspire me today. They remind us that in Britain with the British people, absolutely anything is possible.

'Our plan today focuses on the same bold sentiment, the same inspiration to deal with the challenges of today by giving people the tools they need to thrive tomorrow, to get Britain moving.'

He added: 'We have great ideas, we have the same inspirational people and I know we have the same determination.

'Our growth plan set out 10 days ago will ensure we focus relentlessly on economic growth. Because we must face up to the fact that for too long, our economy has not grown enough.

'The path ahead of us was one of slow, managed decline. But I refuse to accept that it is somehow Britain's destiny to fall back into middle league status or that the tax burden reaching a 70-year high is somehow inevitable. It isn't and it shouldn't be.'

In a bruising round of interviews this morning, Mr Kwarteng admitted the row over the 45p rate had been 'drowning out' the details of a 'strong package'.

Mr Kwarteng insisted he had not considered resigning and refused to use the word 'sorry', but said: 'There is humility and contrition... I am happy to own it.' 

He also dodged as he was pressed on whether there could be more rethinks about the mini-Budget plans, as MPs ramped up the pressure on the government. Rebel ringleader Michael Gove suggested he would still vote against any plan that involved a real-terms cut in benefits, while former Cabinet minister Stephen Crabb warned the volte face did not completely 'draw a line' under the row. Another senior Tory, Esther McVey, said it would be a 'huge mistake' not to increase benefits in line with inflation.

Liberal Democrat Treasury spokeswoman Sarah Olney said: "Laughing about the turbulence caused by this botched budget is an insult to the millions of people already facing spiralling mortgage costs.

"Kwasi Kwarteng's fiscal failure saw the economy tank and mortgage rates go through the roof, his words will bring cold comfort to struggling families and pensioners.'

Downing Street said the PM had full confidence in the Chancellor. However, Ms Truss abruptly cancelled a joint visit they were meant to be doing in the Midlands. And Deputy PM Therese Coffey has pulled out of a health-related fringe event.

Mr Kwarteng is also engaged in a spat with Truss ally Gerard Lyons. After Mr Kwarteng told the BBC that he could not recall the economists warning him unfunded tax cuts could cause a market meltdown, he retorted: 'Well that's incorrect. I was very clear.' 

The Pound surged nearly a cent against the dollar to $1.12 on the news, although it drifted down again afterwards. That is close to the level it was before the mini-Budget was announced on September 23 - sending it to an all-time low of $1.03. 

The huge shift followed Mr Gove and Grant Shapps putting themselves at the head of the rebellion, warning the measure would be a 'massive distraction' and politically toxic with ordinary voters.

Only yesterday Ms Truss took to broadcast studios to defend the plan and deny there would be a rethink - although she was also accused of throwing Mr Kwarteng 'under the bus' by saying he had made the decision to go ahead. 

Chief Secretary Chris Philp was among the other ministers who had spoken enthusiastically about the tax proposal, insisting he would give the Budget '9.5 out of 10' despite ensuing chaos on the markets.

But he claimed today that it was 'not my idea'.  

Mr Shapps had lambasted the idea as 'politically tin-eared' while sources claimed Ms Truss 'could be gone by Christmas' unless she backed down to 'livid' MPs.

Ms Truss tweeted this morning: '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.'

Mr Shapps said cutting the 45p tax rate 'could never have worked'. 'I sensed that things were moving very rapidly last night. Frankly, it was inevitable,' he told BBC Radio 4's Today programme.

'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.'

Mr Kwarteng now faces the indignity of rewriting his first conference speech as Chancellor, having briefed journalists that he would vow to 'stay the course' with his plans.

He was due to say that years of economic policy consensus have left Britain in a state of 'slow, managed decline' that must be reversed.

Paul Johnson, the director of the Institute for Fiscal Studies think-tank, said the reversal of the policy that would have cost £2billion a year was only a 'rounding error in the context of public finances'.

With around £43billion of unfunded tax cuts remaining, Mr Johnson warned: '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.' 

The decision over benefit levels looks set to be the next battleground for Ms Truss and Mr Kwarteng.

Mr Gove told Times Radio that he would 'need a lot of persuading' to support a Government that abandoned the commitment to uprate benefits in line with inflation.

And in a sign of wider anger in the party, former culture secretary Nadine Dorries suggested Ms Truss would need to call an election if she deviated from plans set out by Boris Johnson's government.

There is 'widespread dismay at the fact that three years of work has effectively been put on hold', she said.

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

The chances of a Commons revolt diminished, with former Cabinet minister Michael Gove suggesting he could now support the package and fellow potential rebel Grant Shapps welcoming the U-turn.

Asked if he would now vote for the rest of the package, Mr Gove told Times Radio: 'Well yeah I think so on the basis of everything that I know.'

Mr Shapps, a former transport secretary and a renowned strategist, told BBC Breakfast: 'I'm very pleased to see him acknowledging that they understood it was the wrong move and fixing that problem.'

Speculation spread like wildfire in Birmingham last night about the U-turn – the price of shoring up Tory support for the rest of the mini-Budget measures.

As many as 70 Tory MPs were considering voting against the policy and are now pushing Ms Truss to delay scrapping the 45p rate for a year, one insider alleged. 

There was no reason for the government to hold a vote on the 45p rate before the fiscal statement due on November 23, as the abolition was not set to happen until April. 

Cabinet ministers told MailOnline they expected the key clash on the Finance Bill to happen in December or even January. 

The parliamentary process means that a resolution must be passed within 10 sitting days, but it does not need to cover all the tax measures in a package. The Finance Bill then has to received its second reading from MPs - the crunch vote - within 30 days. 

However, Labour could have forced a vote on an Opposition Day motion, which the government might have struggled to ignore. Tory rebels had been considering siding with Labour.

Chief Secretary to the Treasury Chris Philp squirmed as he was grilled on the U-turn in interviews this morning, amid rumours No10 want to make him the scapegoat for coming up with the idea in the first place.

Challenged on whether he came up with the plan, Mr Philp said: 'I wouldn't describe it as my idea, no.' 

Mr Philp insisted there was a 'strong economic case' for axing the 45 per cent tax rate, even after the Chancellor's U-turn.

He told Sky News it would help the UK's 'international competitiveness', but added: 'It has become very clear over the last few days that the public and parliamentary opinion don't like the idea for a variety of reasons and so we

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