Kwarteng refuses to resign after Tory MPs force tax u-turn

The move, which is thought to have come late on Monday night, following discussions between the Chancellor and Liz Truss, came after more than a dozen Tory MPs publicly criticised the plans.

The plan to abolish the 45 per cent rate of tax on earnings over £150,000 in his budget last month has become one of the most unpopular measures of the Government’s Plan for Growth.

Asked if he considered resigning, Mr Kwarteng told BBC Breakfast: “Not at all,” before claiming that the Prime Minister agreed to withdraw the policy after he 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”.

The Chancellor also revealed to the BBC that there will be “no tax cuts” ahead of the next budget, despite suggestions that there is “more to come”.

Both he and Chris Philp, the Chief Secretary to the Treasury, confirmed that the rest of the Chancellor’s mini-budget is “all staying”.

In his speech to Conservative Party conference in Birmingham yesterday, which was hastily re-written following the u-turn last night, he attempted to shrug off events by describing them as a “little turbulence”.

The Chancellor remarked it had been a “tough” day as he told Conservative members in his set-piece conference speech on Monday to “focus on the task in hand”.

With the Prime Minister in the audience, Mr Kwarteng told the conference: “What a day. It has been tough but we need to focus on the job in hand.

“We need to move forward, no more distractions, we have a plan and we need to get on and deliver it.”

Making light of the chaos in a 20-minute speech containing no new policies, he said to muted laughter from party members: “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.”

However, the u-turn seems to have quelled a potential mutiny on the Tory backbenches after senior MPs came out to criticise the plan.

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.”

Senior Conservative MP Mel Stride welcomed the Government’s U-turn but said the main economic issues have not gone away and there may be “further requirements to unwind” some of the Government’s plans on tax cuts.

However, some Tories suggested that the damage to the party’s credibility may have been severe enough that it will take months of work to rebuild the public’s trust.

Damian Green, a former deputy prime minister, told a fringe event at Conservative conference: “But the price we pay is it needs six, maybe 12 months of hard work to make sure this Government is seen as competent.”

A second 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.”

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”.