UK Treasury Secretary Kwasi Kwarteng announces a humiliating reversal of his plan to scrap the 45 percent tax rate for top earners

UK Treasury Secretary Kwasi Kwarteng has abandoned his plan to scrap the 45p tax rate on top earners after a Tory revolt in a humiliating about-face at the Conservative Conference.

Just 24 hours after Britain’s Prime Minister Liz Truss insisted the cut would go ahead – for Britain’s richest people who earn more than £150,000 – the Chancellor has backed down under intense pressure.

“We understood and we listened,” said Mr. Kwarteng.

He called the 45p rate cut “a distraction from our overarching mission of addressing the challenges facing the country”.

The reversal comes after conservative big-hitters Michael Gove and Grant Shapps opposed giving huge rewards to the rich while slashing benefits in real terms.

As the Tory revolt grew, the likelihood grew that the plan would fail in the House of Commons – although the vote was not postponed until next year.

The descent will raise new questions about Mr Kwarteng’s future after Ms Truss told the BBC the 45p rate cut was his idea alone.

Mr Kwarteng sent shockwaves through financial markets when on September 23 he published a mini-budget cutting taxes, including the top income tax rate of 45p, in a “growth plan” to be funded by huge government bonds.

The government had stuck by the policy even as the value of sterling and government bonds fell, but several senior lawmakers stepped up their opposition at the party’s annual conference which begins on Sunday.

On Sunday, former minister Michael Gove, who has long been at the heart of government, hinted he could vote against tax cuts for the rich.

Kwarteng had planned to tell the conference on Monday that the government “must stay the course” and he was confident the plan was the right one, according to excerpts released in advance by his team.

But this morning the BBC said the government was likely to drop the plan.

https://www.independent.ie/news/british-finance-minister-kwasi-kwarteng-announces-humiliating-u-turn-on-his-plan-to-axe-45pc-tax-rate-for-top-earners-42034982.html UK Treasury Secretary Kwasi Kwarteng announces a humiliating reversal of his plan to scrap the 45 percent tax rate for top earners

Fry Electronics Team

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