Jacob Rees-Mogg said the Government's U-turn on the income tax cut was the result of "political reality" as he insisted Kwasi Kwarteng should not resign as Chancellor.
The Business Secretary said there had been "sound and fury that signifies nothing" over the decision not to go ahead with the plans to scrap the 45p additional rate.
He told The Telegraph's Chopper's Politics podcast at Conservative Party conference that the Government had no choice but to change tack because the "political reality" was that the policy had not been well-received.
Asked if Mr Kwarteng should now quit, Mr Rees-Mogg said: "No, of course he shouldn't resign."
The Business Secretary said that "these things happen" as he argued that politicians need to be prepared to take risks: "The alternative is complete inertia."
Follow the latest updates below.
'Nothing like a good winter election is there?'
Nadine Dorries, the former culture secretary, suggested earlier today that Liz Truss should consider calling a general election in order to secure a mandate for her plans (see the post below at 12.38).
Jacob Rees-Mogg, the Business Secretary, was asked if he agreed with Ms Dorries.
He said that there is "no constitutional requirement for a new election".
Asked when the next general election is likely to be, he said there is a deadline for calling one of January 1, 2025.
He added: "Nothing like a good winter election is there?"
Main parts of mini-Budget are 'intact'
Jacob Rees-Mogg, the Business Secretary, was asked if the Government could ditch its plans to lift the cap on bankers' bonuses.
Speaking more broadly about the mini-Budget overall, Mr Rees-Mogg said that "the policy has been set out... the main parts of it are intact".
He said that different views from Tory MPs are "extremely welcome".
Lord Heseltine: 'Whole structure of Whitehall' should be reformed
Tony Diver, The Telegraph's Whitehall correspondent, is currently watching a conference fringe event hosted by the European Movement. He writes:
Liz Truss should cut public spending by reducing the number of local authorities in the UK and limiting the number of civil servants who can be hired, Lord Heseltine has said.
He said he would cap the “replacement rate” of civil servants at 80 per cent - so only eight officials can be hired when ten leave.
The “whole structure of Whitehall” should also be reformed and Britain’s 300 local authorities should be slimmed down to create a “massive saving”.
The Tory grandee also said the “levelling up agenda” could have been inspired by the development corporations he established after Margaret Thatcher took office in 1979.
Jacob Rees-Mogg wants more workers back in offices
Jacob Rees-Mogg said that if the UK wants to see economic growth and greater productivity then more people need to "get back to their offices and that is very important".
The Business Secretary told Chopper's Politics that "there is a carrot currently for working from home" in the form of tax relief.
It sounds like Mr Rees-Mogg would like to see those tax arrangements changed but he insists such things are matters for the Treasury.
Jacob Rees-Mogg orders quarter pounders at McDonald's
Jacob Rees-Mogg, the Business Secretary, is said to enjoy a McDonald's burger whenever he attends a Conservative Party conference.
Asked if he has had one yet in Birmingham, Mr Rees-Mogg said no. Asked what he normally orders he said a quarter pounder but he "picks out the muck". Mr Rees-Mogg made plain that he does not like gherkins.
Jacob Rees-Mogg 'would allow fracking in his garden'
Jacob Rees-Mogg said he would be "delighted" to allow fracking in his own garden "particularly if I get these royalties" which come come with it (like money off energy bills).
Asked if everyone else should allow fracking in their gardens or local areas, the Business Secretary said: "Yes, of course they should."
'Governments cannot command growth'
Jacob Rees-Mogg was asked when the nation can expect to see economic growth resulting from the mini-Budget.
The Business Secretary said: "Governments cannot command growth any more than it can command the tide."
Michael Gove is a 'very elegant thorn'
Jacob Rees-Mogg was asked about Michael Gove seemingly becoming a "thorn in the side" to the new Government.
He joked: "Who? I have met him, yeah. He is very clever I think. Very charming."
The Business Secretary said: "You are always saying with Michael 'what did he mean by that' and it is usually very interesting."
Mr Rees-Mogg said that if Mr Gove is a "thorn" he is a "very elegant thorn".
Tories 'lost their senses' by ousting Boris Johnson
Jacob Rees-Mogg, the Business Secretary, said he believed the parliamentary Conservative Party had "lost its senses" when it moved to oust Boris Johnson.
Mr Rees-Mogg said that the party now has a "first class" replacement in Liz Truss.
Governments 'sometimes get difficult poll ratings'
Told that there has been a seven point polling swing to Labour in the last week and that Labour is on course for a landslide election victory, the Business Secretary said that opinion polls change.
He said: "This is what happens to governments that are making decisions, they sometimes get difficult poll ratings."
He told Tory activists that politicians and journalists are "all obsessed with opinion polls... but you have got to have a sense of proportion".
Jacob Rees-Mogg: Chancellor should not resign
Asked if Kwasi Kwarteng should now resign as Chancellor, Jacob Rees-Mogg said: "No, of course he shouldn't resign."
The Business Secretary said that "these things happen" as he argued that politicians need to be prepared to take risks.
"The alternative is complete inertia," he told Chopper's Politics.
'There has to be flexibility'
Jacob Rees-Mogg compared the U-turn on income tax to the so-called "pasty tax" U-turn back in 2012.
He argued that changing course can actually be a virtue.
"There has to be flexibility, a responsiveness to public opinion," he said.
Jacob Rees-Mogg blasts 'sound and fury' over 45p U-turn
Jacob Rees-Mogg, the Business Secretary, was asked if the Conservative Party is still a tax cutting party after today's U-turn.
He replied: "Yes.... this is a tax cutting government."
He said the income tax plan was the smallest part of the mini-Budget.
Speaking about the row over the 45p rate, Mr Rees-Mogg said there has been "sound and fury that signifies nothing".
He said the policy has been dropped because the "political reality" is the policy has not been well-received by the nation.
Jacob Rees-Mogg arrives
Jacob Rees-Mogg, the Business Secretary, has now arrived at the PLMR Business Hub at Conservative Party conference in Birmingham for the Chopper's Politics event.
We should be underway imminently.
Jacob Rees-Mogg set for grilling on Chopper's Politics
Jacob Rees-Mogg, the Business Secretary, is set to take part in a Chopper's Politics podcast event hosted by The Telegraph at Conservative Party conference in Birmingham.
It is a particularly hot ticket - just about all of the seats have now been filled but there is still a large queue of people waiting outside.
The event is due to get underway just after 1pm and I am in the room (well, actually a tent) to provide you with all of the key updates.
Ex-Cabinet minister suggests PM should call election
Nadine Dorries, the former Cabinet minister, has 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.
She tweeted: “Widespread dismay at the fact that three years of work has effectively been put on hold.
“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.”
No 10: Chancellor's medium term plan still set for November 23
Kwasi Kwarteng’s medium-term fiscal plan is still scheduled for November 23, Downing Street has said.
Asked when details of the Chancellor's proposed supply side reforms will emerge, the Prime Minister's Official Spokesman said: “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.”
Watch: The impact of Kwasi Kwarteng's 45p tax cut U-turn
Pictured: Jacob Rees-Mogg arrives for day two at conference
No 10: PM has confidence in Chancellor
Liz Truss continues to have confidence in Kwasi Kwarteng as Chancellor following the tax U-turn, Downing Street has said.
Asked if Ms Truss has confidence in Mr Kwarteng, the Prime Minister’s Official Spokesman told reporters: “Yes.”
'Keep your phone on... you might be the next chancellor'
A Conservative former Cabinet minister has joked that Kwasi Kwarteng could be sacked.
Speaking at a conference fringe event in Birmingham, 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.”
Lady Morgan also said that “what the business world wants above all else is stability” as she told the Government: “So please, no more political crises. Actually just a period of calm, confident government would be much appreciated by the business world.”
Watch: Kwasi Kwarteng defends tax cut U-turn
Michael Gove: Benefits should rise in line with inflation
Michael Gove has warned the Government that benefits should rise in line with inflation next year.
Asked if he supported Boris Johnson's previously-stated position that benefits should rise in line with inflation, the former Cabinet minister told Times Radio: “Yeah. That would be my view, but I'm not in the box seat in No 11.”
He continued: “I would need a lot of persuading to move away from that. But I wouldn't want to prejudge an argument that was put in front of me before the argument was made.
“Because in crises, you sometimes have to do things and embrace policies that would in other circumstances be deeply unattractive. But my basic position, my starting position is, yes, Boris was right."
Labour applies pressure over benefits rise
Rachel Reeves, the shadow chancellor, has said it would be “grotesque” not to increase benefits in line with inflation.
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."
Ministers have so far refused to guarantee that benefits will rise in line with inflation next year, insisting the decision is yet to be taken.
'U-turn exactly right thing to do'
The U-turn on abolishing the 45p tax rate “vitiates” the image of the Conservatives as the party of the rich, Damian Green has said.
The chairman of the One Nation Conservatives group, who was de facto deputy prime minister under Theresa May, told a fringe meeting at the Conservative Party conference: “I think this U-turn is exactly the right thing to do.”
But he added that the party had to be on “a journey” to demonstrate its competence.
He said: “But the price we pay is it needs six, maybe 12 months of hard work to make sure this Government is seen as competent.”
Tory Mayor calls for rethink on bankers' bonuses
Will the 45p tax cut be the only mini-Budget U-turn? It is a question many people at Conservative Party conference in Birmingham are asking this morning.
Reports suggest the Government could face pressure to also ditch its plans to lift the cap on bankers' bonuses.
Aubrey Allegretti, a political correspondent at The Guardian, reports that Ben Houchen, the Conservative Mayor of Tees Valley, is opposed to the policy. Here's the tweet:
New: Tory mayor Ben Houchen calls for govt to go further and U-turn on lifting the cap on bankers' bonuses too.
He says it's "unnecessary" and the "wrong time".
— Aubrey Allegretti (@breeallegretti) October 3, 2022
Michael Gove says he can now vote for mini-Budget
Michael Gove yesterday declined to say if he would vote for the mini-Budget if it included the 45p income tax cut.
Asked if he could now vote for the rest of the package following the U-turn, he said: “Well, yeah, I think so, on the basis of everything that I know.”
Michael Gove welcomes U-turn
Michael Gove has been the leading Tory voice against the 45p tax cut.
He welcomed the U-turn and said Kwasi Kwarteng was "wise" to have changed tack.
Told that he had helped to force Mr Kwarteng into making the move, Mr Gove told Times Radio: “I think I myself when I was a minister… have had to change, adapt, or drop, policies and it is always better to get ahead of things.
"I think Kwasi was absolutely right to recognise for the reasons that he stated, in fairness, that this was not the right tax cut, certainly not the right tax cut at this time and that other elements of the growth plan were more important and it was wise, I think, and right of him to make that change, to have listened and that means that actually he can wrest back control of the agenda for things that he really wants to talk about.”
'It has been a pretty hairy 24 hours'
Michael Gove, the former Cabinet minister, has said the last 24 hours in Birmingham have been a “rollercoaster ride”.
Asked if he could remember a Tory conference which has started as “disastrously” as this one, Mr Gove told Times Radio: “I think it is always the case that in the first day, in the weekend going into any party conference, there is always a period of turbulence.
“It is a bit like landing at Hong Kong Airport - you get the crosswinds but then as the week goes on, once the plane has landed, once ministers get into their rhythm then the tempo and the nature of things change.
“But I have to say as turbulence goes, it has been a pretty hairy 24 hours.”
Timeline: How the 45p tax cut was announced - and ditched
September 23: In a “rabbit out of the hat” surprise at the mini-Budget, Kwasi Kwarteng announces he is scrapping the 45p top rate of income tax. The mini-Budget prompts the pound to fall to a fresh 37-year low.
September 25: The Chancellor is accused of further stoking the flames of financial chaos by saying there is “more to come” when questioned about future tax cuts.
September 26: After a weekend off, panicked trading resumes and sterling plunges to a record low against the dollar as the price of Government borrowing soars as investors dump UK bonds.
September 27: The International Monetary Fund (IMF) issues an extraordinary intervention, urging the Chancellor to “re-evaluate the tax measures” and warning the mini-Budget is likely to increase inequality.
September 28: The pound takes another hammering while the FTSE 100 of top companies on the London Stock Exchange falls sharply. Labour leader Sir Keir Starmer tells the Government to recall Parliament to allow Mr Kwarteng to abandon his strategy “before any more damage is done”.
September 29: A shock poll gives Labour a massive 33-percentage point lead over the Conservatives. Liz Truss and Mr Kwarteng are adamant their vision is the “right plan”.
October 2: Ms Truss replies “yes” when asked on the BBC’s Sunday With Laura Kuenssberg programme if she is absolutely committed to abolishing the 45p tax rate.
October 3: Mr Kwarteng issues a statement at 7.25am saying the cut has become a “distraction” and the Government they will be U-turning: “We get it, and we have listened.”
Comment: 'Liz Truss has become another Theresa May'
Ross Clark has argued in a piece for The Telegraph today that Liz Truss's premiership is now "much more reminiscent of the Theresa May era than Mrs Thatcher":
A week ago, Truss and Kwarteng seemed set – at least on the taxation side – on setting a new course for the UK economy, one which was unashamedly biased towards growth.
Instead, we find ourselves with a rudderless Government being blown around by media opinion and the views of a few backbenchers. Much more reminiscent of the Theresa May era than Mrs Thatcher.
The proposal to abolish the 45 pence rate may have gone – but sadly the economic rocks are still very much around us.
You can read the full piece here.
Andy Street welcomes tax cut U-turn
Andy Street, the Tory Mayor of West Midlands, said he is glad Liz Truss and Kwasi Kwarteng have been "brave enough to think again".
He told The Telegraph: “I have been on the record as an opponent of the plan to cut the top rate of income tax so I welcome the Chancellor changing course. During these tough times for households right across the country, cutting tax for the most well off would have gone against any reasonable notion of fairness. I’m pleased the Government has been brave enough to think again.”
Kwasi Kwarteng's big day
Kwasi Kwarteng has had an eventful morning to say the least.
Now that he has announced the Government's income tax U-turn and completed a bruising morning media round, the Chancellor can now focus on what was supposed to be the main part of his day: His big speech in the main conference hall this afternoon.
The Chancellor is scheduled to deliver his conference speech just after 4pm. Safe to say it has rather been overshadowed by the U-turn.
'The Chancellor has lost all credibility and must resign now'
The Liberal Democrats have strengthened their position on Kwasi Kwarteng's future, with Sir Ed Davey now outright calling for the Chancellor to resign.
Sir Ed suggested in an interview earlier today that Mr Kwarteng should consider his position (see the post below at 10.03) but he has now said in a statement that the Chancellor "must resign now".
He said: “Kwasi Kwarteng didn’t listen when people’s mortgages soared, the pound tanked and the economy nosedived. Now he’s only acting because of internal rows at the Conservative party conference.
“It just shows the Conservatives are totally out of touch with the country. The Chancellor has lost all credibility and must resign now.
"Then Parliament needs to be recalled so we can scrap this rotten Budget, offer extra help to struggling mortgage borrowers and ensure our NHS and schools get the funding they need.”
U-turn shows 'this is a Government that will back down'
Paul Johnson, the director of the Institute for Fiscal Studies think tank, said in economic terms the 45p tax cut was probably the "smallest measure" in the mini-Budget, amounting to about five per cent of the total value of the overall package.
He told the BBC: "To the extent that what we saw a couple of weeks ago was leading to fiscal unsustainability, it still is, nothing really has changed.
"I think what has changed is perhaps a sense that this is a Government that will back down, that will listen, that will take opinion seriously."
Ex-minister 'very pleased' with U-turn
Robin Walker, a former minister, said the Government can now "focus on the wider plan to grow the economy" as he welcomed the U-turn on income tax.
He tweeted: "Very pleased that the Chancellor & PM have listened to the concerns of myself and other colleagues re scrapping the 45p rate, 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."
Sir Ed Davey: 'I think he has to go'
Sir Ed Davey, the leader of the Liberal Democrats, has suggested Kwasi Kwarteng should now resign as Chancellor.
He 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.”
Pictured: Liz Truss arrives at conference this morning
Think tank boss expresses concerns over U-turn
Mark Littlewood, the director general of the Institute of Economic Affairs, a free market think tank, expressed concerns about the U-turn.
He told the BBC: “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.”
He said the decision to drop the policy 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?”
'What a mess'
One veteran Tory sums up the feelings of many Conservative MPs and activists here in Birmingham this morning.
“What a mess," they said.
'A political cock-up beyond compare'
While many Tories in Birmingham are now in misery over Liz Truss’s U-turn on the 45p tax rate, no one is happier than the Labour Party.
“Liz Truss promised one thing - to steer the economy with a clear sense of direction,” said one senior party source with glee this morning.
“Within a month she has crashed it and now she’s trying to reverse out of the wreckage. It’s a political cock-up beyond compare.”
SNP: U-turn was 'inevitable'
Alison Thewliss, the SNP's shadow chancellor, said the Government's U-turn on the 45p rate was "inevitable" and people will "not forget" that Liz Truss and Kwasi Kwarteng "wanted to rob the poor to pay the rich".
She said: “The Tory budget has been a disaster. It was inevitable this morally repugnant and hugely expensive policy would have to be reversed - after doing so much damage to people’s mortgages, pensions and the UK economy.
“People in Scotland will not forget that Liz Truss and Kwasi Kwarteng wanted to rob the poor to pay the rich - and this U-turn will not distract from the fact they are still planning to impose a new wave of devastating Tory austerity cuts, which will hurt the poorest and threaten our NHS."
Ex-minister: U-turn 'pretty final' for Liz Truss as PM
One former minister said the 45p rate U-turn was “pretty final” for Liz Truss and that backbenchers were openly calling for her to leave Downing Street.
“The one thing about her was that she was determined. But now, like every other PM, she is just beholden to parliamentary numbers,” they told The Telegraph.
“This is the consequence of everything that has happened up to this point. If you do a reshuffle that p——— off two thirds of the parliamentary party followed by a budget no one likes, that will come back to bite you. There are MPs saying explicitly she has to go, but they also know that would look insane.
“This [mini Budget] is so distant from what we promised in the manifesto. So there are MPs sitting there thinking ‘well, if I don’t like it, I don’t have to vote for it’ and no one respects the Chief Whip. That’s pretty final.”
Ex-Cabinet minister: Truss 'isn't the right person to take us into next election'
Safe to say there are a lot of worried Tory MPs this morning.
A former Cabinet minister told The Telegraph: "The damage to the Conservative Party over this entirely self-inflicted mess is too big to just go away by this U-turn.
"First impressions matter and I don't think this will convince ordinary wavering Tory voters who were lukewarm in their support for us anyway. She isn't the right person to take us into the next election."
'The rest of it is staying'
Kwasi Kwarteng refused to rule out further mini-Budget U-turns this morning (see the post below at 08.21) but his Treasury colleague Chris Philp has now effectively done so.
The Chief Secretary to the Treasury Told Times Radio: "The rest of it is all staying.”
Mr Philp argued there was a "strong economic case" for getting rid of the 45p top rate of income tax but "it is very clear that public opinion doesn’t support it, it’s clear that parliamentary opinion doesn’t either".
'It's not about parliamentary games'
The decision to change course on the 45p tax rate was “not about parliamentary games or votes in the House of Commons” but about “getting people behind the measure”, Kwasi Kwarteng has said.
Asked on BBC Radio 4’s Today programme if the policy was still the right thing to do or whether he had scrapped it because he would be unable to get it through the House of Commons, the Chancellor 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.”
Analysis: Government's woes entirely self-inflicted
Not all government U-turns are created equal and today's is the biggest in recent political memory. It is hard to over-emphasise just how significant it is.
Reversing the decision to scrap the 45p top rate of income tax will have huge ramifications for Liz Truss's premiership and will significantly undermine the Government's credibility. All of No 10's efforts will now be focused on trying to steady the ship and stabilise things.
Many Tory MPs will be thrilled that the policy has been dropped but they will also be angry that they have been put in the position of having to defend the cut only for it to then be ditched.
The Government will now need to repair relations with those MPs who publicly criticised the initial policy after warning them they would lose the whip if they voted against the mini-Budget.
Downing Street has put itself in a disastrous position and the worst thing about it for Tory MPs is that it has been entirely self-inflicted.
No apology from Chancellor
Kwasi Kwarteng declined to apologise directly to the nation and to Conservative MPs who had been warned over their possible rebellion on the Government's tax plans.
Instead he told BBC Radio 4’s Today programme: “There’s humiliation and contrition and I’m happy to own it.”
Chancellor declines to repeat 'more to come' comment
Kwasi Kwarteng declined to repeat his pledge made two days after the mini-Budget that there is “more to come” on tax cuts.
He told BBC Radio 4’s Today programme: “There will be no tax cuts ahead of a Budget.”
He also did not rule out a new era of austerity to pay for the Government's other tax cuts.
He said: “You will see what our spending plans are in the medium-term fiscal plan but I’m not going to be drawn into that.”
Kwasi Kwarteng: Decision was 'simple'
Kwasi Kwarteng said the decision to scrap the top rate of income tax had become a "huge distraction" as he suggested it had actually been a "simple" decision to drop the policy.
Speaking to BBC Radio 4’s Today programme, Mr Kwarteng said: “On the 45p rate. It’s very simple. We talked to lots and lots of people up and down the country, we talked to lots of not only colleagues, MP colleagues, but also people, our voters, constituents, crucially people in the country, and I felt that the 45p rate was a huge distraction on what was a very strong set of measures.”
Tory MPs welcome 'sensible' U-turn
Some more reaction from Tory MPs:
Damian Green, the Tory former first secretary of state, welcomed the U-turn, tweeting: "This is very sensible. Thank you for listening."
Steve Double, the Tory MP for St Austell and Newquay, echoed a similar sentiment as he said: "Very welcome news and the right decision. Now we can move on together."
Cabinet ministers kept in the dark over U-turn
The decision to scrap the 45p tax rate abolition was taken late at night in a meeting in Liz Truss’s conference hotel suite, writes Ben Riley-Smith, The Telegraph's political editor.
Kwasi Kwarteng, the Chancellor, met the Prime Minister at the end of a long day of speeches and events defending the measure.
“It wasn’t worth the pain of keeping it”, a Number 10 source familiar with that discussion in the Hyatt at Birmingham said. “It had become a distraction from the brilliant stuff in the growth plan.”
Some Cabinet ministers who were never consulted before the initial move was taken were again in the dark about the decision to remove it. One Cabinet minister told The Telegraph they were only informed by a call around 7am this morning, just moments before Mr Kwarteng announced the change in public.
'With hindsight it probably wasn't the best day to go'
Kwasi Kwarteng was asked about his decision to attend a party with hedge fund managers after delivering the mini-Budget and he said with hindsight "it probably wasn't the best day to go".
Asked why he had attended the party, Mr Kwarteng told LBC Radio: "I spent I think quarter of an hour there, maybe a bit longer, and it was a party event. We have party events all the time, a Conservative Party event, which had been booked in for a few weeks actually.
"As you remember, it was a very difficult time because we had Her Majesty's passing, we had the funeral, there were dates moving around and the date of that seemed to coincide with the mini-Budget."
Asked if with the benefit of hindsight it was a good decision to attend, he said: "I think it was a difficult call and I totally get how it looks and I just feel that it was something that I was signed up to do and I had to do."
Asked again if it was a smart move, he said: "With hindsight it probably wasn't the best day to go."
Kwasi Kwarteng unable to rule out further U-turns
Kwasi Kwarteng, the Chancellor, was asked three times to rule out further mini-Budget U-turns but he refused to do so.
Asked if there will be more U-turns, potentially on the decision to lift the cap on bankers' bonuses, Mr Kwarteng told LBC Radio's Nick Ferrari: "I have said what I have said about the 45p rate and I am totally focused on delivering the growth plan."
Asked for a second time, Mr Kwarteng said: "We are totally focused on delivering the growth plan."
Asked for a third time, the Chancellor said: "We are totally focused on the growth plan."
Nicola Sturgeon accuses UK Government of 'utter ineptitude'
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…
— Nicola Sturgeon (@NicolaSturgeon) October 3, 2022
Some Tory anger over U-turn
Some Tory MPs are clearly angry with Kwasi Kwarteng and Liz Truss after more than a week spent defending the 45p tax cut policy.
Asked for their reaction, one veteran backbencher said: “Much I’d like to say, but as my late mother used to say - if you’ve got nothing good to say, best to say nothing.”
Kwasi Kwarteng: 'These things happen in politics'
Kwasi Kwarteng said "these things happen in politics" as he defended the Government's decision to perform a U-turn on dropping the 45p top rate of income tax.
Asked how embarrassed he was by the U-turn, the Chancellor told LBC Radio: "Look, you know politics and we have had lots of reversals, Marcus Rashford's campaign, all sorts of things. These things happen in politics.
"Actually what is big and what we should be focused on is actually listening to people because it is very easy to stick our heads in the sand as politicians and say we are just going to carry on regardless."
'I don't think that is the case at all'
Kwasi Kwarteng was told during an interview with LBC Radio that if he had made a "mistake" of the same magnitude in other industries he would likely have lost his job.
The Chancellor 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 you are not going to get 100 per cent of things right all of the time.
"When you listen you do have, in the spirit of humility, to take on board what people are saying and I figured that this 45p rate was a huge distraction on a good plan and we decided not to proceed with the abolition."
'You need to take people with you'
Brendan Clarke-Smith, one of the most strident low-tax Tories on the backbenches, said Kwasi Kwarteng had “probably” made the right decision this morning by dropping the plans to axe the 45p top rate of income tax.
“It’s not a bad policy, but you need to take people with you,” he said.
“And about 95 per cent of everything else is in place.”
Business chiefs welcome tax U-turn
Tony Danker, the director general of the Confederation of British Industry, has welcomed the Chancellor’s decision to U-turn on cutting the 45p tax rate.
He told BBC Radio 4’s Today programme: “Here was a package with some really strong economic reforms that businesses have been waiting for for years in fact and clearly, politically the 45p had become a distraction, and probably more importantly businesses up and down the country want the markets to stabilise, that is an absolute pre-condition to investment and growth.
“And it’s a pre-condition to getting on to these very good reforms, so yes I think it’s a good development this morning."
PM accused of having 'political tin ear'
Tory MPs are now starting to respond to the U-turn.
Michael Fabricant accused Liz Truss and Kwasi Kwarteng of having a “political tin ear” over the 45p tax cut policy.
The MP for Lichfield said: “The mistake should not have happened in the first place. The 45p tax cut did make economic sense, but showed a political tin ear.”
Ben Bradley, the MP for Mansfield, added: “Any U-turn is frustrating because of course we all get asked to defend a policy just to then defend not doing it.
“In principle I'm all for low taxes, but it's fair to say this has all run away with itself in the last week and everyone is talking about this rather the massive £60bn welfare intervention on the cost of living or about growth. It's definitely been a distraction. Whether it’s the right decision, time will tell.”
Grant Shapps: 45p was 'crowding out' other policies
Grant Shapps, the former transport secretary, 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 clouding out, 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”.
Labour: Tax cut U-turn 'too late for families'
Rachel Reeves, the shadow chancellor, said the Government's U-turn on the top rate of income tax has come "too late" for families who are already facing higher mortgage repayments.
She said: "The Prime Minister has been forced to abandon her unfunded tax cut for the richest one per cent - but it 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. There’s no plan to clear up the mess of 12 years of Tory government. They’re making it up as they go along. This is not over - it’s not just some distraction. They 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.”
Liz Truss: 'We get it and we have listened'
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. https://t.co/ee4ZFc7Aes
— Liz Truss (@trussliz) October 3, 2022
Lib Dems: U-turn is 'humiliating'
Sir Ed Davey, the leader of the Liberal Democrats, has described the U-turn on scrapping the top rate of income tax as "humiliating".
He said: "This humiliating U-turn comes too late for the millions seeing their mortgage rates soar because of this botched budget.
"The Conservatives must now cancel their conference and recall Parliament, to sort out this mess for the sake of the country."
Kwasi Kwarteng refuses to say tax plan was a 'mistake'
Kwasi Kwarteng would not describe the initial decision to scrap the 45p tax rate as a "mistake" despite this morning's U-turn.
Asked if he was willing to admit it was a mistake, the Chancellor told BBC Breakfast: "What I admit is that it was a massive distraction on what was a strong package."
Asked again if the policy was a mistake, Mr Kwarteng would not be drawn as he repeated his line that the policy had become a "huge distraction".
Kwasi Kwarteng 'has not considered resigning'
Kwasi Kwarteng said he has not considered his position in the wake of the income tax U-turn.
He told BBC Breakfast: "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."
Chancellor: Dropping tax cut 'best course of action'
Told that the decision to drop the 45p cut represented the biggest U-turn by a government in recent history, Kwasi Kwarteng said he is "100 per cent focused on the growth plan".
He also argued that in his 12 years as an MP in Parliament many governments have changed their minds about policies and dropped them.
He said he and Liz Truss had agreed that dropping the plans was the "best course of action".
Asked when he had spoken to the Prime Minister about dropping the tax cut, the Chancellor said they "talk constantly" about the Government's plans for the economy.
Kwasi Kwarteng: 45p row was 'drowning out' rest of growth plan
Kwasi Kwarteng, the Chancellor, said it was "clear" from talking to voters and MPs that the 45p income tax cut was becoming a "huge distraction on what was a very strong plan".
He said it was "simply a distraction from what was a good set of policies".
Told that Liz Truss only yesterday had said she was fully committed to the policy nd asked why the Government had decided to perform a U-turn now, Mr Kwarteng told BBC Breakfast: "We just talked to people, we listened to people, I get it."
He said the row over the 45p additional rate was "drowning out" the rest of the package.
Kwasi Kwarteng announces U-turn on dropping 45p top rate
We get it, and we have listened. pic.twitter.com/lOfwHTUo76
— Kwasi Kwarteng (@KwasiKwarteng) October 3, 2022
What Liz Truss said yesterday about the 45p tax decision
Liz Truss insisted only yesterday that she was committed to proceeding with her decision to scrap the 45p additional rate of income tax.
Asked during an interview with the BBC's Laura Kuenssberg if she was "absolutely committed to abolishing the 45p tax rate for the wealthiest people in this country", Ms Truss said the following:
"Yes. And it is part, Laura, it is part of an overall package of making our tax system simpler and lower. But I think it’s worth noting, in the package we announced the vast majority of that package is the energy package... the 45p rate actually raises very little and makes our tax system more complicated."
Grant Shapps 'strongly welcomes' income tax 'reversal'
Grant Shapps, the former Transport Secretary, has said he "strongly welcomes" the Government's reported U-turn on scrapping the 45p additional rate.
He wrote in The Times overnight that he believed getting rid of the top rate of income tax at this time was the "wrong priority".
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.
Chx backs down on 45p tax https://t.co/uhIeaPCudh
— Rt Hon Grant Shapps MP (@grantshapps) October 3, 2022
A major story is emerging in Birmingham this morning, with reports that the Government is set to scrap its plans to get rid of the 45p top rate of income tax.
It would make sense given the scale of the Tory rebellion against the move which was unveiled as part of the mini-Budget.
However, if confirmed, it would represent a massive U-turn which will inevitably do huge damage to Liz Truss's premiership.
I will guide you through the developments as they happen.