{"id":164715,"date":"2022-10-03T10:39:04","date_gmt":"2022-10-03T10:39:04","guid":{"rendered":"https:\/\/precoinnews.com\/?p=164715"},"modified":"2022-10-03T10:39:04","modified_gmt":"2022-10-03T10:39:04","slug":"countdown-of-chaos-that-pushed-pm-to-drop-tax-cut-for-top-earners","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/world-news\/countdown-of-chaos-that-pushed-pm-to-drop-tax-cut-for-top-earners\/","title":{"rendered":"Countdown of chaos that pushed PM to drop tax cut for top earners"},"content":{"rendered":"
When Liz Truss sat down in the BBC studio in Birmingham to give an interview kicking off her first Tory conference as leader, her message could not have been clearer.<\/p>\n
Asked directly by Laura Kuenssberg whether she would go ahead with abolishing the 45p top tax rate, the PM said: ‘Yes… it is part of an overall package of making our tax system simpler and lower.’<\/p>\n
Ms Truss’s argument was that the government had merely failed to ‘lay the ground’ for the move.\u00a0<\/p>\n
But even at that stage the tectonic plates in the Conservative Party seemed to be shifting, perhaps hinted at by her remark that Kwasi Kwarteng took the tax rate decision.\u00a0<\/p>\n
Sacked Cabinet minister Michael Gove had been on the same programme minutes earlier, warning that\u00a0‘mistakes’ in the Emergency Budget needed to be ‘corrected’.<\/p>\n
After Ms Truss spoke his verdict was even more scathing, slating the ‘inadequate realisation’ about the level of changed required.<\/p>\n
<\/p>\n
When Liz Truss sat down in the BBC studio in Birmingham to give an interview kicking off her first Tory conference as leader, her message could not have been clearer<\/p>\n
<\/p>\n
Ms Truss confirmed the U-turn on the abolition of the 45p tax rate this morning\u00a0<\/p>\n
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Mr Kwarteng stressed the decisions had been taken with the PM, while saying he was ‘contrite’ and ‘owned’ the embarrassing reversal<\/p>\n
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Michael Gove – who has a history of wielding the political knife, having turned on David Cameron over Brexit before torching Boris Johnson’s first leadership bid in 2016 – set out on an epic round of appearances at events on the conference fringe<\/p>\n
Mr Gove – who has a history of wielding the political knife, having turned on David Cameron over Brexit before torching Boris Johnson’s first leadership bid in 2016 – then set out on an epic round of appearances at events on the conference fringe.<\/p>\n
He accused Ms Truss of not having a mandate to cut the top rate because she had not mentioned it in her leadership campaign.<\/p>\n
He suggested he was ready to vote against the Budget legislation, warning that it would be impossible to explain to voters why those earning more than \u00a3150,000 were being handed a tax cut while benefits were being slashed in real terms.<\/p>\n
Mr Gove’s manoeuvring was dismissed by allies of Ms Truss such as Iain Duncan Smith.\u00a0<\/p>\n
Publicly and privately ministers were still trying to hold the line, stressing that getting rid of the top rate was the right thing to do economically.<\/p>\n
At 11.40am CCHQ sent journalists embargoed extracts previewing the Chancellor’s speech today, including the line that the government must ‘stay the course’ on its plans.\u00a0 \u00a0\u00a0<\/p>\n
Chief Secretary to the Treasury Chris Philp boldly told a lunchtime fringe event that he would give the Budget ‘9.5 out of 10’ – despite the plunge in the Pound and government debt costs soaring.\u00a0<\/p>\n
But nerves were starting to show, especially as it became clear that the group of rebellious MPs went well beyond the usual suspects and Rishi Sunak supporters – although many of them had not backed Ms Truss.<\/p>\n
Insiders speculated that 70 Tory MPs could be ready to oppose the Finance Bill, despite threats that they would be kicked out of the party.\u00a0 \u00a0<\/p>\n
Even her economist allies were voicing alarm. Julian Jessop tweeted: ‘It is hard to think of anything more toxic than cutting the real value of benefits at the same time as lowering the top rate of income tax to 40p.’<\/p>\n
One Cabinet minister told MailOnline that the vote on the Finance Bill could be held as late as January to give the party time to cool down.<\/p>\n
Mr Kwarteng is due to lay out a full fiscal plan on November 23, alongside the much-demanded OBR forecasts.\u00a0 But the top rate abolition was not slated to happen until April.\u00a0 \u00a0<\/p>\n
The parliamentary process means that a resolution must be passed within 10 sitting days of a fiscal statement, but it does not need to cover all the tax measures in a package.\u00a0<\/p>\n
The Finance Bill can wait another 30 days before it has to received its second reading from MPs – the crunch vote.\u00a0<\/p>\n
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.<\/p>\n
By the evening the situation was sliding out of control fast. Former ministers Damian Green and Andrew Bowie were among those breaking cover as rebels.\u00a0<\/p>\n
Grant Shapps, the influential ex-transport secretary, deal another blow by complaining that the tax policy was ‘tin-eared’.<\/p>\n
The final decision was seemingly taken in a meeting between Ms Truss and Mr Kwarteng in her Hyatt Hotel suite.<\/p>\n
<\/p>\n
Chris Philp, Mr Kwarteng’s deputy at the Treasury, squirmed as he was challenged on Sky News about sniping that he had come up with the policy<\/p>\n
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Even her economist allies were voicing alarm. Julian Jessop tweeted: ‘It is hard to think of anything more toxic than cutting the real value of benefits at the same time as lowering the top rate of income tax to 40p.’<\/p>\n
With politicians and journalists dining and drinking together in Birmingham, it did not take long to leak out.\u00a0\u00a0<\/p>\n
And after the confirmation early this morning the blame game swung into effect.<\/p>\n
Mr Kwarteng stressed the decisions had been taken with the PM, while saying he was ‘contrite’ and ‘owned’ the embarrassing reversal.\u00a0<\/p>\n
Meanwhile, Chris Philp, Mr Kwarteng’s deputy at the Treasury, squirmed as he was challenged on Sky News about sniping that he had come up with the policy.<\/p>\n
‘I wouldn’t describe it as my idea, no,’ he said, adding: ‘These are broad-based discussions, lots of people are involved, the decisions are taken by the prime minister and the chancellor. I was one of many people involved in those discussions.’<\/p>\n
He also offered another hostage to fortune by insisting there will be no more U-turns on the Budget package – something Mr Kwarteng himself was notably not willing to do.\u00a0<\/p>\n