Kwasi Kwarteng announces u-turn on abolition of 45p tax rate
Chancellor Kwasi Kwarteng has announced the government will abandon its plan to axe the top rate of income tax for the highest earners.
The announcement comes one day after Prime Minister Liz Truss defended the plan in a live BBC interview.
That came amidst opposition from Tory benches and a warning from former Conservative minister that the government would not get the parliamentary support to pass the plan.
Today Kwarteng said the abolition of the 45p tax rate had become " distraction", adding: "We get it, and we have listened."
Speaking to BBC Breakfast this morning, Kwarteng said he and Truss have spoken "constantly" about the mini-budget, saying: "We have made the right decision and we can now move forward."
The pound rose against the US dollar as the markets anticipated Kwarteng's statement.
There had been widespread outcry over the Chancellor's plan to cut taxes for those earning more than £150,000.
Kwarteng said the u-turn will allow the government to "focus on delivering the major parts of our growth package", including delivering the Energy Price Guarantee for households and businesses and "cutting taxes to put money back in the pockets of 30 million hard-working people and grow our economy".
While Truss said the idea to cut the top rate of tax had come from Kwarteng, he has said that the decision to abandon the plan was reached in collaboration with the PM.
Commenting on the announcement, Truss tweeted: "Our focus now is on building a high growth economy that funds world-class public services, boosts wages, and creates opportunities across the country."
She had encouraged the Scottish Government to replicate the policy. This morning Deputy First Minister John Swinney said: "It is maybe a good job I did not follow the demands of the Scottish Tories to replicate this folly."