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03rd Oct 2022

Chancellor Kwasi Kwarteng bins 45p tax rate in massive U-turn saying, ‘we get it’

Steve Hopkins

‘We get it, and we have listened’

Chancellor Kwasi Kwarteng has announced a U-turn on the plan to cut the top rate of income tax, conceding “we get it, and we have listened”.

At 7.25am on Monday, Kwarteng said in a statement: “From supporting British business to lowering the tax burden for the lowest paid, our Growth Plan sets out a new approach to build a more prosperous economy.

“However, it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.

“As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate. “We get it, and we have listened. This will allow us to focus on delivering the major parts of our growth package.”

The news comes days after his government’s shock mini-budget announced the biggest tax cuts in 50 years, sending financial markets into chaos and plunging the pound to a record low against the dollar.

The U-turn comes after several Conservative MPs voiced their opposition to the removal of the top tax rate.

Government sources would not comment on the U-Turn to the BBC, but former cabinet minister Grant Shapps had warned Liz Truss was likely to lose a Commons vote on the plan.

The 45p income tax cut policy was one of a series that prompted turmoil in the markets over the past week, with the pound reaching record lows against the dollar.

On Sunday, the Conservative party said any Tory MP who voted against the mini-budget would be suspended from the party.

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