Inside Politics: The lady is for turning

Hello there, I’m Matt Mathers and welcome to The Independent’s Inside Politics newsletter.

With energy bills increasing, interest rates rising and experts predicting a fall in house prices, you might think there are few reasons to be cheerful this Monday morning. But do not despair, reader, for things could always be worse. You could be Kwasi Kwarteng, who has to deliver a speech to the Tory Party faithful later after announcing the government’s first major U-turn.

Parliament is not sitting.

The chancellor was expected on BBC Radio 4 after 8am.

Chris Philp, chief secretary to the Treasury, on Times Radio Breakfast at 8.20am

Twenty-four hours is a long time in politics. Following a cantankerous start to the Conservative Party conference in Birmingham yesterday, Kwarteng has confirmed that the government will not go ahead with its plan to abolish the top rate of tax for the wealthy – a controversial policy panned by just about every group with a stake in the political sphere and one that a large chunk of voters think is unfair.

In a statement posted to his Twitter page within the past hour, Kwarteng said the policy had been axed because it had become a distraction to what was otherwise a growth plan that will build “a more prosperous economy”.“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,” he said. “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.” Kwarteng has been speaking to BBC Breakfast and was expected on Radio 4 at 8.10am.

For Liz Truss, it is a humiliating U-turn which comes just over a week after the chancellor delivered his supersize Budget to MPs in the Commons – a financial statement which sent the pound plummeting, spooked the markets and fomented the threat of a major rebellion on the Tory backbenches. It was literally only 24 hours ago that the prime minister sat down for an interview with the BBC’s Laura Kuenssberg as she joined the party faithful in the West Midlands, telling the veteran journalist that she and the chancellor were determined to press ahead with their economic agenda, despite the backlash. “Yes”, Truss said when asked if she was “absolutely committed” to the removal of the 45p rate of income tax on incomes over £150,000.

During the interview, she also threw Kwarteng under the bus by suggesting that it was his decision – and his alone – to announce the measure on 23 September. It is a sign of the growing tension between No 10 and 11 Downing Street and a raw demonstration that there are no friends in politics (Kwarteng and Truss have been described as close and even live just streets away in southeast London).

Grant Shapps, the former transport secretary, was the latest Tory big hitter to voice his concern over the tax cut for the rich, which he said was “politically tin-eared” at a time when millions of families across the UK have just had their energy bills hiked, the cost of everyday items continue to go up while wages fail to keep pace with soaring inflation. Michael Gove, the former levelling up secretary, had earlier suggested he might not vote for policy when the “mini-Budget” goes to a vote in the Commons, describing the tax-cut as “not Conservative”. But denied he was the ringleader of back bench rebellion.

Shapps and Gove are just two of the more recognisable names to have come out against the policy. But the discontent was so large on the Tory backbenches that some reports said the measures would not get through the Commons. Truss must now endure three more days of the Tory conference in Birmingham with her authority badly damaged. Could it be fatal for Kwarteng?

open image in gallery

The rest of the Conservative conference is likely to be in stark contrast to the events witnessed in Liverpool last week at Labour’s get-together, which passed largely without incident and was viewed by most observers as successful.

Labour’s stock has been steadily increasing since Kwarteng delivered his Budget, with one poll giving the opposition party a whopping lead of 33 points. And ProfJohn Curtice, the polling expert, reckons Keir Starmer could be heading for a massive majority at the next election.

Speaking from Birmingham Curtice said Starmer’s party was, based on current numbers, on course for a “three-figure majority”.

If confirmed in the ballot expected in 2024, this would be the largest advantage for any political party since at least 2001, when Tony Blair scooped a majority of 167 over William Hague’s Tories, and would far outstrip Boris Johnson’s margin of 80 in 2019.

Curtice told Conservative activists that Labour had enjoyed an average nine-point lead over the Tories in polls prior to the 23 September mini-Budget.

Truss tells BBC’s Laura Kuenssberg that it was Kwarteng’s decision to abolish top rate of tax for the rich.

“No, no we didn’t. It was a decision that the chancellor made.”

Paul Brand, ITV News UK editor, on reports that Tory MPs are submitting letters of no confidence in PM.

“We have become accustomed to extraordinary political events, but Conservative MPs submitting letters of no confidence in a PM less than a month into her job…”

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