Liz Truss and Kwasi Kwarteng today pulled off a screeching U-turn and scrapped their most divisive tax cut for the rich.
Facing a Tory mutiny including from Michael Gove and Grant Shapps, the pair cancelled plans to get rid of the 45p top rate of Income Tax.
The move from April would have saved 660,000 people who earn more than £150k an average of £10,000 a year each.
At the same time, the Chancellor is mulling public service cuts and may raise benefits by less than inflation next April, breaking a repeated pledge.
It’s not the first time Liz Truss has U-turned - she ditched “regional pay boards” during her leadership campaign after a furious backlash.
But it is a hammerblow to her credibility after days of turmoil on the markets and the threat of a Budget rebellion.
Labour MP Kevin Brennan tweeted: “The lady IS for turning.”
Here are 16 times the PM and her Chancellor Kwasi Kwarteng insisted they would stick to the plan - including at 10.30pm last night.
Friday 23 September, 9.50am: Announcing the move in his mini-Budget, Kwasi Kwarteng says: “That will simplify the tax system and make Britain more competitive. It will reward enterprise and work, incentivise growth, and it will benefit the whole economy and the whole country. After all, that only returns us to the top rate that we had for 20 years, including the entire time that the Opposition were last in power, bar one month.”
Friday 23 September, 10.27am: Told the 45p rate “benefits the richest 1% in our society”, Kwarteng retorts: “The 40p rate was the rate for 20 years, and it was the one adopted by [Labour] when it was successful and used to win elections.”
Friday 23 September, 4.30pm: The Chancellor told reporters "I think it's a very good day for the UK” and “we’re very, very upbeat”, adding: "The Prime Minister campaigned for the leadership on the basis that we were going to reduce taxes and that's exactly what we've done."
Sunday 25 September, 9am: Asked about his tax cuts for the rich, Kwasi Kwarteng tells the BBC ’s Laura Kuenssberg: “They favour people right across the income scale and that’s what’s most important. Actually one of the things that I really did agree with Sir Keir about is that it’s British people that are driving economic growth, but many people, most people actually work in businesses. The interests of a small business owner, or a small business operator are absolutely aligned with the people who work in those businesses, it’s, we need to create jobs.”
Tuesday 27 September: Kwasi Kwarteng tells Tory MPs that the 45p rate had only been in place since 2010 and left Britain out of kilter with Ireland. "It was a tough choice but the right choice," he said.
Thursday 29 September, 8.22am: Truss is asked on BBC Radio Lancashire if the 45p tax cut is fair. She replies: “What is fair is that people were facing huge energy bills this winter of up to £6,000 pounds because the government has stepped in, we are making sure nobody faces energy bills of more than a typical £2,500 from this weekend.”
Thursday 29 September, 8.30am: Truss tells BBC Radio Nottingham: Having lower taxes across the board, which is what we're doing on everything from national insurance to corporation tax to income tax, helps everybody because it helps grow the economy. For too long. The debate in this country has been about distribution, rather than how we grow our economy.
Thursday 29 September, 8.38am: Asked about tax cuts for the wealthiest, Truss tells BBC Radio Tees: “We’re reducing taxes across the board, because the tax burden was too high.”
Thursday 29 September, 8.45am: Asked about the 45p cut, Truss tells BBC Radio Bristol: “We're facing an economic slowdown. So that is why it's important to have lower taxes across the board, including on national insurance, which affects millions of people, including on income tax, which affects millions of people, so that we get the economy going.”
Thursday 29 September, 8.52am: Liz Truss tells BBC Radio Stoke: “My policies are all about making sure that average salaries go up, and we have a growing and productive economy and you don't get a growing and productive economy by putting taxes up… Too often tax has just been seen as being about distribution. It's not. It's also about how we grow the size of the pie so that everyone can benefit.”
Friday 30 September, 10pm: Liz Truss admits there may be “disruption” tells broadcasters that the Chancellor’s mini-Budget is the right approach. "What is important to me is that we get Britain's economy back on track, that we keep taxes low, that we encourage investment into our country and that we get through these difficult times," she said.
Saturday 1 October: Kwasi Kwarteng defends his mini-budget in the Telegraph, by saying the Government "had no other choice" than to do "something different" to spark the economy.
Sunday 2 October: Liz Truss tells the Sunday Telegraph that she is confident in the mini-Budget. Asked if she is planning to retain the entire package, including the most controversial proposal to scrap the 45p rate of income tax, the Prime Minister replied: “Yes.”
Sunday 2 October: Kwasi Kwarteng insists in the Mail on Sunday that he is scrapping the 45p income tax rate. 'I'm absolutely 100 per cent convinced that this was the right plan,” he says.
Sunday 2 October, 8.50am: On BBC’s Sunday with Laura Kuenssberg, the PM was grilled on whether she was committed to abolishing the 45p tax rate for the wealthiest people in the country? Ms Truss replied: “Yes. And it is part, Laura, it is part of an overall package of making our tax system simpler and lower.”
Sunday 2 October, 10.30pm: In an advance trail of Kwasi Kwarteng’s Monday evening conference speech, he says: “We must stay the course. I am confident our plan is the right one.”
BONUS ROUND
Sunday 2 October, 11.30pm: Minister Penny Mordaunt, who sits in Cabinet, defends the cut by telling Tory activists: “Our policies are great, but our comms are s***!”
