Chancellor Kwasi Kwarteng has tried to push past the chaos of the past few days that has seen the Government make a U-turn on its income tax plans - saying the market turmoil of recent days was just "a little turbulence".
Addressing the Conservatives' conference in Birmingham he accepted it had been a “tough” day and told party members to “focus on the task in hand”.
Monday's U-turn comes just over a week after the plan to scrap the 45% rate for earnings over £150,000 was announced in the mini-Budget. It has had to be scrapped to stave off a Tory revolt, in a move that will hit the authority of both Mr Kwarteng and new Prime Minister Liz Truss.
The Prime Minister was in the audience as Mr Kwarteng told the Birmingham conference: “What a day. It has been tough but we need to focus on the job in hand.
READ MORE: Truss and Kwarteng U-turn on plans to abolish 45p rate of tax for the rich
“We need to move forward, no more distractions, we have a plan and we need to get on and deliver it.”
The 20-minute speech contained no new policies. And Mr Kwarteng said to muted laughter from party members: “I can be frank. I know the plan put forward only 10 days ago has caused a little turbulence.
“I get it. I get it. We are listening and have listened, and now I want to focus on delivering the major parts of our growth package.”
In recent days the Bank of England has had to step in to ensure financial stability, while the pound plummeted after the September 23 mini-Budget.
But Mr Kwarteng still insisted the Tories will be “serious custodians of the public finances” - and said the Conservatives will “always be on the side of those who need help the most” despite tax policies immediately favouring the rich more than the rest of society.
Hours earlier, in announcing the U-turn, the Chancellor acknowledged that the Government’s aim to borrow billions to axe the top income tax rate had become a “terrible distraction”, though said he had “not at all” considered resigning.
Asked if Ms Truss has confidence in her Chancellor, the Prime Minister’s official spokesman told reporters: “Yes.”
Business Secretary Jacob Rees-Mogg, a day after defending the policy, also stood by Mr Kwarteng, saying “of course he shouldn’t resign” and insisting it was not a “handbrake turn”.
He told a Telegraph event at the conference: “It was a political reality. Sometimes things we want to do don’t receive the approbation of the nation that you would hope for.
“There is no point in sticking with them stubbornly if there simply isn’t the desire and appetite to do them. We live in a democracy and politicians have to be responsive to the democratic will.”
Paul Johnson, the director of the Institute for Fiscal Studies think tank, said the reversal of the policy that would have cost £2bn a year was only a “rounding error in the context of public finances”.
With around £43bn of unfunded tax cuts remaining, Mr Johnson warned: “The Chancellor still has a lot of work to do if he is to display a credible commitment to fiscal sustainability.
“Unless he also U-turns on some of his other, much larger tax announcements, he will have no option but to consider cuts to public spending: to social security, investment projects, or public services.”
Shadow chancellor Rachel Reeves called for the Government to reverse “their whole economic, discredited trickle-down strategy” as she said the U-turn had come “too late for the families who will pay higher mortgages and higher prices for years to come”.
The pound surged higher in overnight trading on Monday as reports emerged that the Government was preparing to U-turn.
Sterling hit 1.12 US dollars, recovering to levels seen before the mini-budget.
Ms Reeves said: “This speech showed us a Chancellor and a Tory Government completely out of touch, with no understanding on its own appalling record on growth.
“What the Chancellor called a little financial disturbance is a huge economic body blow to working people that will mean higher prices and soaring mortgages. That’s the Tory economic premium.”
Liberal Democrat Treasury spokeswoman Sarah Olney criticised Mr Kwarteng’s apparent attempt to joke about the “turbulence” he caused.
“Laughing about the turbulence caused by this botched budget is an insult to the millions of people already facing spiralling mortgage costs,” she said.
“This should be his first and last conference speech as Chancellor.”
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