Liz Truss is set to abandon her plans to scrap the top rate of income tax following a rebellion by Tory MPs, according to reports.
The Prime Minister and Kwasi Kwarteng, the Chancellor, are said to have decided overnight that they are not going to proceed with scrapping the 45p additional rate, according to Sky News.
It comes after a number of senior Conservatives, including Michael Gove, expressed significant concerns about the policy amid fears the Government could struggle to get the change through the House of Commons at a crunch vote.
Mr Gove said yesterday that Ms Truss was “betting too much on tax cuts” funded through borrowing as he called for the 45p move to be reversed.
The tax change was due to take effect from April 2023 but it will now reportedly not go ahead in what, if confirmed, would represent a major Government U-turn.
Ms Truss had only yesterday defended the cut as she argued it would make the tax system “simpler and lower”. She also said the 45p rate of income tax “raises very little” in revenue.
Follow the latest updates below.
07:12 AM
Grant Shapps ‘strongly welcomes’ income tax ‘reversal’
Grant Shapps, the former Transport Secretary, has said he “strongly welcomes” the Government’s reported U-turn on scrapping the 45p additional rate.
He wrote in The Times overnight that he believed getting rid of the top rate of income tax at this time was the “wrong priority”.
Strongly welcome today’s 45p tax reversal. Sensible & pragmatic.
Conservatives want lower tax, but let’s show our energy price cap + other policies are on side of consumers rather than borrowing to cut high earner taxes first.
Chx backs down on 45p tax https://t.co/uhIeaPCudh
— Rt Hon Grant Shapps MP (@grantshapps) October 3, 2022
07:08 AM
Good morning
Good morning.
A major story is emerging in Birmingham this morning, with reports that the Government is set to scrap its plans to get rid of the 45p top rate of income tax.
It would make sense given the scale of the Tory rebellion against the move which was unveiled as part of the mini-Budget.
However, if confirmed, it would represent a massive U-turn which will inevitably do huge damage to Liz Truss’s premiership.
I will guide you through the developments as they happen.
