Liz Truss has full confidence in Kwasi Kwarteng, Downing Street has said, after the chancellor announced an embarrassing U-turn on plans to scrap the 45p rate of tax.
On Monday morning the chancellor ditched the proposal to axe the top rate of tax for the highest earners following a furious backlash from many Tory MPs.
Kwarteng said the row over the proposal had become a “terrible distraction” from the rest of the measures in his controversial mini-Budget.
The prime minister and chancellor’s plans — unveiled less than two weeks ago — led to market turmoil and tanked the Conservative Party’s poll ratings.
Asked if Truss has confidence in Kwarteng, the PM’s official spokesperson told reporters this morning: “Yes.”
Downing Street said the decision to U-turn was made during a meeting between Truss and Kwarteng on Sunday evening.
Kwarteng announced the U-turn at 7.25am this morning.
At 10.30pm last night, the prime minister defended the tax cut to Tory activists at the party’s conference in Birmingham.
In an interview with ITV on Sunday afternoon, Truss said “no” when asked if the tax cut would be ditched.
Truss had also stood by plans to cut the 45p rate during her high-profile interview with the BBC’s Sunday with Laura Kuenssberg show.
The prime minister is also under pressure from her own side over reports she plans to cut benefits.
Michael Gove, the veteran former cabinet minister, had hit out at plans to cut the 45p rate and welcomed the U-turn.
But he told Times Radio it would require a ″lot of persuading” for him to accept stopping benefits from going up with inflation, as had been promised by Boris Johnson’s government of which he was a part.
Shadow chancellor Rachel Reeves called for them 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”.