Kwarteng questions about U-turn on mini-budget

Chancellor Kwasi Kwarteng has sidestepped questions about whether he will U-turn on his mini-budget.

Asked about speculation he is preparing to scrap major parts of his tax-cutting growth plan, Mr Kwarteng said: “Our position hasn’t changed.”

Asked if he and PM Liz Truss would still be in their jobs this time next month, he said: “Absolutely, 100%.”

He said he was “not going anywhere”, despite market turbulence he admitted was caused in part by his policies.

Ms Truss is facing growing calls from within her party to rethink part or all of the government’s tax-cutting package to reassure financial markets.

Discussions are under way between the prime minister and backbenchers about what her party can accept.

But the mood among Conservative MPs is despondent. There is talk of U-turns, a reshuffle, even a new leader, but there is also a widespread view that whatever happens next the damage to the party’s credibility has been done.

The government has already U-turned on its plan to scrap the top rate of income tax, but this only made up £2bn of the tax cuts announced by the chancellor last month.

He is under pressure to spell out how the remaining £43bn will be paid for, and how he will get the UK’s national debt falling.

Mr Kwarteng is due to deliver a statement on 31 October, along with independent economic forecasts.

Pressed on whether there could be further U-turns on his mini-budget, Mr Kwarteng, who is in Washington for an IMF meeting, said there would be more detail on 31 October.

Asked about the possibility corporation tax could rise, Mr Kwarteng said he was “totally focused” on delivering his mini-budget.

Ms Truss has pledged to scrap a planned rise to the tax, which was set to increase from 19% to 25% in 2023.

On Wednesday, she said it would be “wrong” to raise corporation tax “in a time when we are trying to attract investment into our country at a time of global economic slowdown”.

The pound rose against the dollar as rumours emerged about a possible government U-turn.

However, it later fell back after stronger-than-expected inflation data from the US drove up the value of the dollar.

The chancellor’s mini-budget on 23 September has caused turmoil in the financial markets and prompted the Bank of England to intervene to protect pension funds.

Mr Kwarteng acknowledged there was “some turbulence” after his mini-budget but said there was “a very dicey situation globally”, with inflation, potential interest rate rises and energy price spikes affecting everybody.

Reports /TrainViral/