BUDGET BACKDOWN
Liz Truss confirms second mini budget U-turn in dramatic press conference after firing Kwasi Kwarteng
LIZ Truss has announced ANOTHER humiliating mini budget u-turn after she dramatically fired Kwasi Kwarteng as Chancellor this afternoon.
The embattled PM confirmed that plans to scrap a rise in corporation tax next year have officially been binned.
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In a tense press conference that lasted less than 10 minutes this afternoon, the shaken PM said: "It is clear that parts of our mini budget went further and faster than markets were expecting.
"So the way we are delivering our mission right now has to change. We need to act now to reassure the markets of our fiscal discipline.
"I have therefore decided to keep the increase in corporation tax that was planned by the previous government."
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Earlier this year when Rishi Sunak was Chancellor, he announced that corporation tax would be raised to 25 per cent, up from 19, in 2023.
While campaigning to be PM, Ms Truss vowed not to go ahead with the hike, complaining that it would only stifle economic growth.
In October's mini budget the PM did as promised.
But in a screeching u-turn this afternoon, that plan changed.
The backtrack is a massive embarrassment for the government, who have spent weeks defending the policy.
It's also the second mini budget u-turn to take place in weeks, after plans to bin the 45p top rate of income tax were scrapped at Tory conference.
A shaken Ms Truss said: "We owe it to the next generation to improve our economic performance, to deliver higher wages, new jobs and better public services and to ease the burden of debt.
"I have acted decisively today because my priority is ensuring our country's economic stability as Prime Minister. I will always act in the national interest. This is always my first consideration."
The PM, who refused to apologise for the mini budget, admitted finding u-turning again "difficult".
But she pledged: "We will get through this storm".
Ms Truss promised to deliver "the strong and sustained growth that can transform the prosperity of our country for generations to come".
Asked by The Sun's Political Editor Harry Cole how she can carry on, the PM said: "My priority is making sure we deliver the economic stability that our country needs.
"That's why I had to take the difficult decisions I've taken today. The mission remains the same."
The PM appointed moderate Tory Jeremy Hunt as the UK's new Chancellor today after sacking her close ally Mr Kwarteng.
The ex-Chancellor was one of the chief architects of the disastrous mini budget.
Mr Kwarteng was only in the role for 38 days, making him the UK's second shortest ever serving Chancellor.
In his resignation letter, Mr Kwarteng said: "You have asked me to stand aside as your Chancellor. I have accepted.
"It is important now we move forward to emphasise your government's commitment to fiscal discipline... I look forward to supporting you from the backbenches.
"We have been colleagues and friends for many years. In that time, I have seen your dedication and determination. I believe your vision is the right one.
"It has been an honour to serve as your first Chancellor."
An embattled Mr Kwarteng last night hinted a u-turn on corporation tax was imminent, as he said "let's see" if the promised tax cut goes ahead.
TIMELINE OF TURMOIL
September 5 Liz Truss beats Rishi Sunak to win the Tory leadership race
September 6 Liz Truss is formally appointed as PM of the UK
September 23 Kwasi Kwarteng unveils his controversial mini-budget, including £45bn worth of tax cuts
September 26 The pound falls to its lowest level against the dollar since decriminalisation in 1971. Sterling fell by more than 4% to just $1.03 in early trading in Asia, before recovering to $1.09 in the afternoon
September 28 The Bank of England made a dramatic intervention today in a bid to save Brits' pensions, as several funds faced collapse
October 2 Conservative Party Conference kicked off in Birmingham. A row breaks out over whether the PM should uprate benefits in line with inflation
October 3 Kwasi Kwarteng confirms u-turn on scrapping the 45p top rate of income tax. Meanwhile, ministers and MPs tear each other apart in private briefings and publicly over the PM’s handling of the economy
October 7 House prices dipped in September as mortgage interest rates soared
October 12 Tory MPs demand the PM gets a grip on the economy at an extremely tense meeting of the 1922 backbench committee
October 14 Kwasi Kwarteng is sacked as Chancellor by his friend and ally, the PM
This morning the MP touched down in London after cutting short his US trip to hold urgent talks with Ms Truss.
Within minutes of landing at Heathrow Airport reports emerged that he would be fired by his close friend and ally, the PM.
He was hauled into No10 and delivered the bad news.
Rebellious Tory MPs had been urging the ex-Chancellor to row back on his £45billion mini budget tax spree to calm the jitters in the money markets.
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The party has been in disarray since the tax bonfire took place last month.
Backbenchers and ministers alike told The Sun they are distraught by the direction Ms Truss has taken.
Today anger at economic mismanagement continued, even after the u-turn.
One MP who backed Ms Truss to be PM told The Sun: "I can't see how her position is tenable."
Meanwhile a Tory source said: "MPs are furious. This decision has alienated her core supporters.
"MPs that backed her from the beginning are asking what’s the point of her if she’s going to be a high tax, big state PM. No difference now between her and Rishi and Boris."
Tory grandee Sir Christopher Chope told Times Radio: ‘I’m… in a state of despair and utter disbelief. I don’t know where to go from here frankly."
The MP added his party is a "laughing stock".
Just yesterday Mr Chope said: "If I was a betting man I would now be going out and putting money on the Conservatives winning the next general election."
Responding to today's events Labour leader Sir Keir Starmer said: "Changing the Chancellor doesn't undo the damage made in Downing Street.
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"Liz Truss’ reckless approach has crashed the economy, causing mortgages to skyrocket, and has undermined Britain’s standing on the world stage.
"We need a change in government. With my leadership, Labour will secure Britain’s economy and get us out of this mess."
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