Kwasi Kwarteng Doubles Down On Government Growth Plan Despite Mounting Tory Rebellion
Kwasi Kwarteng and Liz Truss at the Conservative Party annual conference in Birmingham. (Photo: Stefan Rousseau via PA Wire/PA Images)
Kwasi Kwarteng will double down on his plan for unfunded tax cuts despite the economic chaos and a mounting Tory rebellion.
The chancellor will tell the Conservative conference in Birmingham the government must “stay the course”.
And he will say: “I am confident our plan is the right one.”
Kwarteng’s comments risk further inflaming the Tory civil war, with Michael Gove among the big-hitters urging the government to change course.
The former cabinet minister said he was “profoundly” concerned by the mini-budget, which saw the chancellor unveil plans to slash taxes for the highest earners and end the cap on bankers’ bonuses.
Gove also suggested that he would join other Tory rebels in voting against the plans when they come before parliament - despite party chairman Jake Berry warning that any MP who does so will lose the whip.
In a sign of the mounting anger, 13 Tory MPs have now gone public to voice their opposition to the decision to axe the 45p tax rate paid by those earning more than £150,000.
They include former chief whip Julian Smith, who said: “We cannot clap for carers one month and cut tax for millionaires months later.”
The first job of an MP is to act in the interest of their constituents & in the national interest. We cannot clap for carers one month & cut tax for millionaires months later. https://t.co/iKtnOxm1jB
— Julian Smith MP (@JulianSmithUK) October 2, 2022
The £45 billion tax giveaway, funded by £70 billion of extra government borrowing, led to a run on the pound, sent interest rates soaring and forced the Bank of England to launch a £65 billion bailout of the pensions industry.
But in his keynote address to the party faithful in Birmingham today, Kwarteng will insist he had no choice but to take radical action to grow the UK economy, and will not back down.
He will say: “We must face up to the facts that for too long our economy has not grown enough.
“The path ahead of us was one of slow, managed decline, and I refuse to accept that it is somehow Britain’s destiny to fall into middle income status, or that the tax burden reaching a 70-year-high is somehow inevitable - it isn’t, and shouldn’t be.
“We needed a new approach, focused on raising economic growth.That is the only real way to deliver higher wages, more jobs, and crucially, revenue to fund our precious public servicee and it is the only way to achieve long-term fiscal sustainability.
“We must stay the course. I am confident our plan is the right one.”
The chancellor will add: “With energy bills skyrocketing.A 70 year high tax burden.Slowing long-term growth rates. Painfully slow infrastructure delivery.
“Should we really have just accepted that fate? Think about the cost to livelihoods and the impact on our communities.
“What Britain needs is economic growth.And a government wholly committed to economic growth.
“That is why we will forge a new economic deal for Britain backed by an iron-clad commitment to fiscal discipline.”
The chancellor’s speech will be closely watched by the money markets for details on precisely how the government plans to balance the books.
Prime minister Liz Truss failed to rule out public spending cuts in an interview on Sunday morning in which she appeared to blame Kwarteng for the 45p tax row, prompting Nadine Dorries to accuse the PM of “throwing the chancellor under a bus”.
This article originally appeared on HuffPost UK and has been updated.