Truss expected to abandon plan to abolish 45% top rate of income tax – live

This is what Liz Truss said about the 45% top rate of income tax in her BBC interview with Laura Kuenssberg yesterday.

Kuenssberg asked: “Are you absolutely committed to abolishing the 45p tax rate for the wealthiest people in the country?”

And Truss replied:

Yes. And it is part, Laura, it is part of an overall package of making our tax system simpler and lower.

Good morning, and we are starting early this morning because it is being reported that Kwasi Kwarteng, the chancellor, is about to announce a huge U-turn. Only yesterday Liz Truss told the BBC’s Laura Kuenssberg that she was committed to sticking to the plan, announced in the mini-budget, to abolish the 45% top rate of tax. Now the government is set to ditch it – after it became clear on the first day of the Conservative party conference that Truss would face a huge rebellion if she tried to force her MPs to vote for it.

The Sun’s political editor, Harry Cole, first broke the news of the U-turn last night. He is co-writting a biography of Truss, and is one of the journalists seen as being close to her administration.

The BBC’s Nick Eardley has stood up Cole’s scoop.

This will be a colossal U-turn. One of the unofficials laws of journalism is that U-turns always have to be described as humiliating, and this one – coming at party conference, only 24 hours after Truss said the 45% top rate of tax was definitely going – is about as big as they come. It seems worse that Philip Hammond abandoning plans to increase national insurance contributions for the self-employed in 2017 – probably the last major U-turn on a budget measure. For a U-turn on this scale, you probably have to go back to Gordon Brown in 2008 finally admitting that abolishing the 10p starting rate of tax penalised some poor workers and authorising a big spending package to compensate them.

On the plus side, although humiliating, U-turns can provide an opportunity for recover. The only thing worse than abandoning an unpopular keynote policy is not abandoning it. Truss arrived at this conference with people in her party speculating that she might be gone by Christmas, and this offers her a way out.

On the other hand, the Gordon Brown comparision may be telling. The abolition of the 10p starting rate of tax turned out to be a politcal disaster for him – not least because, once the consequences became apparent, initially he reverted to denial mode – and even though he performed a U-turn, he never fully recovered from the damage it did to his authority.

Kwarteng is doing interviews this morning, and so we will hear from him directly soon.

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