Chancellor Kwasi Kwarteng said he and Prime Minister Liz Truss were determined to press on – despite criticism of his mini-budget – saying it was “going nowhere”. Asked if he would have to resign if there were further twists in the mini-budget, Mr Kwarteng said: “I am fully focused on the development agenda.” Reports earlier suggested talks were underway between No 10 and the Treasury to drop elements of the £43bn tax cut plan, including a pledge to scrap the planned corporation tax rise. ITV’s political news editor Robert Peston said he was “as sure as [he] it may be that, early next week, Liz Truss and Kwasi Kwarteng will renege on their promise not to raise corporation tax by six percentage points in “one of the most humiliating tax reversals ever”. Finance editor Joel Hills on the specific issues facing the UK amid a global economic slowdown Responding to talks in London about scrapping the measures in the mini-budget while in Washington, the chancellor said: “I speak to No 10, I speak to the prime minister all the time. “We are absolutely focused on implementing the growth plan. What we were dealing with was a 70-year high tax level and no growth.” He said his talks with the International Monetary Fund (IMF) showed that “development is a central focus of the international community” and that the government was “very right to focus on development”. ‘We are fully focused on delivering the growth plan’: Chancellor Kwasi Kwarteng said he and Liz Truss are determined to press on despite criticism of his mini-budget “People are talking about some of the ideas we’ve put forward,” Mr Kwarteng said. “I am absolutely focused on making sure that people are helped with their energy bills, that the energy price guarantee is understood, that the scale of our intervention … is understood and that we can really give this country a path, to brings us on a trajectory, to the development of the economy so that everyone benefits”. But in an interview with the Telegraph on Thursday afternoon, he appeared not to rule out a reversal of corporation tax. Political editor Robert Peston on how damaging a potential mini-budget reversal could be for the chancellor and prime minister Asked about the expectation from financial markets that the government could abandon plans not to raise corporate tax in order to demonstrate its commitment to balancing the books, he said: “Let’s see.” Mr Kwarteng was earlier asked by broadcasters about the prospect of a reversal and did not explicitly rule it out. He insisted that “our position has not changed”, adding: “I will come up with the medium-term fiscal plan on October 31, as I said earlier in the week, and there will be more details afterwards.” Earlier on Thursday, Ms Truss renewed her commitment to controversial tax cuts, with her official spokesman telling reporters the prime minister’s position “has not changed”. She came under fire for ruling out public spending cuts to balance the books at her first PMQs after the chancellor’s £43bn mini-budget. Her comments followed the IFS saying public spending would need to be cut by £62 billion to fund the mini-budget. Kwasi Kwarteng acknowledged that the UK had suffered some “turbulence” after its mini-budget, but said the economy was facing the same problems as other countries around the world Ms Truss insisted her plan to scrap the rise in corporation tax from 19% to 25% would boost growth, but the so-far unfunded measures in the chancellor’s mini-budget have sparked chaos in financial markets. On Thursday, IMF managing director Kristalina Georgieva said it is sometimes right for a “recalibration” of policies, as she was asked about reports of a U.K. government reversal. Speaking at a press conference in Washington, Ms Georgieva said: “Our message to everyone, not just the UK, is that at this time, fiscal policy should not undermine monetary policy.” He said “if it does, the task of monetary policy only becomes more difficult” as it could increase “interest rate tightening conditions”. “Don’t prolong the pain – make sure the actions are consistent and consistent,” he said. “It’s right to be guided by the evidence, so if the evidence is that there needs to be a recalibration, it’s right for governments to do it.” The IMF previously said the UK government’s tax cuts threatened to cause “trouble” in the UK economy. ‘Don’t prolong the pain’: Kristalina Georgieva said sometimes it is right for a ‘recalibration’ of politicians as she was asked about reports of a U-turn by the UK government Ms Georgieva also confirmed IMF leaders had a “constructive” meeting with the chancellor, who is in Washington for IMF and World Bank meetings. It’s not just the UK facing rising inflation as US consumer prices rose 8.2% in September compared to last year. Figures fell slightly in August, but higher than expected. September’s UK CPI rate is expected to be around 10%, according to independent think tank Resolution Foundation. Division among Tories over Prime Minister’s policies International Trade Secretary Kemi Badenoch became the latest Tory MP to offer support to the party leader on Thursday as she urged critics to back the prime minister. “I think right now, given what’s going on globally – there’s a war in Ukraine, there’s an inflation crisis, we’ve been talking about the cost of living for several months now – what we need to focus on is getting past the prime minister and her growth plans , so that it can improve the country’s economy,” said Ms. Badenoch. International Trade Minister Kemi Badenoch urged her party to “support” the prime minister’s development plans. Credit: PA It was followed by a show of support from Foreign Secretary James Cleverley, who said a change at the top of the party would be a “catastrophically bad idea”. However, Mel Strid, the Tory chairman of the Commons Finance Committee, was among those who strongly criticized Ms Truss’s policies. He said that given the Prime Minister’s pledges to protect public spending, there was a question whether any plan that did not include “at least some element of further rollback” on the £43bn tax cut package could reassure investors. “Credibility can now swing towards evidence of a clear change of tack rather than just proposing other measures that try to square the fiscal cycle,” Mr Stride said. A meeting of the Tory 1922 backbench committee on Wednesday night failed to win support with MPs reportedly expressing concerns about rising mortgage rates and the Tories falling in the polls. The chairman of the Commons’ education committee, Robert Halfon, told Ms Truss she had “ruined the last ten years of Labor Conservatism”. Downing Street declined to say on Thursday whether Mrs Truss was concerned about a loss of confidence in her leadership. The prime minister and chancellor are expected to meet critical MPs from next week to try to reassure them that Mr Kwarteng’s medium-term budget plan on October 31 will address their concerns. But Jacob Rees-Mogg suggested the government could ignore the Office for Budget Responsibility forecasts accompanying the strategy if they predict low growth and rising debt. The Business Secretary told ITV’s Peston that “the record of forecasting accuracy was not exceptionally good” and that the chancellor could rely on “other sources of information”. Downing Street aimed to distance itself from Mr Rees-Mogg’s comments on Thursday. After Mr Kwarteng’s mini-budget on September 23, the value of sterling fluctuated and yields on government bonds, the cost of government borrowing, rose to such an extent that the Bank of England was forced to step in to prevent problems for pension funds. Ms Truss was also warned by senior advisers that it was “no longer credible” to push ahead with major tax cuts without risking a financial crisis, The Times newspaper reported. It has already abandoned its plans to cut the income tax rate to 45pc. for top earners. Economists have suggested that restoring confidence in the government’s commitment to the national economy will require spending cuts or tax increases worth tens of billions of pounds. Want a quick and special update on the biggest news? Listen to our latest podcasts to find out what you need to know…
