North East MPs respond to Government tax cut U-turn

Liz Truss has pledged her full support behind Chancellor Kwasi Kwarteng after they abandoned their plan to abolish the top rate of income tax for the highest earners in an astonishing U-turn.

The Chancellor acknowledged that their desire to borrow billions to axe the 45% rate on earnings over £150,000 had become a “terrible distraction” amid widespread criticism.

Hours before he had been due to tell the Conservative Party conference they must “stay the course” on the plans, he issued a statement saying: “We are not proceeding with the abolition of the 45p tax rate.”

The cut received widespread criticism from party MPs and members throughout the country, with some in the North East welcoming the change on Monday morning.

Chancellor of the Exchequer Kwasi Kwarteng, and Prime Minister Liz Truss were forced into an astonishing U-turn on Monday morning (Image: PA)

Read more: Liz Truss and Kwasi Kwarteng U-turn on scrapping 45p tax rate

Darlington’s MP Peter Gibson said: “I welcome the change to the top rate of tax policy, which overshadowed the immensely positive aspects of the mini budget, including the £60 billion of spending on energy support.”

And Tees Valley mayor Ben Houchen also praised the U-turn after previously saying the cut would have “got rid of a huge amount of good work”.

He added: “I’m pleased to see that Government have thought again and have now scrapped plans for the proposed 45p tax rate cut. This means it can now direct its efforts to the important work of cutting energy bills and directing support to those who need it most, which is what people in Teesside want to see.”

Tees Valley Mayor Ben Houchen speaking at the Conservative Party annual conference at the International Convention Centre in Birmingham (Image: PA)

Levelling Up secretary and Middlesbrough South and East Cleveland MP Simon Clarke was due to speak on BBC Radio 4’s programme The World At One but was not available.

But just this weekend he suggested minsters are looking to shrink the overall size of the state alongside falling tax rates.

“My big concern in politics is that Western Europe is just living in a fool’s paradise whereby we can be ever less productive relative to our peers, and yet still enjoy a very large welfare state and persist in thinking that the two are somehow compatible over the medium to long term,” he told The Times.

“I think it is important that we look at a state which is extremely large, and look at how we can make sure that it is in full alignment with a lower tax economy.

Meanwhile, Sedgefield MP Paul Howell told followers on Twitter: “The UK is doing more to protect people’s jobs from the energy crisis than any other European country.”

“We get it, and we have listened,” added Kwarteng, in language echoed in a tweet from the Prime Minister less than 24 hours after she said she remained absolutely committed to the cut.

The U-turn will be seen as a massive blow to their authority, coming a little over a week after the tax cut was announced in the mini-budget and just a month into Ms Truss’s premiership.

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