Exclusive: Tory Rebels Prepare For Benefits Battle After Winning 45p Tax Climbdown

Kwasi Kwarteng's humiliating U-turn won't be the end of the government's woes.
Liz Truss sits with her husband Hugh O'Leary during the Conservative Party annual conference in Birmingham.
Liz Truss sits with her husband Hugh O'Leary during the Conservative Party annual conference in Birmingham.
Aaron Chown via PA Wire/PA Images

Liz Truss could not have been clearer when asked by Laura Kuenssberg yesterday if the abolition of the 45p income tax rate for the highest earners would definitely go ahead.

“Yes,” the prime minister confidently declared as the Tory conference kicked off in Birmingham.

She was just as adamant last night, telling a 1922 Committee reception: “We’ve announced a package of tax cuts and supply side reforms to turbocharge our economy because the fact is — now we face this global economic crisis — we need to do more to make the UK competitive and successful.”

Within hours, however, she and Kwasi Kwarteng had crumbled in the face of a mounting Tory rebellion spearheaded by Michael Gove.

Forget the chancellor’s claims this morning that he was U-turning because the 45p row had become “a distraction from our over-riding mission to tackle the challenges facing our country”.

The simple fact is that the Tory whips had crunched the numbers and come to the inescapable conclusion that there was no way they could get the measure through parliament because so many of their own MPs were prepared to vote against it.

And the bad news for Truss and Kwarteng is that the rebels will not stop just because the 45p policy has been ditched.

HuffPost UK has learned that many angry Conservative MPs now want the government to stick by Boris Johnson’s promise to raise benefits by the rate of inflation — something Truss and Kwarteng have so far failed to do as they draw up plans to slash public spending.

One MP said: “Thank the lord for the 45p U-turn, but that’s after billions lost from shares, £65 billion spent by the Bank of England to prop up pension funds, asking MPs to defend the indefensible and threatening MPs with losing the party whip if they vote against.

“What they have to do now is maintain the real term increases in benefits and spending for essential public services. If not, that’s when people will speak out again.”

One despairing former minister said: “God knows what happens now. [Chief whip] Wendy Morton will need to be sacked at very least.”

Despite having a 70-seat majority and only being elected prime minister a month ago, Truss’s credibility among her MPs — fewer than half of whom supported her leadership bid — has now evaporated.

“The problem is the U-turn wasn’t her decision, it was parliament’s and it was clear yesterday she couldn’t get it through,” one MP told HuffPost UK.

Another backbencher said Truss and Kwarteng had tested their MPs’ loyalty by announcing the 45p income tax rate was being abolished without warning them first.

“The national insurance and corporation tax changes were explicit in her leadership pitch and so MPs couldn’t really go against those, but this was a rabbit from the hat,” they said.

Caving in on the 45p rate will buy Truss and Kwarteng some time as they try to get to the end of the Tory conference without any further mishaps.

But their real problems may only just be beginning.


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