Truss To Ditch Plans To Abolish 45p Rate Of Tax For Higher Earners

Prime Minister Liz Truss is to ditch plans to abolish the 45p rate of tax for higher earners, Sky News understands.

Downing Street has faced a bitter backlash against the policy - which would benefit the wealthiest 1% - including from many senior Tory MPs.

The plan was announced in last Friday's mini-budget, but would have to go to a vote before it could be approved.

On Sunday, the Conservative party said any Tory MP who voted against the mini-budget would have the whip removed (suspended from the Tory party).

Ms Truss was expected to delay the vote to buy herself some time amid a growing backbench rebellion.

It is understood the decision to backdown altogether was made overnight.

Sky News' political editor Beth Rigby said it was a "massive u-turn".

She said: "Rebellion was brewing and the government clearly decided they need to stop this row and try and stop it quickly."

The 45p income tax cut policy was one of a series that prompted turmoil in the markets over the past week, with the pound reaching record lows against the dollar.

The value of the pound has now gone up following the news.

Grant Shapps, who wrote a piece in The Times last night criticising the axing of the 45p rate, was among the first to respond to the news of the reversal.

Mr Shapps said:

"Strongly welcome today's 45p tax reversal.

"Sensible and pragmatic.

"Conservatives want lower tax, but let's show our energy price cap and other policies are on side of consumers rather than borrowing to cut high earner taxes first."

(c) Sky News 2022: Truss and Kwarteng ditch plan for tax cut for highest earners

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MPs in Sussex had also been voicing their discontent over the tax cut. Conservative MP for Lewes, Maria Caulfield took to Twitter to inform the newly appointed Chairman of the Conservative Party, Jake Berry, that she didn't agree with it and if the party didn't want her then "fair enough".

As a working class Tory I have no problem with bankers bonus removal as it is not tax payers money but I can’t support the 45p tax removal when nurses are struggling to pay their bills. #constiuentsfirst . If Tory party @JakeBerry don’t want this working class MP, fair enough

— Maria Caulfield MP (@mariacaulfield) October 2, 2022