Chancellor faces fresh Tory pleas to ‘further row back’ tax cutting plans

A Treasury minister has said there are no plans to reverse or defer tax measures in the Government’s growth plan, amid Tory pleas for a “further rowing back”.

Chris Philp was mocked by Labour MPs after he insisted the Government is not planning to perform any more U-turns when pressed by senior Tory Mel Stride to change course.

Mr Stride, who chairs the Treasury Select Committee, suggested Chancellor Kwasi Kwarteng will “simply have to come forward with a further rowing back” on the tax announcements given the “huge challenges” he is facing.

Mr Kwarteng has been under pressure for the market turmoil that erupted after the Government last month announced a £45 billion package of unfunded tax cuts alongside a commitment to cap energy bills for the next two years.

He later dropped plans to abolish the 45% tax rate on earnings over £150,000, although he remains committed to the rest of his mini-budget.

This includes bringing forward a cut to the basic rate of income tax, to 19p in the pound, a year early and scrapping a planned rise in corporation tax.

Speaking during an urgent question in the Commons, Mr Stride said: “The Chancellor was quite right to have brought forward the date for the medium-term plan and OBR forecast.

“He has, of course, a huge challenge now landing those plans to reassure the markets. He has to get the fiscal rules right, he has to come forward with spending restraint and revenue raisers that are politically deliverable.

“Given the huge challenges, there are many – myself included – who believe it is quite possible that he will simply have to come forward with a further rowing back on the tax announcements that he made on September 23.

“So could I ask (Mr Philp) to confirm that that possibility is still on the table?”

Mr Philp, in his reply, said: “There are not any plans to reverse any of the tax measures announced in the growth plan.”

Labour MPs shouted “yet” in response to Mr Philp’s remark.

The minister added: “We want to make sure the UK is a competitive jurisdiction where companies and high potential individuals who are internationally mobile choose to come to the United Kingdom to locate and to grow.

“But we do of course, as the select committee chairman says, need to make sure we do this in a way that is fiscally responsible, to make sure that debt over GDP does fall in the medium-term and the strategy, the plan will lay out exactly how that will be achieved to the House in detail, scored by the OBR (Office for Budget Responsibility) on October 31.”

Mr Philp, in response to Conservative MP Robert Largan (High Peak), also told the Commons: “We don’t plan to defer the tax measures because we think having an internationally competitive tax system is important because it will help encourage businesses and successful individuals to locate here in the UK rather than anywhere else.”

For Labour, shadow chancellor Rachel Reeves said the Government must “put aside their pride and reverse this catastrophic mini-budget”.

Speaking in the Commons, she asked what guarantees the Government would give on the “currency slide”, how many repossessions there will be if the Government does not change course, and how much more the Government is borrowing on debt interest due to higher borrowing costs.

She said: “This is a Tory crisis made in Downing Street, but it is ordinary working people who are paying the price, and it can only be resolved when the Conservatives put aside their pride and reverse this catastrophic mini-budget, and they must do so now.”

Conservative former minister James Cartlidge said: “It is very welcome that a few minutes ago the chief secretary said that the effect to the statement on October 31 would be to show the Chancellor was 100% committed to fiscal responsibility.

“That is very welcome to colleagues on all sides, I think.

“Can he confirm that means that all the previous unfunded tax cuts will now be funded in that statement?”

Mr Philp replied: “What the statement will set out in the round is how we will get debt as a proportion of GDP falling in the medium term. That is the critical metric and that is what the medium-term fiscal plan will deliver.”