Government scraps abolition of 45p tax rate

Chancellor Kwasi Kwarteng has announced that the government is scrapping its plan to abolish the top rate of income tax for the highest earners.

The announcement comes after much opposition and just 10 days after it was announced.

On Sunday, the prime minister had insisted that the policy would not be abandoned.

In a statement, he said: "It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.

"As a result, I'm announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened."

Speaking to BBC Radio 4's Today Programme, Grant Shapps, one of the leading critics within the Conservative party, said: "It is a sensible response.

"I am pleased the government has moved quickly."

Sir Ed Davey, Leader of the Liberal Democrats, has called for Kwarteng to resign, saying he "doesn't have any credibility any more".

Speaking to to Radio 4's Today Programme, Kwarteng said: "Look, we got this wrong and we're to going to proceed with the abolition of the rate.

"There's humiliation and contrition in that and I'm happy to own it."

 

Image: Chris McAndrew / UK Parliament

Event Diary

DISCOVER | DEVELOP | DISRUPT

UKREiiF has quickly become a must-attend in the industry calendar for Government departments and local authorities.

The multi-award-winning UK Construction Week (UKCW), is the UK’s biggest trade event for the built environment that connects the whole supply chain to be the catalyst for growth and positive change in the industry.