Liz Truss says she had “absolutely no shame” in performing a dramatic U-turn on the government’s plan to scrap the 45p higher rate of tax.
The prime minister told Sky News’ political editor Beth Rigby she “took the decision very rapidly” to axe the policy, which was “becoming a distraction” from the rest of the government’s economic agenda.
But Home Secretary Suella Braverman told a Conservative Party fringe event hosted by The Telegraph that she was “very disappointed” by the policy reversal, adding that “members of our own parliamentary party staged a coup, effectively”.
Responding to Ms Braverman’s remarks, Levelling Up, Housing and Communities Secretary Simon Clarke also revealed that he objects to the U-turn, stating: “Suella speaks a lot of good sense, as usual.”
Ms Truss’s U-turn came on Monday morning – more than a week after the mini-budget on 23 September.
The tax cut for the wealthiest 1% was one of a series of proposals in the government’s tax-cutting mini-budget that prompted turmoil in the markets over the past week, with the pound reaching record lows against the dollar.
The policy also received a bitter backlash from Tory MPs and the public, with Labour surging to opinion poll leads not seen since the early 2000s.
Ms Truss told Sky News that removing the 45p tax rate for those earning £150,000 or more “wasn’t a priority policy” for the government.
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“I listened to people and I think there’s absolutely no shame in a leader listening to people and responding,” Ms Truss said. “And that’s the kind of person I am, and I’ve been totally honest and upfront with people.
“But everything I’ve done as prime minister is focused on helping people get through what is a very difficult winter and very difficult circumstances and putting our country on a stronger footing in the future.”
Announcing the U-turn yesterday, Chancellor Kwasi Kwarteng said: “We have listened.”
In an earlier broadcast round on Tuesday morning, the PM repeated refused to say whether she trusted the chancellor following the 45p tax rate U-turn, instead saying the two work “very closely”.
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The PM has not ruled out a real-terms cut to benefits.
Penny Mordaunt became the first cabinet minister to openly oppose the idea of not uprating benefits with inflation, telling Times Radio: “I’ve always supported – whether it’s pensions, whether it’s our welfare system – keeping pace with inflation. It makes sense to do so. That’s what I voted for before.”
The leader of the House of Commons added: “We want to make sure that people are looked after and that people can pay their bills. We are not about trying to help people with one hand and take away with another.”
But despite growing pressure to outline her position on the issue, Ms Truss reiterated numerous times on Tuesday morning that “no decision has been made”.
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14:13
Should benefits rise with inflation?
Benefits are usually uprated in line with the consumer price index (CPI) rate of inflation from September, with the rise coming into effect the following April.
The Institute for Fiscal Studies estimates that each percentage point rise in CPI adds £1.6 billion to welfare spending.
Speaking after Ms Truss’s interview round, former Conservative Party leader Sir Iain Duncan Smith said it “doesn’t make any sense” to not uprate benefits in line with inflation.
He told a Conservative party fringe event in Birmingham that he resigned as work and pensions secretary under former Conservative PM David Cameron in 2016 because the government had “lost the plot” over cuts to the welfare system and that it “would be a mistake to do that again”.
Earlier, Justice Secretary Brandon Lewis refused to give his position when asked about the government’s plans to uprate benefits on Sky News, telling Kay Burley: “There is a process around this that the Department for Work and Pensions, Chloe Smith, the secretary of state, works through.”
He said announcements will be made “over the autumn”, adding: “I’m not going to pre-judge what that will be.”
On the edge of the Chilterns and 30 minutes from central London by train, it’s Britain’s most expensive market town for first-time buyers. It’s also been voted one of the top 10 best, and top 20 happiest, places to live in the country.
Last summer Labour did well in the polls here too. Hitchin’s 35,000 inhabitants, with above average earnings, levels of employment, and higher education, ejected the Conservatives for the first time in more than 50 years.
Having swept into affluent southern constituencies, Rachel Reeves is now asking them to help pay for her plans via a combination of increased taxes on earnings and savings.
While her first budget made business bear the brunt of tax rises, the higher earners of Hitchin, and those aspiring to join them, are unapologetically in the sights of the second.
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2:37
How will the budget impact your money?
Kai Walker, 27, runs Vantage Plumbing & Heating, a growing business employing seven engineers, all earning north of £45,000, with ambition to expand further.
He’s disappointed that the VAT threshold was not reduced – “it makes us 20% less competitive than smaller players” – and does not love the prospect of his fiancee paying per-mile to use her EV.
But it’s the freeze on income tax thresholds that will hit him and his employees hardest, inevitably dragging some into the 40% bracket, and taking more from those already there.
“It seems like the same thing year on end,” he says. “Work harder, pay more tax, the thresholds have been frozen again until 2031, so it’s just a case where we see less of our money. Tax the rich has been a thing for a while or, you know, but I still don’t think that it’s fair.
“I think with a lot of us working class, it’s just a case of dealing with the cost. Obviously, we hope for change and lower taxes and stuff, but ultimately it’s a case of we do what we’re told.”
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3:00
‘We are asking people to contribute’
Reeves’s central pitch is that taxes need to rise to reset the public finances, support the NHS, and fund welfare increases she had promised to cut.
In Hitchin’s Market Square it has been heard, but it is strikingly hard to find people who think this budget was for them.
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8:41
OBR gives budget verdict
Jamie and Adele Hughes both work, had their first child three weeks ago, and are unconvinced.
“We’re going to be paying more, while other people are going to be getting more money and they’re not going to be working. I don’t think it’s fair,” says Adele.
Jamie adds: “If you’re from a generation where you’re trying to do well for yourself, trying to do things which were once possible for everybody, which are not possible for everybody now, like buying a house, starting a family like we just have, it’s extremely difficult,” says Jamie.
Image: Hitchen ditched the Conservatives for Labour at the 2024 election
Liz Felstead, managing director of recruitment company Essential Results, fears the increase in the minimum wage will hit young people’s prospects hard.
“It’s disincentivising employers to hire younger people. If you have a choice between someone with five years experience or someone with none, and it’s only £2,000 difference, you are going to choose the experience.”
After five years, the cost of living crisis has not entirely passed Hitchin by. In the market Kim’s World of Toys sells immaculately reconditioned and repackaged toys at a fraction of the price.
Demand belies Hitchin’s reputation. “The way that it was received was a surprise to us I think, particularly because it’s a predominantly affluent area,” says Kim. “We weren’t sure whether that would work but actually the opposite was true. Some of the affluent people are struggling as well as those on lower incomes.”
Customer Joanne Levy, shopping for grandchildren, urges more compassion for those who will benefit from Reeves’s spending plans: “The elderly, they’re struggling, bless them, the sick, people with young children, they are all struggling, even if they’re working they are struggling.”
A five-year-old girl who died in hospital four days after having her tonsils removed was her family’s “magical little princess”, an inquest has heard.
Amber Milnes, from St Just in Roseland, Cornwall, underwent the procedure at the Royal Cornwall Hospital in Truro on 5 April 2023 due to sleep apnoea.
An inquest heard Amber’s parents believed she would stay in hospitalovernight after the operation as she had a rare condition called cyclical vomiting syndrome.
But Amber was discharged home hours after the procedure and started vomiting in the early morning of 6 April. She was admitted back to the hospital that evening.
Image: Amber Milnes. Pic. PA
Cornwall Coroner’s Court heard on Wednesday that Amber had a fatal haemorrhage, likely to have been caused by an infection in the part of her throat where her tonsils had been removed, at around 3am on 9 April.
In a pen portrait read to the two-day hearing, Amber’s parents, Lewis and Sereta Milnes, said their daughter was the “happiest little girl” who bravely dealt with medical treatment.
They said: “Amber was and always will be our magical little princess. She lit up our home with her singing, her dancing, her laughter and her heart of gold.”
The inquest heard Amber was referred to the hospital to have her tonsils and adenoids taken out as she had been suffering with sleep apnoea.
In a statement read to the inquest, Mrs Milnes said she had repeatedly stated that Amber would need to remain in hospital after the operation because of her cyclical vomiting syndrome.
She said the rare condition caused Amber to violently vomit and retch for hours at a time.
Image: Amber Milnes. Pic: Family Handout/PA
Amber arrived at the hospital at 12pm on 5 April and underwent the operation before she was discharged home at around 9pm, to the “surprise” of her parents, Mrs Milnes said.
In the early hours of 6 April, Amber started vomiting. Her parents rang the hospital and were advised to “wait and see” how Amber did and to call back if she did not stop being sick, they told the inquest.
Amber vomited about 20 times the following day, with her parents bringing her back to the hospital at 10pm.
She was given intravenous medication to prevent her from being sick and was found to have a chest infection at around 2am on 7 April.
But at around midnight that day, the intravenous line failed and she was instead administered medication orally – which she could not take because of being sick, Mrs Milnes said.
Intravenous medication was started at 2.45pm on 8 April, meaning Amber had not had fluids, pain relief, antibiotics or anti-sickness drugs for 14 hours, her mother added.
Amber fell asleep, but awoke at 3am and suffered a haemorrhage, with doctors unable to resuscitate her.
She was pronounced dead at 4.37am on 9 April.
Image: Amber Milnes. Pic: Family Handout/PA
Dr Andrew Bamber, a consultant in paediatric and perinatal pathology, gave Amber’s cause of death as a massive haemorrhage with aspiration of blood, surgical site infection and enlarged tonsils.
He said damage to a blood vessel in her throat, where the operation took place, was likely to have been caused by a later infection rather than during the procedure.
Kel Anyanwu, the surgeon who carried out the operation, said he had not previously seen a death from a tonsillectomy.
He said the consent form Amber’s parents signed did not mention risk of death and described her case as “unique”.
When asked about the decision to discharge Amber after the operation, he said: “The assumption was that if she was fine, she will probably be ok. The decision was made later when we saw her, that she is fine, she can go.”
Mr Anyanwu described the operation, lasting 38 minutes, as “quiet in terms of blood loss” and said he had not seen any active signs of infection at the time.
Britain’s top military chiefs held a “very difficult” meeting this week over how to fund plans to rebuild the armed forces amid fears of further cuts, defence sources have said.
The Ministry of Defence (MoD) played down a report in the Spectator magazine that the top brass, led by Air Chief Marshal Sir Rich Knighton, the chief of the defence staff, planned to write an extraordinary joint letter to John Healey, the defence secretary, to explain that his defence review published in June cannot be delivered without more cash.
“There is not a letter,” an MoD source said, adding that such a communication was not expected to be received either.
However, other sources from within the army, navy and air force confirmed to Sky News there is growing concern among the chiefs about a gap between the promises being made by Sir Keir Starmer’s government to fix the UK’s hollowed-out armed forces and the reality of the size of the defence budget, which is currently not seen as growing fast enough.
That means either billions of additional pounds must be found more quickly, or ambitions to modernise the armed forces might need to be curbed despite warnings of mounting threats from Russia and China and pressure from Donald Trump on the UK and the rest of Europe to spend more on their own defences.
“The facts remain that the SDR (Strategic Defence Review) shot for the stars, but we only have fuel for the moon,” one source said.
A second source agreed.
Image: Pic: Ministry of Defence
By way of example, they said General Sir Roly Walker, the head of the army, was all too aware of the financial challenges his service in particular was facing, especially given plans to regrow the force to 76,000 soldiers from 72,500 in the next parliament.
The defence review set out the requirement for more troops, but such a move would need sufficient money to recruit, train and equip them.
There is also a goal to expand reserve forces, which similarly costs money.
Air Chief Marshal Knighton and General Walker were joined in the meeting on Tuesday at the Ministry of Defence by the other service heads, General Sir Gwyn Jenkins, the First Sea Lord, and Air Chief Marshal Harv Smyth, the Chief of the Air Staff.
General Sir Jim Hockenhull, the commander of Cyber and Special Operations Command, was also likely to have been present.
It is a regular fortnightly gathering of chiefs.
This week they discussed the content of an upcoming plan on defence investment that is expected to be published next month – a timeline that is understood to have been delayed because of friction over how to make the money match the ambition.
“I know there was a very difficult meeting,” a third source said.
“Shoehorning the SDR into the DIP (Defence Investment Plan) as inflation, foreign exchange movement, re-costing, in-year delivery drama and unforeseen additional costs arise was always going to be hard,” the source said.
“The amount of money needed to make the thing balance is both small compared to other parts of the public sector, but also not available from this government. It’s still a matter of choices, not overall affordability.”
The source pointed to what Germany and Poland are doing on defence, with both countries significantly and rapidly ramping up defence spending and expanding their militaries.
By contrast, the UK will only inch up its core defence budget to 2.5% of GDP from around 2.3% by 2027, with plans to hit a new NATO target of 3.5% not expected to be reached until 2035.
Responding to the Spectator claim, an MOD spokesperson said: “All of defence is firmly behind delivery of our transformative Strategic Defence Review (SDR), which set out a deliverable and affordable plan to meet the challenges, threats, and opportunities of the 21st century.
“The plan is backed by the largest sustained increase in defence spending since the end of the Cold War – hitting 2.6% of GDP by 2027.”
The 2.6% figure cited by the spokesperson also includes intelligence spending on top of core defence spending.