Liz Truss refuses to rule out scrapping 45% tax rate for top earners in future
'I do support a lower, simpler tax system,' Prime Minister Liz Truss tells ITV News political editor Robert Peston
Liz Truss has refused to rule out reviving her controversial plan to cut tax for the highest earners in the future.
On Monday, Chancellor Kwasi Kwarteng admitted their desire to borrow billions to axe the 45% rate on earnings over £150,000 had become a “terrible distraction” in an astonishing U-turn.
It came as MPs have called for benefits to be raised in line with inflation to support families against rising costs, but Ms Truss has insisted that is a decision “for later.”
But on the chances of one day scrapping the 45% rate, the prime minister told ITV News's Political Editor Robert Peston she supports a “lower, simpler tax system.”
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“We’re not bringing this proposal forward, we're very, very clear about that,” she said. When pressed on whether the policy could return at a later date, she added: “I do support a lower, simpler tax system. I've always been very clear about that.
“But what we couldn't allow is a fairly minor part of the package [to] become a distraction from the fact that we've given more energy support than any other country in Europe, and made sure people aren't worrying and struggling this winter with their energy bills, which was the big issue a month ago.
“If you remember a month ago, that's what people were talking about. We fixed that problem. We brought that in straightaway and acted very quickly.
“And we've also taken steps to make sure our economy is in a strong position so we get to a low-tax, high-wage economy, which is what we want to see and that was the priority.”
Watch Peston's full interview with Liz Truss
Critics have argued the government should never have introduced plans to scrap the 45% rate and could have avoided a humiliating U-turn if prior advice was heeded.
Ms Truss, however, said the reversal is a “reflection of somebody who does listen,” telling ITV News she is “prepared to do what’s right to move the country forward.”
“Well, I took the advice very quickly, I listened to what people had to say, we made that decision very rapidly not to move ahead because it was becoming a distraction,” she said.
“It was a small part of the overall package to get the economy moving.
“The other parts, frankly, are much bigger and more important, such as the energy price guarantee, such as the corporation tax, such as national insurance, so it was right to it was right to move on.”
Before her chance to wake up the party tomorrow morning, the Prime Minister sat down with Robert Peston. She refused to rule out reviving at some point her higher-rate tax-cut - abandoned yesterday among much political pressure
On Tuesday, Ms Truss' home secretary Suella Braverman said the U-turn was the result of a "coup" by some Tory MPs.
The Home Secretary told the Chopper’s Politics podcast: “Ultimately I’m very disappointed that members of our own party staged a coup, effectively, against the Prime Minister.”
Home Secretary Suella Braverman spoke to the heart of matters that Tory voters care most about, Shehab Khan reports
She added that former minister Michael Gove “got it wrong” by criticising the mini-budget in a series of interviews.
It was “incumbent on him to try and corral support” for Liz Truss, Ms Braverman said.
Suella Braverman also used her first major speech since taking on the role to set out proposals on immigration.
Home secretary Suella Braverman tells the Tory party conference it's 'not bigoted' to want to control migration
The new laws – which go further than the Nationality and Borders Act which came into force in June – will impose a blanket ban on anyone deemed entering the UK illegally from seeking refuge.
Ms Braverman told delegates she would allow “the kind of immigration that grows our economy”, but said: “We’ve all heard pledges and promises but this is problem is complex and entrenched. And there are many forces working against us.
Meanwhile, Cabinet member Penny Mourdant became the latest high-profile Tory to publicly back increasing benefits in line with inflation, warning many colleagues have backed that before.
Members of the public react to news the government may be cutting back on benefits
Despite the clear breach of collective Cabinet responsibility, Ms Truss denied Ms Mourdant must be dismissed for speaking out.
“No she doesn't [need to be sacked], and this is about a decision that we are taking later on this year,” she said. “And, of course, there'll be more discussions about those decisions.”
She added: “Of course, we will look at the benefits uprating issue, but that's a decision for later on this year.”
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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.
State pensions, on the other hand, normally have the protection of the 'triple lock', which guarantees pensions are uprated by inflation, earnings or 2.5% – whichever is higher.
Mr Kwarteng has already said the government is committed to the triple lock.