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Countdown of chaos that pushed Liz Truss to drop tax cut for top earners

When Liz Truss sat down in the BBC studio in Birmingham to give an interview kicking off her first Tory conference as leader, her message could not have been clearer.

Asked directly by Laura Kuenssberg whether she would go ahead with abolishing the 45p top tax rate, the PM said: ‘Yes… it is part of an overall package of making our tax system simpler and lower.’

Ms Truss’s argument was that the government had merely failed to ‘lay the ground’ for the move. 

But even at that stage the tectonic plates in the Conservative Party seemed to be shifting, perhaps hinted at by her remark that Kwasi Kwarteng took the tax rate decision. 

Sacked Cabinet minister Michael Gove had been on the same programme minutes earlier, warning that ‘mistakes’ in the Emergency Budget needed to be ‘corrected’.

After Ms Truss spoke his verdict was even more scathing, slating the ‘inadequate realisation’ about the level of changed required.

When Liz Truss sat down in the BBC studio in Birmingham to give an interview kicking off her first Tory conference as leader, her message could not have been clearer

Ms Truss confirmed the U-turn on the abolition of the 45p tax rate this morning

Ms Truss confirmed the U-turn on the abolition of the 45p tax rate this morning 

Mr Kwarteng stressed the decisions had been taken with the PM, while saying he was 'contrite' and 'owned' the embarrassing reversal

Mr Kwarteng stressed the decisions had been taken with the PM, while saying he was ‘contrite’ and ‘owned’ the embarrassing reversal

Michael Gove - who has a history of wielding the political knife, having turned on David Cameron over Brexit before torching Boris Johnson's first leadership bid in 2016 - set out on an epic round of appearances at events on the conference fringe

Michael Gove – who has a history of wielding the political knife, having turned on David Cameron over Brexit before torching Boris Johnson’s first leadership bid in 2016 – set out on an epic round of appearances at events on the conference fringe

Mr Gove – who has a history of wielding the political knife, having turned on David Cameron over Brexit before torching Boris Johnson’s first leadership bid in 2016 – then set out on an epic round of appearances at events on the conference fringe.

He accused Ms Truss of not having a mandate to cut the top rate because she had not mentioned it in her leadership campaign.

He suggested he was ready to vote against the Budget legislation, warning that it would be impossible to explain to voters why those earning more than £150,000 were being handed a tax cut while benefits were being slashed in real terms.

Mr Gove’s manoeuvring was dismissed by allies of Ms Truss such as Iain Duncan Smith. 

Publicly and privately ministers were still trying to hold the line, stressing that getting rid of the top rate was the right thing to do economically.

At 11.40am CCHQ sent journalists embargoed extracts previewing the Chancellor’s speech today, including the line that the government must ‘stay the course’ on its plans.    

Chief Secretary to the Treasury Chris Philp boldly told a lunchtime fringe event that he would give the Budget ‘9.5 out of 10’ – despite the plunge in the Pound and government debt costs soaring. 

But nerves were starting to show, especially as it became clear that the group of rebellious MPs went well beyond the usual suspects and Rishi Sunak supporters – although many of them had not backed Ms Truss.

Insiders speculated that 70 Tory MPs could be ready to oppose the Finance Bill, despite threats that they would be kicked out of the party.   

Even her economist allies were voicing alarm. Julian Jessop tweeted: ‘It is hard to think of anything more toxic than cutting the real value of benefits at the same time as lowering the top rate of income tax to 40p.’

One Cabinet minister told MailOnline that the vote on the Finance Bill could be held as late as January to give the party time to cool down.

Mr Kwarteng is due to lay out a full fiscal plan on November 23, alongside the much-demanded OBR forecasts.  But the top rate abolition was not slated to happen until April.   

The parliamentary process means that a resolution must be passed within 10 sitting days of a fiscal statement, but it does not need to cover all the tax measures in a package. 

The Finance Bill can wait another 30 days before it has to received its second reading from MPs – the crunch vote. 

However, Labour could have forced a vote on an Opposition Day motion, which the government might have struggled to ignore. Tory rebels had been considering siding with Labour.

By the evening the situation was sliding out of control fast. Former ministers Damian Green and Andrew Bowie were among those breaking cover as rebels. 

Grant Shapps, the influential ex-transport secretary, deal another blow by complaining that the tax policy was ‘tin-eared’.

The final decision was seemingly taken in a meeting between Ms Truss and Mr Kwarteng in her Hyatt Hotel suite.

Chris Philp, Mr Kwarteng's deputy at the Treasury, squirmed as he was challenged on Sky News about sniping that he had come up with the policy

Chris Philp, Mr Kwarteng’s deputy at the Treasury, squirmed as he was challenged on Sky News about sniping that he had come up with the policy

Even her economist allies were voicing alarm. Julian Jessop tweeted: 'It is hard to think of anything more toxic than cutting the real value of benefits at the same time as lowering the top rate of income tax to 40p.'

Even her economist allies were voicing alarm. Julian Jessop tweeted: ‘It is hard to think of anything more toxic than cutting the real value of benefits at the same time as lowering the top rate of income tax to 40p.’

With politicians and journalists dining and drinking together in Birmingham, it did not take long to leak out.  

And after the confirmation early this morning the blame game swung into effect.

Mr Kwarteng stressed the decisions had been taken with the PM, while saying he was ‘contrite’ and ‘owned’ the embarrassing reversal. 

Meanwhile, Chris Philp, Mr Kwarteng’s deputy at the Treasury, squirmed as he was challenged on Sky News about sniping that he had come up with the policy.

‘I wouldn’t describe it as my idea, no,’ he said, adding: ‘These are broad-based discussions, lots of people are involved, the decisions are taken by the prime minister and the chancellor. I was one of many people involved in those discussions.’

He also offered another hostage to fortune by insisting there will be no more U-turns on the Budget package – something Mr Kwarteng himself was notably not willing to do. 

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Read more at DailyMail.co.uk