Kwasi Kwarteng was left squirming this morning as broadcasters queried his U-turn on tax cuts.
On Monday morning – hours after the prime minister had repeatedly voiced her backing for the controversial plan to abolish the 45p rate of tax cut for the richest earners in the country – the chancellor confirmed the plan was going to be dropped.
It had been a prominent part of the government’s Growth Plan which was unveiled 10 days ago. It quickly triggered the dramatic decline of the pound on the market, and was also criticised for benefitting the wealthy in a cost of living crisis.
So eyebrows were raised when Kwarteng announced the U-turn on Twitter, claiming the “abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country”.
And his subsequent media interviews where he was asked to explain himself were not exactly easy.
The chancellor was even asked by LBC’s Nick Ferrari, “how embarrassing is this?” at the start of their exchange.
Ferrari also noted: “If you were a financial director, or you were a hedge fund manager, and you made a mistake of this magnitude, you would have been fired.”
Kwarteng tried to defend himself, replying: “I don’t think that’s the case at all, I think people actually have the maturity to learn from things that haven’t gone right.
“And also in politics – absolutely in politics – you have to listen to people, you have to understand that you’re not going to things 100% right all of the time.”
He said listening to feedback was a form of “humility”.
Ferrari simply replied: “You got your sums wrong.”
“It’s not a question of sums, it’s a question of listening to people,” Kwarteng repeated.
Ferrari then asked if that was the case, why did the Bank of England have to inject £65 billion into the economy as an emergency measure last week – but Kwarteng suggested that was to do with a different element of the economy.
Kwarteng also denied that the 45p tax cut had upset the markets, even though, as soon as the announcement was confirmed, the value of the pound shot up on the markets.
The chancellor did refuse to rule out any future U-turns as well but confirmed he had no plans to resign.
Similarly, BBC Breakfast’s Jon Kay pointed out that Kwarteng’s “credibility” was now being questioned, and that people might start asking what other U-turns are on the horizon.
The chancellor replied by saying he was “pleased” that this policy was dropped, because it was a distraction from an “otherwise excellent plan”.
Kay then added: “You’re making it sound like it wasn’t your idea!”
“I’ve said that I take responsibility for it, I’ve said that I get the reaction,” Kwarteng replied.
Just 10 minutes after that, the chancellor faced a grilling on BBC Radio 4′s Today programme too.
Pressed about what caused the sudden change, he maintained that his sudden change in policy stemmed from the government’s decision to listen to the feedback.
“For two weeks, you have done the opposite of listening,” host Nick Robinson pointed out.
Kwarteng said the government had been “digesting” the feedback at the time, to which Robinson pointed out that Kwarteng – and Liz Truss – had repeatedly emphasised how they were going to “stay the course” with their economic plan.
By U-turning after the prime minister promoting the Growth Plan only yesterday, Robinson suggested: “You’ve put the prime minister through the biggest political humiliation you can imagine.”
He added that if Kwarteng was not going to resign, “you’re a pretty tin-eared politician,” referencing quotes from former Tory minister and current backbencher Grant Shapps.
The chancellor just said he was “focused on delivering the Growth Plan”.
Kwarteng also refused to specifically say he apologised, but he said he was showing “humility and contrition” by changing his mind.
