Cabinet minister on Thursday refused to rule out another screeching Government U-turn – this time over Corporation Tax.
Foreign Secretary James Cleverly was asked on Sky News whether Kwasi Kwarteng would climb down over his mini-Budget decision to not go ahead with a previously planned rise in this business levy from 19 per cent to 25 per cent next April.
Pressed on Sky News whether the Chancellor was sticking with this policy, Mr Cleverly told Sky News: “The Chancellor will come to the Despatch Box.
“It’s absolutely right that we have made it clear that we want to invest in businesses.
“It’s absolutely right that we help them stay competitive, we help them stay afloat, we help them to compete internationally, employ people and pay better wages.
“That’s why the package that the Chancellor put forward is pro-growth and is the right answer.”
Pressed later on Times Radio whether the Corporation Tax rise would still be stopped, Mr Cleverly said: “That is the announcement that the Chancellor made.
“You can’t grow the economy by taxing people and businesses higher.”
His comments came amid a report in The Times that Liz Truss has been told by her top advisers to abandon more key elements from last month’s mini-budget and raise Corporation Tax to show the Government has control of the public finances and stop the turmoil in the markets.
The editor of the ConservativeHome website, former MP Paul Goodman, predicted that there could be a “withdrawal of most of the mini-Budget” and suggested Mr Kwarteng may be sacked as Chancellor.
He said: “Perhaps the income tax cut would survive. The national insurance one is in place.
“But the Corporation Tax reduction would go. So might the stamp duty cut – and of course the end of the cap on bankers’ bonuses.”
Given the damage that such a major U-turn would do to the Government, he added: “I find it hard to see how Kwasi Kwarteng could survive in such circumstances. Sajid Javid might come in to the Treasury to replace him. But the Chancellor across-the-water would be Rishi Sunak. Truss would be ‘in office but not in power’.”
Mr Kwarteng has already been forced into a U-turn by a revolt of Tory MPs to ditch his plan to axe the 45p top rate of tax.