The new Liz Truss-led UK government on Monday made its first major U-turn on its central plank of tax cuts by withdrawing a policy to abolish the top rate for the wealthiest, following market turmoil and to avert an expected rebellion within the governing Conservative Party.
Chancellor Kwasi Kwarteng declared that the announcement in his mini-budget last month of a proposed abolition of the 45 pence tax rate, which applied to the top tier of income taxpayers from next April, had become a “massive distraction” to an otherwise sound growth plan for the economy.
It came after days of turmoil on the global financial markets spooked by the prospect of huge government borrowing costs and the pound tumbling against the dollar as the Bank of England had to step in to shore up the country's pension funds.
"We get it, and we have listened," Kwarteng tweeted before taking to the airwaves to defend what has been dubbed a screeching U-turn by the newly appointed government. Truss, who replaced Boris Johnson as prime minister after a hard-fought leadership battle with British Indian former Chancellor Rishi Sunak last month, soon referenced her Chancellor's tweet to add: "The abolition of the 45pc rate had become a huge distraction from our mission to get Britain moving.
"Our focus now is on building a high growth economy that funds world-class public services, boosts wages, and creates opportunities across the country."
It came just a day after she had insisted that her government remained committed to abolishing the top rate of tax for the highest earners in a BBC interview on Sunday, despite critics within her own party seeing it as sending out the wrong signal at a time when the majority of the country was struggling with a cost-of-living crisis and soaring household bills.