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Mini-budget U-turn on table as Kwasi Kwarteng flies home Mini-budget U-turn on table as Kwasi Kwarteng flies home
(32 minutes later)
The chancellor will speak with Prime Minister Liz Truss later on FridayThe chancellor will speak with Prime Minister Liz Truss later on Friday
Chancellor Kwasi Kwarteng has cut short his visit to the US for urgent talks in Downing Street, with a U-turn over the mini-budget on the table.Chancellor Kwasi Kwarteng has cut short his visit to the US for urgent talks in Downing Street, with a U-turn over the mini-budget on the table.
Prime Minister Liz Truss is facing calls to change her plan to calm market turbulence and reassure her party.Prime Minister Liz Truss is facing calls to change her plan to calm market turbulence and reassure her party.
Mr Kwarteng is flying home early from Washington DC for discussions with the prime minister and Conservative MPs.Mr Kwarteng is flying home early from Washington DC for discussions with the prime minister and Conservative MPs.
Reports on Thursday suggested the government was looking at which parts of its tax-cutting plans to ditch.Reports on Thursday suggested the government was looking at which parts of its tax-cutting plans to ditch.
Many Tory MPs think a further change of plan is inevitable, following a previous U-turn on Ms Truss's plan to scrap the top rate of income tax.Many Tory MPs think a further change of plan is inevitable, following a previous U-turn on Ms Truss's plan to scrap the top rate of income tax.
A mini-budget announced by Mr Kwarteng last month - featuring a raft of tax cuts, funded by borrowing - spooked financial markets and prompted a drop in the value of the pound. Live updates: Chancellor to return for crunch talks
Chris Mason: Can Liz Truss salvage her premiership?
Pound rises on talk of mini-budget U-turn
A mini-budget announced by Mr Kwarteng last month - featuring a £45bn raft of tax cuts, funded by borrowing - spooked financial markets and prompted a drop in the value of the pound.
The continuing turmoil prompted an intervention from the Bank of England, which involved buying government bonds to stabilise their value.The continuing turmoil prompted an intervention from the Bank of England, which involved buying government bonds to stabilise their value.
The Bank has said it will withdraw that programme of emergency support as planned on Friday. The Bank has said it is withdrawing that programme of emergency support as planned on Friday. But the pound has rallied in value following speculation in Westminster that another U-turn was in the offing.
Mr Kwarteng had been in Washington DC for a meeting of global finance ministers.Mr Kwarteng had been in Washington DC for a meeting of global finance ministers.
Speaking about the change in his travel plans, a source close to the chancellor said he "really wants to engage not only with government colleagues, but also MPs" over the financial plans.Speaking about the change in his travel plans, a source close to the chancellor said he "really wants to engage not only with government colleagues, but also MPs" over the financial plans.
The source said "fiscal responsibility is absolutely core to what we're trying to do".
No 11 dismissed a comparison to the Greek financial crisis of 2011, when its finance minister was hauled back from an international meeting to meet the country's prime minister.No 11 dismissed a comparison to the Greek financial crisis of 2011, when its finance minister was hauled back from an international meeting to meet the country's prime minister.
A source said that was a debt crisis "on a completely different scale to anything that's happening in our markets". Trade Minister Greg Hands told Sky News it was "not unusual" for a minister to cut short an international visit by a day.
Chris Mason: Can Liz Truss salvage her premiership? The chancellor began his journey back to the UK a day earlier than planned
The tense atmosphere in Westminster was apparent as the BBC spoke to dozens of sources across Parliament and the government. The tense atmosphere in Westminster was apparent as the BBC spoke to dozens of sources across Parliament and the government on Thursday.
"It's checkmate, we're screwed," one Tory MP remarked."It's checkmate, we're screwed," one Tory MP remarked.
"There is no question in my mind, they'll have to junk loads of this stuff and U-turn," another said."There is no question in my mind, they'll have to junk loads of this stuff and U-turn," another said.
If the government does announce changes to its plans it is not clear when this might happen.If the government does announce changes to its plans it is not clear when this might happen.
The chancellor began his journey back to the UK a day earlier than planned Mr Kwarteng has said he was "not going anywhere" and when asked if he and Ms Truss would still be in their jobs this time next month, replied: "Absolutely, 100%."
On Thursday, he said he was "not going anywhere" - when asked if he and Ms Truss would still be in their jobs this time next month, he said: "Absolutely, 100%." The chancellor is set to spell out how he will pay for the government's £43bn package of tax cuts and get the UK's national debt falling in a statement on 31 October, alongside an independent economic forecast.
As it stands, Mr Kwarteng is set to spell out how he will pay for the government's £43bn package of tax cuts and get the UK's national debt falling in a statement on 31 October, alongside an independent economic forecast. Although the government has already scrapped its plan to scrap the top rate of income tax, this only made up £2bn of the tax cuts announced by the chancellor last month.
The government has already U-turned on its plan to scrap the top rate of income tax, but this only made up £2bn of the tax cuts announced by the chancellor last month. While some Tory MPs think the government's tax-cutting plans should be reversed, others believe the help with energy bills should be more targeted.
Some Tory MPs think the government's tax-cutting plans should be reversed, while others believe the help with energy bills should be more targeted. Watch: I am not going anywhere - Kwasi Kwarteng speaking on Thursday
Other scenarios being discussed by Tory MPs include the chancellor resigning or the prime minister being ousted. Watch: I am not going anywhere - Kwasi Kwarteng speaking on Thursday
However, there is little agreement on what should happen next or who should replace Ms Truss if she is removed.
According to the Times, senior Conservatives are holding talks about replacing Ms Truss with a joint ticket of Rishi Sunak and Penny Mordaunt, who both ran for the leadership this summer.
Unlike the summer leadership contest, MPs would propose just one person to succeed the PM, with the other individual taking a senior cabinet role, the paper reported.
Watch: I am not going anywhere - Kwasi Kwarteng speaking earlier
Watch: I am not going anywhere - Kwasi Kwarteng speaking earlier
Among the possible U-turns, there has been speculation the government could reverse its plan for corporation tax.Among the possible U-turns, there has been speculation the government could reverse its plan for corporation tax.
Ms Truss has pledged to scrap a planned rise to the tax, which was set to increase from 19% to 25% in 2023.Ms Truss has pledged to scrap a planned rise to the tax, which was set to increase from 19% to 25% in 2023.
When asked about the positive market response to the speculation of a U-turn on corporation tax, Mr Kwarteng told the Daily Telegraph: "Let's see."When asked about the positive market response to the speculation of a U-turn on corporation tax, Mr Kwarteng told the Daily Telegraph: "Let's see."
However, he added that he still thought ensuring "competitive" tax rates for businesses was a "great idea".However, he added that he still thought ensuring "competitive" tax rates for businesses was a "great idea".
Former Home Secretary Priti Patel, meanwhile, told Sky News the market would now "dictate" the prime minister's decision on corporation tax "primarily because we want to see stability". Former home secretary Priti Patel told Sky News the market would now "dictate" the prime minister's decision on corporation tax "primarily because we want to see stability".
Other scenarios being discussed by some Tory MPs include the chancellor resigning or the prime minister being ousted.
But there is little agreement on what should happen next or who should replace Ms Truss if she is removed.
According to the Times, senior Conservatives are holding talks about replacing Ms Truss with a joint ticket of Rishi Sunak and Penny Mordaunt, who both ran for the leadership this summer.
Unlike the summer leadership contest, MPs would propose just one person to succeed the PM, with the other individual taking a senior cabinet role, the paper reported.
The pitfalls lying ahead for an embattled PMThe pitfalls lying ahead for an embattled PM
Where are the other bits of government's growth plan?Where are the other bits of government's growth plan?
What will the tax changes mean for you?What will the tax changes mean for you?
Senior Tories are continuing to call for the government to change course.Senior Tories are continuing to call for the government to change course.
Alicia Kearns, the new chairwoman of the Commons Foreign Affairs Committee, said the government had to "adapt" during a "crisis". Mel Stride, the chairman of the Treasury Select Committee, called on the chancellor to make a "significant" announcement "sooner rather than later".
Asked if the government's tax cuts should be reversed, she told the BBC: "There are some that are worth keeping, there are some that are not, but do I want to see mass borrowing at this point? I don't think that's reassuring." However, he told BBC Breakfast that he did not back a change in leadership, saying "the last thing we need is more market turbulence".
Former minister Johnny Mercer called for a "course correction" from No 10, describing the impact of rising mortgage rates on people who want to buy a home as "unconscionable" and "politically unsurvivable". Former minister Johnny Mercer called for a "course correction" from No 10, describing the impact of rising mortgage rates on people who want to buy a home as "politically unsurvivable".
"Get on and do it - we all know it's coming. It's not a game for folks down here," he said of his Plymouth Moor View constituency.
Scottish Conservative leader Douglas Ross called on the prime minister and chancellor to "get a grip" on the economy.Scottish Conservative leader Douglas Ross called on the prime minister and chancellor to "get a grip" on the economy.
"There have been mistakes, they've got to work this out to settle the markets, to settle the economy and to get things back up and running again," he told the BBC One's Question Time. But, asked whether he believed Ms Truss could win the next general election, he replied: "Yes."
Asked whether he believed Ms Truss could win the next general election, he replied: "Yes." Other Tory MPs expressed support for the prime minister and said she must not reverse her plans.
But other Tory MPs expressed support for the prime minister and said she must not reverse her plans.
Sir Christopher Chope, a Truss backer, told the BBC Two's Newsnight: "If we were to increase corporation tax having said that we're not going to, that would be totally inconsistent with the prime minister's policy of promoting growth, growth and growth."Sir Christopher Chope, a Truss backer, told the BBC Two's Newsnight: "If we were to increase corporation tax having said that we're not going to, that would be totally inconsistent with the prime minister's policy of promoting growth, growth and growth."
He added that a U-turn would be a "complete betrayal of that she believed in" and he believed it would not happen. He added that a U-turn would be a "complete betrayal" of what she believed in, saying he did not think it would not happen.
Wales Office Minister David Davies said the government had to be "flexible" in what he described as an economic "storm". Wales Office Minister David Davies said the government had to be "flexible" in what he described as an economic "storm", adding that Mr Kwarteng should remain chancellor.
However, he said Mr Kwarteng should remain chancellor and refused to accept recent market turmoil was due to a "mistake" by the government.