Kwasi Kwarteng to tell Tory conference 'we must stay course' on tax cuts as infighting dominates opening day

Michael Gove has labelled Liz Truss’s tax cut plans “not Conservative” as infighting dominated the opening day of Tory conference.

The former cabinet minister even threatened to vote against the mini-budget in comments that add to the growing pressure on the Prime Minister.

In a volatile first day of Conservative party conference in Birmingham, party chair Jake Berry warned those who voted against the plans would be kicked out the party.

Earlier Ms Truss acknowledged mistakes over the mini-budget but insisted she was standing by tax-cutting plan as she refused to rule out public spending cuts.

Chancellor of the Exchequer Kwasi Kwarteng and the Prime Minister Liz Truss had a rocky start to Tory conference.

The Prime Minister admitted she could have done more to prepare the ground for Kwasi Kwarteng’s financial statement, which spooked the markets, sending the pound plummeting and forcing a £65 billion intervention by the Bank of England to restore order.

Ms Truss was accused of throwing her Chancellor “under the bus” by saying the mini-budget’s most controversial measure – the abolition of the 45 per cent tax rate on earnings over £150,000 – was not discussed with the Cabinet but was a decision made by Mr Kwarteng.

Mr Kwarteng will take to the conference stage today and is set to tell activists that “we must stay the course” with his plans to avoid a future of “slow, managed decline”.

But Mr Gove was among senior figures to give a scathing assessment of the plans, branding them un-Conservative. Appearing at numerous events through the day, the Mr Gove accused Ms Truss of showing an “inadequate realisation” of the scale of the problem.

BIRMINGHAM, ENGLAND - OCTOBER 02: MP for Surrey Heath Michael Gove is interviewed at a fringe meeting at the annual Conservative Party conference on October 02, 2022 in Birmingham, England. This year the Conservative Party Conference will be looking at "Getting Britain Moving" with more jobs and higher salaries. However, delegates are arriving at the conference as the party lags 33 points behind Labour in the opinion polls. (Photo by Leon Neal/Getty Images)

He said: “Ultimately, at a time when people are suffering when you have additional billions of pounds in play, to have as your principal decision, the headline tax move, cutting tax for the wealthiest, that is a display of the wrong values.

“This is a time of profound uncertainty and concern for people across the country. We’re in grim economic circumstances, people are facing the prospects of their mortgages rising, people are looking to Liz and Kwasi and they want reassurance.

“They want to know this plan has been well thought through, that it will work, that it will command the confidence of the money men in the markets. But they will also want to know that the Prime Minister and the Chancellor share their values.”

The prominent backbencher even suggested he could vote against the plans in the House of Commons, as Conservative critics eye a possible rebellion.

“I don’t believe it’s right,” he said, when asked if he would vote for the mini-budget.

Ms Truss’s defence of her £45 billion of tax cuts to be paid for by borrowing came as she faces the challenge of reassuring the markets and Tory members unnerved by the market turbulence and an opinion poll crash.

She said: “I do stand by the package we announced and I stand by the fact we announced it quickly, because we had to act.

“But I do accept we should have laid the ground better… I have learnt from that and I will make sure that in future we do a better job of laying the ground.”

The move to axe the top rate of income tax for the nation’s highest earners during a cost-of-living crisis and to pay for it through borrowing has been widely criticised, including by some Tory MPs.

Ms Truss made Mr Kwarteng own the controversial decision, saying it was not discussed with the wider Cabinet, leading to accusations she had thrown the Chancellor “under a bus”.

She said: “It was a decision the Chancellor made.”

Nadine Dorries, the former culture secretary who backed Ms Truss to be Prime Minister, criticised her remarks but the Chancellor’s allies sought to downplay suggestions of a rift.

A source close to Mr Kwarteng said: “While the Chancellor obviously makes all tax decisions, the Prime Minister and Kwasi are in lockstep on this.”

Ms Truss also promised that pensions will rise in line with inflation, saying she has “committed to the triple lock” protecting them against price increases.

However, she refused to give the same guarantee for benefits in April, despite prices having risen by 9.9 per cent compared with a year ago and the Bank of England expecting inflation to peak at 11 per cent.

Some Tory MPs are already preparing to vote with Labour to prevent measures announced by the Chancellor on September 23, including abolishing the top rate of income tax.

Asked on Sky’s Sophy Ridge on Sunday whether this would result in them losing the party whip, Conservative chairman Mr Berry said: “Yes.”

He also urged Tory MPs to unite behind Liz Truss and her programme, saying she had “a mandate both from colleagues and our membership”.

The Tory chairman added: “I’m sure that if we do that it will lead ultimately to long-term electoral success.”

It comes as Mr Kwarteng is set to defend the plan and secure his job in a crunch Conservative Party conference speech.

He will insist the gamble made by the Tories to cut taxes and axe red tape in the hope of increasing economic growth to an annual trend of 2.5 per cent was the correct approach.

In a speech seeking to stress the global nature of the problem, he will say that “major currencies” are “wrestling an incredibly strong US dollar”.

Mr Kwarteng will say: “I refuse to accept that it is somehow Britain’s destiny to fall into middle income status or that the tax burden reaching a 70-year-high is somehow inevitable.

“We needed a new approach, focused on raising economic growth.

“That is the only real way to deliver higher wages, more jobs, and crucially, revenue to fund our precious public services and it is the only way to achieve long-term fiscal sustainability.

“We must stay the course. I am confident our plan is the right one.”

The Chancellor is expected to set out further details of his reforms, including the so-called “Big Bang 2.0” package of financial regulation, within the coming weeks ahead of a “medium-term fiscal plan” on November 23, which will be accompanied by the Office for Budget Responsibility’s forecasts.

However, his speech is not expected to offer any more explanation as to the funding the plans, with several MPs who’ve seen the speech saying “he’ll just make things worse”.

The opening day also saw Jacob Rees-Mogg chased and heckled by protesters.

The Business Secretary faced a hostile reception as he crossed Victoria Square in the city centre, where hundreds of demonstrators had gathered to vent their anger at the Government.

Escorted by several police officers, Mr Rees-Mogg was pursued by a loudly booing and jeering crowd, some of whom shouted “Tory scum”, as he headed towards his party’s annual gathering at the nearby International Convention Centre.

Mr Rees-Mogg played down the protests as a “fact of democracy”.

Earlier, RMT general secretary Mick Lynch told a rally near the conference centre that “we are in the middle of a class struggle”.

He said: “We pay tax to support our people not to subsidise the rich.

“The rich should be subsidising us”.

He also said the Government was “acting in the interests of their people”.

To loud cheers, he said: “We’re going to change this country, we’re going to change society.”