ARE TORIES ON BRINK OF 45p TAX U-TURN?

As two ex-ministers lead mounting revolt and Whitehall insider tells Mail row is ‘distracting’ from mini-Budget’s benefits...

TWO former ministers led a mounting Tory revolt over the plan to scrap the 45p tax rate last night amid speculation the Government could U-turn on the move.

Michael Gove sparked a backlash from fellow Tories yesterday as he called for Liz Truss and Kwasi Kwarteng to ditch the plan to abolish the 45p tax rate.

As the row threatened to overshadow the Conservative Party conference, former transport secretary Grant Shapps last night echoed Mr Gove’s comments, saying the move to abolish the rate was ‘tin eared’.’

A defiant Mr Kwarteng is today expected to use his first conference speech as Chancellor to pledge to ‘stay the course’ with his plans, saying that years of economic policy consensus have left Britain in a state of ‘slow, managed decline’ that must be reversed.

However, last night speculation was mounting that he and Miss Truss could perform a U-turn and ditch the 45p policy – the price of shoring up Tory support for the rest of the mini-Budget measures. A senior Whitehall insider told the Daily Mail: ‘The 45p row is becoming a massive distraction which

is drowning out all the other vital and urgent things in the Budget.’

In a pre-emptive strike yesterday, Mr Gove said it was ‘not Conservative’ to use ‘borrowed money’ to fund scrapping the 45p income tax rate. And Mr Shapps last night echoed his comments, saying the Government should not be handing ‘big giveaways to those who need them least’.

Mr Gove’s intervention has sparked disputed claims that he is acting as an outrider for Rishi Sunak, who he backed against Miss Truss in the Tory leadership race.

A string of other Sunak-supporting MPs spoke out against the Government’s plan to axe the top tax rate after Mr Gove described it as ‘a display of the wrong values’.

Writing in The Times today, Mr Shapps, who also backed Mr Sunak, said: ‘This politically tin-eared cut, not even a huge revenue raiser and hardly a priority on the prime ministerial to-do list, has managed to alienate almost everyone, from a large section of the Tory parliamentary party taken by surprise to the City traders who will actually benefit.’

Last night senior Tories warned that Mr Gove’s actions could further damage the party, which is already trailing heavily behind Labour in the polls.

One No 10 insider described the former minister as ‘deluded’.

Another ally said his decision to tour the conference criticising the Government’s programme was ‘massively unhelpful, but sadly not a surprise’.

Former Tory leader Sir Iain Duncan Smith accused Mr Gove of serial disloyalty, referring to his role in ousting Boris Johnson from No 10. He said: ‘It’s Sunday, the first day of conference for a new Tory leader and Michael

‘Has alienated everyone’

Gove is out there stabbing her in the back. Isn’t getting rid of one prime minister enough for him?

‘Someone needs to confiscate his knives – he is a danger to people and to the party. He said he was leaving politics but it proved too good to be true and he’s back again trying to destabilise a new PM.’ The row came as:

■ Miss Truss admitted errors were made in the handling of the mini-Budget, saying ministers could have ‘laid the ground’ better, but insisted she will not change course.

■ Former minister Nadine Dorries accused Miss Truss of throwing Mr Kwarteng ‘under a bus’ by claiming he alone was responsible for the decision to scrap the 45p income tax rate. ■ The Prime Minister said she would ensure the state pension rises in line with inflation next year – but refused to make the same commitment for benefits. ■ Tory chairman Jake Berry warned that Conservative MPs voting against any aspect of the Budget would be suspended from the party.

■ Two senior Conservatives needed police escorts as they were heckled by protesters shouting ‘Tories out’ outside the conference yesterday.

Mr Kwarteng’s surprise decision to announce the end of the 45p tax rate in last month’s emergency mini-Budget was a focal point for Tory critics of Miss Truss last night.

The Prime Minister yesterday said the controversial tax cut, saying was ‘part of an overall package of making our tax system simpler and lower’. But she stressed it was a relatively minor

stressed it was a relatively minor Budget measure compared with the Energy Price Guarantee, which could end up costing £150billion.

In an appearance on the BBC’s Sunday With Laura Kuenssberg show, Mr Gove said it was one of a number of ‘mistakes’ made by the PM and Mr Kwarteng which had left him ‘profoundly’ concerned. Asked if he would vote for the mini-Budget if it remains unchanged, he suggested he would not, saying: ‘I don’t believe it’s right.’

He continued his criticism during a series of other appearances on the conference fringe, saying: ‘It’s going to be very, very, very difficult to argue it’s right to reduce welfare when we’re also reducing tax for the wealthiest.’

A Tory source expressed frustration with Mr Gove’s bid to encourage opposition to the tax cut, saying: ‘When people have seen the full package, including the supply side reforms to boost growth and the commitment to control debt, we are confident they will feel differently about this – provided they have not already had their heads turned.’

By last night around a dozen Conservative MPs had indicated they would vote against the 45p tax cut. Andrew Bowie, a former parliamentary aide to Theresa May, said Mr Gove was ‘right’ to describe the unfunded 45p tax cut as ‘un-Conservative’.

A friend of Mr Gove denied he was attempting to undermine the Government, and insisted he was not acting on behalf of Mr Sunak or anyone else.

‘He is just doing what he thinks is right. I think he is speaking for an awful lot of MPs, but he is not coordinating with anybody,’ the source said.