Kwasi Kwarteng dashes home early from US for tax U-turn talks

Kwasi Kwarteng is urgently returning to London a day early as the government discusses whether to ditch more of the taxes policies in his budget.

The chancellor has been in the US for meetings of the World Bank and the IMF – which had openly criticised his policies.

He was to head back later on Friday but after a hasty briefing with journalists late on Thursday he announced he would fly back to Britain overnight.

It comes after The Independent reported that officials in Downing Street are going through Mr Kwarteng’s budget line-by-line to work out which bits they can scrap.

A massive reduction in the planned rate of corporation tax costing tens of billions of pounds is thought to be in the crosshairs in a desperate bid to restore confidence in the UK’s finances.

Financial markets went haywire after Mr Kwarteng’s budget prioritised huge unfunded tax cuts, mainly for wealthier people, and he has already had to U-turn on a cut to the top rate of tax.

The financial chaos has led to surging government borrowing costs, higher mortgage rates, and a tanking Pound – and has required multiple interventions by the Bank of England.

Despite widespread criticism of the budget’s effects, and Tory poll ratings tanking to record deficits with Labour, Mr Kwarteng on Thursday insisted that he and prime minister Liz Truss were “100 per cent” not resigning.

A Treasury official insist the chancellor was returning early for talks on “the medium-term fiscal plan”.

They added that it was “completely different” to when Greece’s finance minister left an international meeting a day early in response to that country’s 2011 financial crisis.

Speaking on Friday morning as the chancellor was in the air over the Atlantic trade minister Greg Hands downplayed the prime minister’s dash for London.

“It’s not unusual to come back a day early from an international visit,” Mr Hands told Sky News

“The major meat of the meetings of the IMF and World Bank have finished.”

But Mr Hands indicated the Government could make economic announcements ahead of the medium-term fiscal plan on October 3.

“Well look, the Government will make responses as appropriate as events happen, but the absolutely commitment is to publish the medium-term fiscal plan,” the minister said.

“This is looking at how the Government is going to pay for everything, how the Government is going to set its budget in the coming years and that will be laid out in just two weeks’ time.”

Mr Hands also urged Tory MPs to “get behind” Liz Truss as prime minister amid reports that some Tory MPs are plotting to replace her with Rishi Sunak or Penny Mordaunt.

“Liz Truss is our Prime Minister, she has my confidence she should have the confidence of all Conservative MPs, the whole Conservative Party and actually deserves the confidence of the country as we go into quite difficult economic times with the rise in energy driven by Vladimir Putin’s invasion of Ukraine, the turmoil in global financial markets,” he told the broadcaster.

“We need to get behind our Prime Minister as a party and show Liz Truss the confidence that she deserves – and Kwasi Kwarteng – to make these difficult decisions going forward.”

But Liberal Democrat Treasury spokesperson Sarah Olney said: “As soon as the Chancellor steps onto the tarmac he should apologise to the British people and announce his resignation.

“Dashing back to the UK is the latest humiliation after weeks of chaos. It is time his Chancellorship was put out of its misery, along with his disastrous botched budget.”