Kwasi Kwarteng told the Conservative conference that it had been a “tough day” hours after U-turning on a tax cut for high earners, admitting his economic plan had caused “a little turbulence”.
The speech came after Kwarteng abandoned his plan to abolish the 45 per cent top rate of income tax in a humiliating reversal. There had been a growing Conservative revolt over the policy and a tumultuous reaction from markets.
Opening his speech, Kwarteng said: “What a day!” to laughter from the audience, and added: “It has been tough but we need to focus on the job in hand. We need to move forward. No more distractions. We have a plan and we need to get on and deliver it. That is what the public expect from the government.”
Kwarteng said he was still committed to cutting taxes, including the income tax reduction, reversing the national insurance rise and cutting stamp duty.
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In a short passage addressing the controversy, Kwarteng said: “I can be frank. I know the plan put forward only 10 days ago has caused a little turbulence. I get it. We are listening and have listened, and now I want to focus on delivering the major parts of our growth package.”
He said that “growing our economy should be our central and guiding mission”.
“Because with energy bills skyrocketing, a painful Covid aftermath, war on our continent, a 70-year-high tax burden, slowing global growth rates and glacially slow infrastructure delivery we couldn’t simply do nothing. We can’t sit idly by. What Britain needs more than ever is economic growth.”
Kwarteng said that the overriding mission of the government would start to show progress. “Even in the face of extreme volatility in global markets … we will show that our plan is sound, that it is credible and that it will increase growth. That is our pledge to the people of this country.”
Kwarteng said an energy support package, which froze bills at an average of £2,500 for a household, showed that the “government will always be on the side who need help”. He called it “one of the most significant interventions ever conceived by the British state”.
“This is a monumental support package … There is no doubt this is a substantial intervention. Doing nothing was simply not an option.”
Kwarteng also moved to calm market fears over the government’s approach to scrutiny, having previously declined to order interim forecasts from the Office for Budget Responsibility for his mini-budget.
“Our entire approach will be underpinned by a strong institutional framework, which enhances growth in our country, including our independent Bank of England and Office for Budget Responsibility. We will have a strong fiscal anchor with debt falling as a percentage of proportion of GDP over the medium term. That is the Conservative way.”
Attacking Labour, he said: “There is no path to higher sustainable growth without fiscal responsibility. Conservatives have always known this and we know it still. And it is because we are Conservatives that we remain absolutely committed to being serious custodians of the public purse. This is what defines us and separates us from the Labour Party.”