Liz Truss announces tax cut u-turn

Prime Minister Liz Truss has just announced an enormous U-turn on her government’s flagship plan to slash corporation tax for the wealthy, just hours after sacking chancellor Kwasi Kwarteng.

“You have asked me to stand aside as your Chancellor. I have accepted,” Kwarteng wrote in a letter to Truss announcing his resignation, which he posted on Twitter on Friday afternoon. 

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The move comes following the disastrous response to the former chancellor's ‘mini-budget’ in September, which sent the economy into a tailspin and saw the value of the pound plummet to an all-time low against the dollar.

Now Downing Street has been forced to backtrack on the £19bn-a-year tax cut after MPs warned it would leave a black hole in the economy.

The move is the second U-turn Liz Truss has been forced to make regarding her budget after backtracking on an earlier pledge to cut the 45p rate Income Tax cut for the rich.

"Liz is f*****. She is taking on markets and the Bank of England," an anonymous Tory MP said around the time of the budget’s release, claiming Truss and Kwarteng were ‘playing A-level economics with people’s lives’.

Conservative backbencher Rob Halfon MP was also quick to denounce the government’s spending plans after accusing Truss of wrecking ‘ten years of working class conservatism’ with her spending.

Lasting just 38 days in office, Kwasi Kwarteng is now the second shortest-serving chancellor in history.

The only person to beat him to the title, Iain Mcleod, died in 1970 just 30 days after assuming the position.

As recently as last night the Treasury was insisting the mini-budget plans were ‘going nowhere’, with Kwarteng insisting he was ‘100 percent’ sure he was remaining in post during an interview on Thursday evening.

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But following the announcement he cut short a trip to Washington DC to fly back to London, where he headed straight to Downing Street from the airport to be sacked by the prime minister.

Former health and foreign secretary Jeremy Hunt has been appointed to replace Kwarteng as the new chancellor, with Truss hoping the appointment of a ‘safe’ pair of hands will be enough to keep the government from collapsing.

This reversal represents a political disaster for the PM, with one unnamed Tory MP telling the Mirror that Liz Truss’ 'authority is seeping away in front of us' and she could be forced from power.

Some senior MPs have also floated the possibility of replacing Truss with a joint ticket of former chancellor Rishi Sunak and Penny Mordaunt, leader of the Commons in order to bring some 'grown-ups' back into the room.

However, former culture secretary Nadine Dorries pushed back against the rumoured coup on Twitter, stating: “It’s a plot not to remove a PM but to overturn democracy.”