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Treasury Committee Chair Calls For "Fundamental Reset" As Chancellor Dashes Back From US

Treasury Committee Chair Calls For 'Fundamental Reset' As Chancellor Dashes Back From US

Kwasi Kwarteng is returning early from his US trip (Alamy)

3 min read

Senior Conservative MP Mel Stride has said Chancellor Kwasi Kwarteng should "row back" on tax plans that have unleashed economic chaos in to restore confidence in the financial markets.

Kwarteng cut short a trip to the United States a day early, travelling back to the United Kingdom in the early hours of Friday morning, after rumours the government is considering U-turning on further parts of their mini-Budget.

Kwarteng ended his visit to the International Monetary Fund as speculation mounts that No 10 is poised to reverse plans to scrap a rise in corporation tax.

Just hours earlier the embattled Chancellor said the government was standing by his "mini-Budget", parts of which have already been scrapped, and that he was "100 per cent not going anywhere" when asked if he could be forced to resign over the financial turmoil.

But Tory MP Mel Stride, who chairs the powerful Commons Treasury Select Committee, said he believed a "fundamental reset" was now needed to restore market confidence.

"What I would like to hear is that these rumours there will be a reset moment around the tax measures he announced in late September are correct, because I think things have reached a stage now with the markets and with confidence in those financial markets where we need a fundamental reset," he told BBC Breakfast.

He said he hoped Kwarteng was planning to "engage in conversations with the Prime Minister and others and to row back on some of those unfunded tax cuts that were announced," when the Chancellor arrives back in London later today.

Stride added that "unwinding" the proposed corporation tax changes should be "right at the heart" of the government's plans.

"You could end up in a circumstance that is worst of all worlds, in that you've U-turned and it doesn't actually settle markets in the way we need to," he said. 

But Trade Minister Greg Hands has denied Kwarteng's decision to scramble back from the US was a sign of chaos in the government, saying he was "coming back for discussions with colleagues".

"It's not unusual to come back a day early. The Prime Minister and Chancellor are absolutely determined to stick to their plans."

Asked if the Chancellor could use his planned fiscal statement on 31 October to unwind some of the measures, Hands told Sky News to "wait and see".

"You won't have long to wait for the 31st of October for the Chancellor to lay out those plans," he said.

"I do say that the Prime Minister and the Chancellor are absolutely resolute, determined.

"The growth plan is the centrepiece, but we'll have to see some of the detail including a full forecast from the Office for Budget Responsibility on the 31st of October."

He denied reports in The Times that Tory MPs were plotting to replace Truss with Commons leader Penny Mordaunt and former leadership candidate Rishi Sunak.

"I don't recognise that story at all. I was a supporter of Rishi Sunak over the summer, I'd be very surprised at that story. I was talking only yesterday with Penny Mordaunt."

Calling for the party to "unite behind our Prime Minister," he added: "She was our choice of the Conservative Party just a few weeks ago."

But shadow climate change secretary Ed Miliband told Sky News he believed Kwarteng was returning from his meeting with IMF officials because his economic plans were "falling apart at the seams".

"There is no other finance minister who's rushing back on an aeroplane early from the IMF meetings," he said. 

"There's no other country where the Central Bank is said to have an emergency buying spree. There's no other country where a government's economic policy is falling apart at the seams.

"This is a collective meltdown on the part of the government. The British people deserve so much better than what this government is putting the country through."

 

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