Liz Truss’s painful press conference fails to calm Tory nerves

Liz Truss has just confirmed that she is U-turning on another part of her government’s not-so-mini Budget. After sacking her chancellor Kwasi Kwarteng this morning, the Prime Minister used a Downing Street press conference to say that she will now keep the increase in corporation tax, despite promising to ditch it. This ought to raise £18 billion in tax.

Explaining her decision, Truss said that while she still stuck to her vision for the country of a pro-growth government, it had become clear that her government’s fiscal event – which saw a range of unfunded tax cuts announced – ‘went further and faster than the markets were expecting’. 

As a result, she said, ‘I have decided to keep the increase in corporation task as agreed by the previous Government.’ Given reversing the corporation tax increase was a flagship policy of Truss’s leadership campaign, this is an incredibly embarrassing climbdown.