CHANCELLOR Kwasi Kwarteng has announced he will abandon the plan to scrap the 45p rate of income tax for top earners in a dramatic U-turn. 

He acknowledged that their desire to axe the 45% rate on earnings over £150,000 in a move to be paid for by borrowing had become a “distraction” amid widespread criticism.

Both Kwarteng and Prime Minister Liz Truss had been under pressure to back down on the measure announced in the mini budget on September 23. 

Despite the financial turmoil triggered by the package, the Prime Minister defended it as recently as Sunday.

In a post on Twitter, Kwarteng said: “We get it, and we have listened.”

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This was posted alongside a statement which read: “From supporting British business to lowering the tax burden for the lowest paid, our Growth Plan sets out a new approach to build a more prosperous economy. 

“However, it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country. 

“As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened.” 

Overnight, Grant Shapps had joined former Cabinet minister Michael Gove in a growing rebellion to criticise the plans during a cost-of-living crisis. 

Kwarteng had been preparing to tell the Conservative Party conference in Birmingham that they must “stay the course” band back their tax plans.

The statement continued: “This will allow us to focus on delivering the major parts of our growth package. 

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“First, our Energy Price Guarantee, which will support households and businesses with their energy bills. 

“Second, cutting taxes to put money back in the pockets of 30 million hard-working people and grow our economy. 

“Third, driving supply side reforms – including accelerating major infrastructure projects – to get Britain moving.”