Don’t wait for ‘inevitable’ U-turn on mini-Budget, George Osborne tells Liz Truss

Chances needed now, suggests former chancellor – as Priti Patel says ‘market forces’ could force reversal

Former Conservative chancellor George Osborne has urged Liz Truss and Kwasi Kwarteng to hurry up with an “inevitable” U-turn on their mini-Budget.

The senior Tory figure questioned whether it was worth waiting until the end of October to make reversals, as the government reportedly considers backtracking on corporation tax.

“Given the pain being caused to the real economy by the financial turbulence, it’s not clear why it is in anyone’s interests to wait 18 more days before the inevitable U-turn on the mini budget,” Mr Osborne tweeted.

Former home secretary Priti Patel also suggested that “market forces” could force a U-turn on corporation tax cuts in the hours ahead.

Speaking to Sky News, Ms Patel suggested that the need for financial stability “will probably dictate some of these changes now”.

The PM and chancellor last month cancelled a planned rise in the tax on company profits from 19p to 25p, but there are growing expectations it could be fully or partially ditched.

It follows The Independent’s revelation this week that officials at No 10 are going through Mr Kwarteng’s package looking for possible climbdowns to restore financial confidence.

Asked in New York whether he was going to U-turn on big measures, Mr Kwarteng replied: “Our position hasn’t changed. I will come up with a medium-term fiscal plan on 31 October … there’ll be more detail then.”

The chancellor also said he is “absolutely 100 per cent” not resigning as chancellor following criticism.

It came as IMF president Kristalina Georgieva rebuked the Truss government for allowing its loose fiscal policies to run counter to the Bank of England’s efforts to rein in inflation.

Asked about the UK government, Ms Georgieva also made clear she would welcome U-turns. “Don’t prolong the pain … if the evidence is that it has to be a recalibration it is right for governments to do so.”

The Office for Budget Responsibility (OBR) forecast – to be presented alongside the chancellor’s 31 October fiscal plan – will give an assessment on plans to balance the books.

But business secretary Jacob Rees-Mogg has suggested the government could ignore OBR forecast. Asked whether Ms Truss has confidence in the OBR’s ability to deliver accurate forecasts, the PM’s official spokesman replied: “Yes.”

Crossbench peer Jim O’Neill, a former Treasury minister, said the government should abandon the tax cuts as soon as possible. “The quicker they reverse the better – to carry on down this path is not far off insanity,” he said.

Alicia Kearns MP, the foreign affairs select committee chair, also called on the government to reverse the tax cuts in the mini-Budget – saying she did not want “our children have to pay this back for decades to come”.

She told LBC: “The markets are not woke, the markets are not on the left, they are not anti-government, the fact they have been spooked is something that should be taken incredibly seriously.”

Tory MP Stephen Hammond argued that allowing corporation tax to rise “brings in quite a lot of money”, adding: “If [the government] showed some fiscal probity by doing this it may mean borrowing costs don’t need to go up so much in November.”

Pressure has been ramped up on the Ms Truss and Mr Kwarteng since their disastrous mini-Budget, due to days of turmoil in the markets, the fall in the pound and rises in mortgage rates.

Tory MP Robert Halfon told Ms Truss she had “trashed the last 10 years of workers’ Conservatism” at a meeting of the backbench 1922 Committee on Wednesday.

Rishi Sunak and Penny Mordaunt are among senior figures now being tapped as possible replacements for the PM, according to Paul Goodman, editor of ConservativeHome.

But foreign secretary James Cleverly told the Today programme that any attempt to replace Ms Truss now would be a “disastrously bad idea politically and also economically”.

And Sir Christopher Chope said Tory critics should “shut up” – predicting the Tories would win the next general election under Ms Truss.