Chancellor Kwasi Kwarteng has announced that the government will not be proceeding with their plans to abolish the 45p rate of income tax.

Confirming the U-turn in a statement entitled ‘We get it’, Kwarteng said: “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.”

It is estimated that the cut of the 45p rate of income tax would have cost £2bn a year, with the overall package of tax cuts reportedly costing upwards of £45 billion by 2026-27.

The abolition of the 45p rate was part of an overall series of measures outlined in the Chancellor’s Growth Plan to make our tax system lower and fairer.

The Chancellor is due to set out his Medium-Term Fiscal Plan on 23 November. The Chancellor also announced that that there would be an Office for Budget Responsibility (OBR) forecast this calendar year. He has requested that the OBR sets out a full forecast alongside the Fiscal Plan, on 23 November.