Chancellor Kwasi Kwarteng has confirmed that the government is axing plans to give the wealthiest 1% a tax cut following a bitter backlash from Tory MPs.

Mr Kwarteng said in a tweet that the measure had become a “distraction” from his objection to grow the economy.

He said: “We get it, we have listened.”

Politics live: Major U-turn after prominent Tories speak out

The 45p income tax cut policy was one of a series that prompted turmoil in the markets over the past week, with the pound reaching record lows against the dollar.

The plan was announced in the mini-budget, last Friday, but would have had to go to a vote before it could be approved.

Former cabinet minister Grant Shapps, one of the big hitters in the Tory party who had publicly criticised the policy, told Sky News that it would not have got through parliament.

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“There is no mathematical way MPs would go and vote for this,” he said.

“The policy didn’t stack up and it didn’t make sense.

“You didn’t have to knock on many doors to see how unpopular it had been.”

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Former Transport Secretary Grant Shapps has told Sky News he was ‘pleased’ that the government decided to make a U-turn on the 45p tax rate

The plan to scrap the 45p rate, which is paid by people who earn over £150,000 a year, was criticised as unfair amid the cost of living crisis.

The chancellor and Ms Truss have spent much of the past 10 days doubling down on their proposals, with the Prime Minister defending the tax cut as recently as yesterday.

They had even resisted backing down in the face of criticism from the International Monetary Fund and an extraordinary £65 billion emergency intervention by the Bank of England to restore order.

Mr Kwarteng abandoned the policy hours before he was due to defend it at the Conservative Party conference.

Asked where the U-turn had left his credibility, the chancellor told BBC Breakfast: “We are 100% focused on the growth plan.”

He added: “I have been in Parliament for 12 years, there have been lots of policies which, when government listens to people, they have decided to change their minds.”

Asked if it had considered resigning, he said: “Not at all. What I am looking at is the growth plan and delivering what is a radical plan to drive growth in this country, to reduce taxes, to put more money that people earn in their pockets.”

Moments after Mr Kwarteng confirmed the U-turn, Ms Truss tweeted: “We get it and we have listened.

“The abolition of the 45pc rate had become a distraction from our mission to get Britain moving.

“Our focus now is on building a high growth economy that funds world-class public services, boosts wages, and creates opportunities across the country.”

‘They have destroyed their economic credibility’

The pound surged higher in overnight trading on Monday as reports emerged that the government would abandon the decision to axe the 45p tax rate.

Labour pressed for Ms Truss and Mr Kwarteng to back down on the rest of their tax-cutting mini-budget.

Shadow chancellor Rachel Reeves said the reversal today “comes too late for the families who will pay higher mortgages and higher prices for years to come”.

“The Tories have destroyed their economic credibility and damaged trust in the British economy,” she said.

“This is not over – it’s not just some distraction.

“The Tories need to reverse their whole economic, discredited trickle down strategy.

“Their kamikaze Budget needs reversing now. As the party of fiscal responsibility and social justice, it will come to the Labour Party to repair the damage this Tory government has done.”