British Prime Minister Liz Truss has been forced to reverse plans to scrap the highest rate of income tax after the move caused rebellion among lawmakers and turmoil in the country’s financial sector.
Truss, and her new Chancellor of the Exchequer Kwasi Kwarteng, had announced a new “growth plan” on Sept. 23 that would give the wealthy tax cuts while forcing vast government borrowing to flip the UK’s economy out of years of stagnant growth.
According to Press TV, in reaction to the Truss government’s new plan, the British pound plunged to its lowest exchange rate in half a century, creating turmoil in political and economic rings.
In a blow to the Truss government’s prestige, Kwarteng on Monday released a statement saying, “We get it, and we have listened,” the new “growth plan” has become a distraction from the previous efforts to help households through a difficult time. “As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate.
The decision to reverse course is likely to put Truss and Kwarteng under huge pressure, less than four weeks after they came to power.
Already, more than half of the public are saying they have no confidence in the Conservative prime minister as the leader of the country.
Britain has changed four prime ministers in the last six politically tumultuous years.
“Too soon to say”
Anand Menon, a professor of European politics and foreign affairs at King’s College London and director for the UK in a Changing Europe think tank, noted that at this early stage of Truss’ premiership it was too soon to make predictions on her future.
Menon suggested that public confidence in Truss could rise in the coming months if her government’s “minibudget” an emergency package of measures achieved its aim of effectively reducing the strain of the cost of the living crisis on households and businesses.
Menon said, in addition to that, much more would depend on how the opposition Labour Party would seize the crisis as an opportunity to boost itself as a government-in-waiting.
He said it “hinges on Labour banging home the message” that “this is the government for the few.”