The Prime Minister of the United Kingdom, Liz Truss, has defended this Wednesday at the Conservative Party convention that “lowering taxes is the right moral and economic thing” just a few days after she had to reverse her plan to lower taxes to the richest.
Liz Truss backtracks and will not lower taxes on the richest
The British government had proposed lowering the top income tax bracket from 45% to 40%, prompting criticism from some Conservative MPs, the International Monetary Fund and triggering a sharp drop in the pound. The abolition of the tax cut for the wealthiest “became a distraction” from the rest of the plan’s measures, Truss has said. “That’s why we won’t proceed with her. I understand and I have heard”, added the prime minister, who was still defending on Sunday in a BBC interview the decision to lower taxes on higher incomes.
Truss’s explanation is the same as Kwarteng’s on Monday when he announced that the tax cut would not go ahead. “It is clear that the abolition of the 45% rate had become a distraction from our primary mission of addressing our country’s challenges. As a consequence, we will not go ahead with its abolition. We understand, and we have listened,” the minister said in a statement.
In his speech, Truss said that the Conservative Party “will always be the low-tax party” and that it will lower the tax burden. “Reducing taxes is the right thing to do from a moral and economic point of view. Morally because the State does not spend its own money, but that of the citizens. Economically because if people keep more of their own money, they are inspired to do more of what they know how to do. This is what makes the economy grow.”
The Government has a clear plan for the country, has indicated the prime minister, who assumed power a month ago. “I have three priorities for our economy: growth, growth and growth,” she said to applause.
“As the last few weeks have shown, it will be difficult. Whenever there is a change, there is a disorder. Not everyone will be in favor. But everyone will benefit from the result: a growing economy and a better future”, he has said. Truss has also promised that he will build an economy that “takes advantage of the opportunities of Brexit” and has said that before the end of the year “all the bureaucracy inherited from the European Union” will have disappeared.
The fiscal plan presented by Kwarteng on September 23 had created convulsions in the markets due to doubts about London’s ability to assume the public debt generated by the tax cut. The minister announced tax cuts, especially for companies and high incomes, without offering growth forecasts or a roadmap to balance public finances, which caused the punctual fall of the pound and the increase in the debt risk premium public in the financial markets.
In an unusually forceful and critical message, the IMF called tax stimuli “inappropriate” “given the inflationary pressure plaguing the British economy.”
Kwarteng said Monday during his speech at the Conservative Party’s annual convention in Birmingham that he plans to detail “shortly” his initiatives to expand the economy and lower the accumulated debt in relation to gross domestic product. The BBC specified that the presentation will be this month, and not on the date initially scheduled for November 23, despite the fact that until now the Truss government had insisted that it would not advance it.
Greenpeace interrupts the speech
Greenpeace activists have interrupted the prime minister during her speech by getting up from their seats and displaying a banner reading “Who voted for this?”. The activists, Greenpeace UK Public Affairs Director Rebecca Newsom and her Policy Officer Ami McCarthy, were immediately ejected from the room amid boos from the audience.
In a statement sent shortly after, Greenpeace UK says it has identified at least seven areas of environmental protection, climate action, workers’ rights and combating inequality where policies considered by the Truss cabinet contradicted the 2019 Conservative election program.
“Who voted for this? In a healthy democracy, citizens should get the government program they voted for, but Liz Truss is shredding most of it. People voted for strong action on climate, a moratorium on fracking, world-leading environmental protections, and the fight against poverty and inequality. What they are getting instead is fracking, a potential bonfire for wildlife and nature protection regulations and now the prospect of benefit cuts,” Newsom said.
According to a survey published this Wednesday by YouGov, Truss is already more unpopular than his predecessor in the Government, he also tory Boris Johnson, and even former Labor leader Jeremy Corbyn.
The survey reveals that only 14% of citizens now admit to having a “favorable” impression of Truss, compared to 26% surveyed between September 21 and 22. Almost three quarters of the participants in this survey, 73%, today see the British Prime Minister in an “unfavourable” way, and more than half, 55%, perceive her in a “very unfavourable” way.