Amid the turmoil, the government is returning to tax cuts for the richest

The British government could not remain deaf to social turmoil. Entangled in the turmoil created by its “mini-budget”, London backtracked on Monday morning by canceling a tax cut for the very rich that had sparked criticism even among the majority.

“We understand, we have listened,” said Finance Minister Kwasi Kwarteng, a sentence taken literally on Twitter moments later by Prime Minister Liz Truss. “It is clear that the abolition of the 45% rate” for taxpayers whose income exceeds £ 150,000 (€ 171,000) per year “has overshadowed our mission to address our country’s difficulties. Therefore, I am announcing that we will not pursue it, “she announced.

Drafting of a very controversial provision

Removing this slice “had become a distraction,” wrote Liz Truss on Twitter, recalling her priority of “building a fast-growing economy that funds major public services, raises wages and creates opportunities around the world. . Village”.

The pound reacted little to the announcement of the withdrawal of the measure: it rose slightly by 0.3% to $ 1.1206 around 9:30 am (French time). In doing so, the government of Liz Truss, in office for just a month, is trying to save the package of measures presented on September 23 by drafting the most controversial provision of her.

“Promote bad values”

It is on the abolition of this rate that many critics in the ranks of the conservatives have focused, to the point of raising fears of rebellion during the vote on the text in Parliament. The majority of heavyweights, former minister Michael Gove on Sunday ruled on the BBC that “to have the main fiscal measure to reduce taxes for the richest is to propose bad values.”

On the BBC set on Monday morning, Kwasi Kwarteng said he ruled out the resignation and refused to admit a mistake: this tax cut for the rich “was a huge distraction” that overshadowed “a solid series. of measures “, he hammered. On Sunday on the BBC, Liz Truss attributed the paternity of this measure to her sole finance minister, prompting stunned reactions.

“Throw your chancellor under a bus”

“One of Boris Johnson’s flaws was that he could be too loyal at times and he got it,” tweeted former culture minister Nadine Dorries, unshakably loyal to the former prime minister. “However, there is a balance to find and throwing your chancellor under a bus on the first day of the congress is not,” she noted on Sunday.

On Monday, the second day of the Conservative Congress in Birmingham, Kwasi Kwarteng had to defend his “mini-budget” and his massive tax cuts. Defended by Prime Minister Liz Truss, who nevertheless acknowledged that the government should have “better prepared the ground”, the plan presented on 23 September by Kwasi Kwarteng brought the pound to an all-time low. UK government lending rates have jumped to their highest levels since the 2009 crisis, threatening the country’s financial stability.

The country on the verge of recession

The Bank of England took urgent action last week to stabilize rates, which threatened the bankruptcy of pension funds. The 30-year government borrowing rates continued their decline initiated by this intervention on Monday. Intended to tackle the cost of living crisis, this “mini-budget” provides for the freezing of the energy bill and massive tax cuts, with the stated aim of stimulating growth.

“We must stay on course”, said the finance minister, according to excerpts from his speech broadcast on Sunday evening, demonstrating his confidence that the government’s project is “the right one”. Citing the explosion of energy bills, the tax burden at its highest “for seventy years”, Kwasi Kwarteng believes that a “new approach”, “based on growth”, was needed.

A historically unpopular prime minister

In power for just a month, Liz Truss saw disastrous polls pile up two years before the next general election: a recent YouGov study gives the Labor opposition 33 points and according to another, one in two Britons (51%) would like it to resign.

Several hundred people demonstrated in Birmingham on Sunday shouting “Tories out”, or “say it out loud, Tories are not welcome here”. From the podium, influential rail trade unionist Mick Lynch described the current situation as a “class struggle”, calling on the working class to “change the country” and “change society”.

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