In the UK, Liz Truss abandons her controversial tax reform

OLI SCARFF / AFP British Chancellor of the Exchequer Kwasi Kwarteng (L) and British Prime Minister Liz Truss (R) attend the opening day of the annual Conservative Party Conference in Birmingham, central England on 2 October 2022. – The new Prime Minister the UK will have plenty of critics lurking that the Tories bill is Europe’s largest annual political event. (Photo by Oli SCARFF / AFP)

OLI SCARFF / AFP

Chancellor of the Exchequer Kwasi Kwarteng and British Prime Minister Liz Truss on October 2, 2022 (Photo by Oli SCARFF / AFP)

UNITED KINGDOM – London announced on Monday 3 October that it would lift the income tax cut for the rich, unveiled ten days ago and which has sent financial markets into turmoil.

It is clear that the removal of the 45% rate has overshadowed our mission to address our country’s difficulties. Therefore, I announce that we will not pursue it Finance Minister Kwasi Kwarteng tweeted, adding: ” we understand, we listened “.

“This will allow us to focus on implementing the main elements of our growth plan. First, the ceiling on energy prices “, the minister specified. This measure is valued at £ 60 billion for just six months, while it is expected to last two years for families.

Liz Truss, who arrived in Downing Street in early September, and her Chancellor of the Exchequer Kwasi Kwarteng announced on September 23 a massive energy support plan for families, accompanied by large tax cuts.

Particularly controversial was the cut in income tax for the high-end, which would have dropped from 45% to 40%, accused of favoring the richest in the midst of the UK cost of living crisis.

Other tax cuts were also announced, including the abolition of increases in corporate taxes or social security contributions and the suspension of environmental taxes.

The plan as a whole, estimated by economists to be between 100 and 200 billion pounds but whose financing and economic impact have not been fully quantified, had thrown confusion on the financial markets.

The pound plunged to historic lows and the UK government’s lending rates have jumped to their highest levels since the 2009 crisis, threatening the country’s financial stability.

The Bank of England took urgent action last week to stabilize rates, which threatened the bankruptcy of pension funds.

Asked by the BBC about his possible resignation, the Chancellor of the Exchequer firmly rejected the possibility.

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