Great Britain. The government withdraws from the controversial tax decision

On Monday morning, Finance Minister Kwasi Kwarting unexpectedly issued a statement on Twitter, writing:

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This was confirmed by Prime Minister Liz Truss shortly after, also using the phrase “a distraction.”

Abolishing the 45% tax rate for people earning more than £150,000 a year was one of the elements of the biggest package of tax cuts in decades announced by Kwarteng on 23 September, which – the minister and head of government argued – are needed to stimulate Britain’s economy.

However, this package was poorly received by the public at the time The cost of living was on the rise, and the main beneficiaries were those with high incomes. Financial markets also reacted nervously, as the cuts will be financed by the country’s increased indebtedness. Her reaction was skeptical, seeing support for the party dropping so dramatically in opinion polls, that some Conservative MPs even suggested they could vote against it.

Most elements of the plan come into effect from the new financial year, i.e. from the beginning of April 2023, provided they are approved by the House of Commons earlier. On Sunday night, former Transportation Secretary Grant Shapps, who usually has a very good understanding of the mood in the Conservative MPs club, said there was no chance of the plan winning a majority.

The shift brought about by the government raises serious questions about Courting’s future as finance minister. The day before, Truss said in an interview that the cancellation rate was 45 percent. It was his idea, it seemed to cast all the misery of social resentment upon the minister.

When asked by the BBC on Monday morning about his future, Kwarting said he was not considering quitting at all. He pointed out that in the 12 years since he was a deputy, there have been many cases of the government, listening to people’s reactions, and withdrawing from politics.

The new British Prime Minister, Liz Truss, said last Thursday (September 29) that the country is facing very difficult times for the economy. The British prime minister also defended the massive tax cut package. The pound fell against the dollar last week to its lowest level in nearly 40 years.