UK drops income tax cut for the richest – Europe – International

On Monday, Conservative British Economy Minister Kwasi Quarting promised to continue his work A controversial economic plan after it was modified due to the criticism he received inside and outside his party.

Kwarteng admitted it had been a “difficult day” as he scrapped a key part of his financial strategy, but emphasized that now he must focus “on the work” of promoting “growth”. United kingdomWhich he aspires to increase to 2.5%.

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The minister, who took office on September 6, defended his program of tax cuts especially for businesses and high-income people in order to boost economic expansion, in his address to the annual Conservative Party conference in the English city of Birmingham.

Before his speech, Kwarteng announced this morning that canceled the planned reduction, from 45 to 40%, to the highest income tax range, After the criticism leveled by the deputies to his formation, who indicated that they would not vote in favor of the measure in Parliament.

a little turbulence

Appearing before other members of the government and the conservative base, the head of the economics department said that the uproar his initiative to cut taxes on the wealthy was a “distraction” and a “slight disturbance”, which should not preclude the future from the rest of the government’s strategy.

In the first row of the hall was surrounded by her ministers, the conservative prime minister, Liz Truss, That when the conference opened on Sunday, he confirmed that the decision to eliminate the 45% squad would not be reversed.

The barrage of blame received for promoting this controversial policy at a time of crisis due to the rising cost of living led, in a dramatic turn, to Kwarteng’s announcement on Monday that it was scrapping.

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The minister, who admitted that he was “totally pro-business”, insisted that he would go ahead with his intention to scrap the planned increase in corporate tax, from 19% to 25%, and announced that in the coming days he would separate the measures. To speed up GDP growth (Gross domestic product)up to the 2.5% target.

Among these, he said, to expand the economy and improve productivity are liberalizing planning and building regulations, agriculture, financial services, improving childcare provision, and reforming social benefits.

He also promised to repeal any remaining European legislation “preventing the country from progressing,” in one of the speech’s most welcome moments, which barely succeeded in calling into question the rules.

Kwarteng promised to work with “Fiscal Responsibility”, after he came under attack for presenting on September 23 a “growth plan” with deep tax cuts without accompanying GDP forecasts or a roadmap for net debt reduction.

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Bad electoral odds

The negative reaction of financial markets to this plan, which temporarily flooded the pound and sparked interest in sovereign debt, led many participants in this year’s annual conference to believe that their formation could no longer win the next day. Elections scheduled for 2024.

A ComRes poll published this Monday, which was conducted of 2,113 adults between September 30 and October 2, showed Labour’s Keir Starmer party on top intent to vote, with 50% support versus 25% for the Conservatives.

Labor economics spokeswoman Rachel Reeves declared that despite the last-minute capitulation, the damage from the government’s economic policy “has already been done”, because the debt risk premium has already risen, which has had a negative impact on public finances, and there is upward pressure. On interest rates and mortgages.

Kwarteng, who refused to resign due to his chaotic management during his first month in office, promised to present a complete economic plan, with forecasts from the Office of Budget Responsibility (OBR in English, Public Finance Supervisor), in a parliamentary intervention on November 23.

However, his position as Chancellor of the Exchequer has been weakened, as has Truss, who on Wednesday will try to convince the Conservative base and the nation that he is the right person to lead the UK.

* With information from EFE

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