British Prime Minister Truss postpones a controversial plan to eliminate the countrys highest tax bracket. The Telegraph and Sky News write, based on government sources, that the plans will first be calculated before parliament votes on them.
The decision comes after much criticism of the plan, including a rumor within Truss own party and an unusual rebuke from the IMF. Financial markets also reacted negatively to the stimulus plan presented by Finance Minister Kwarteng on Friday last week: the pound fell sharply and government bond interest rates rose enormously.
The main criticism was that the plan was based on outdated theories about trickle-down economics and, in particular, gave the rich more money. In particular, the decision to remove the 45 percent tax bracket for incomes over £150,000 was controversial.
Former minister and Tory prominent Michael Gove hinted in the British press that he would not vote for the plans because tax cuts would be wrong for the richest “if people suffer”. Party member Grant Shapps predicted that the plan would not make it in the House of Commons.
According to The Telegraph, the Truss government plans to postpone voting on this part of the stimulus package until Minister Kwarteng presents more elaborate plans on November 23. Then it must also be clear what the financial underpinning of the new policy will be. Truss said earlier that there had been no time to calculate the plans because she wanted to give the economy a quick boost.
“Difficult and turbulent”
Meanwhile, Minister Kwarteng insists that delay does not have to mean a delay. He plans to defend his policy at the Tory party congress currently being held in Birmingham, according to released pieces of his speech.
“We have to persevere. I am convinced that our plan is the right one,” says Kwarteng. According to him, his predecessors policy was nothing more than “accompanying a steady decline”.
Meanwhile, in the United Kingdom, the government is growing that the government will finance the billions that the plans cost with far-reaching cuts in public services. When asked by the BBC, Truss refused to deny that. She just said that the winter is going to be “difficult and turbulent.”