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British Prime Minister Truss has delayed a controversial plan to abolish the country’s top tax bracket. The Telegraph and Sky News write that, based on government sources, the plans will be calculated first before Parliament votes on them.
The decision follows much criticism of the plan, including grumbling within Truss’ party and an unusual reprimand from the International Monetary Fund. Financial markets also reacted negatively to the stimulus plan presented by Finance Minister Kwarteng last Friday: the British pound fell sharply and government bond yields rose significantly.
The criticism was essentially that the plan was based on outdated theories about a tiered economy and that it gave the wealthy more money in particular. The decision to scrap the 45 per cent tax bracket for incomes over £150,000 was particularly controversial.
Former senior Tory minister Michael Gove has hinted in the British press that he will not vote for the plans, saying tax cuts would be wrong for the rich “if people are suffering”. Party colleague Grant Shapps predicted that the plan would fail in the House of Commons.
According to The Telegraph, the Truss administration is planning to postpone the vote on this part of the stimulus package until Minister Kwarteng presents more detailed plans on November 23. Then it should also be clear what will be the financial basis for the new policy. Truss said earlier there was no time to calculate the plans because she wanted to give a quick boost to the economy.
difficult and reckless
Meanwhile, Minister Carting emphasized that the postponement does not necessarily mean its amendment. He plans to defend his policies at the Conservative Party conference currently taking place in Birmingham, according to declassified clips of his speech.
“We have to persevere,” says Kwarteng. “I’m convinced our plan is the right one.” His predecessor’s policy, he said, was nothing more than “directing steady decline”.
Meanwhile, in the UK, expectations are growing that the government will fund the billions that plans will cost with far-reaching cuts to public services. When asked by the BBC, Truss refused to deny it. She only said that winter would be “hard and harsh”.
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