The British Conservative government on Monday revoked almost all of its fiscal plan presented on September 23 in order to regain the confidence of the markets, although the change of course leaves the leadership of the prime minister weakened, Liz Truss.
Liz Truss apologized on Monday for the “mistakes” she has made at the beginning of her term and assured that she will be the conservative candidate in the next general election.
“I want to accept responsibility and apologize for the mistakes I have made,” the prime minister said in an interview with the BBC with which he is trying to fight to stay in office, despite mounting pressure to resign.
Truss pointed out that with the massive tax cuts he promised when he took office he intended to help people pay their energy bills, but that he went “too far and too fast”, so he replaced his finance minister with Jeremy Hunt, “with a new strategy to restore economic stability.”
Truss, who is facing calls to resign inside and outside her party, accompanied her new finance minister, Jeremy Hunt, in the House of Commons, seated with a face of circumstance, who annulled most of the tax cuts with which his boss wanted to encourage growth.
Hunt, who last Friday replaced Kwasi Kwarteng, dismissed after the fiasco of the initial economic strategy, acknowledged that he has had to make “difficult” decisions and indicated that public spending cuts are coming in order to reduce net debt in the medium term accumulated.
In order to calm the markets at its opening this Monday, the chancellor of the Exchequer announced in the morning the changes he plans, which include the formation of an economic council that will advise the Government.
Drastic change
Hunt canceled the planned reduction from 20 to 19% from April of the basic income tax band, after the 45 to 40% contemplated for the high band was already eliminated at the beginning of October.
The aid to limit the price of the energy bill for homes introduced this month and which was to last two years will also be restricted at the beginning of the new fiscal year in April, he said.
Hunt warned that the planned cut of 1.25 percentage points of the tax on dividends will also be canceled as well as VAT-exempt purchases for foreign visitors, as part of changes that have, he said, a value of 32,000 million pounds (37,000 million euros) per year.
Communicating Kwarteng’s departure on Friday, Truss has already reversed his decision to freeze corporate tax, which will now rise from 19% to 25% in April, except for small businesses, as the previous government had ordered.
Of his predecessor’s plan, Hunt maintains only the freezing of social security contributions and the reduction of the tax on the purchase of housing, because the corresponding legislation had already been approved.
The new “chancellor of the Exchequer” will present his complete economic plan on October 31, accompanied by official forecasts of growth and deficit, with which he hopes to restore the confidence of the markets in this Government. (YO)
Source: Eluniverso
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