Liz Truss’ plan to bail out the British economy has been called a ‘disaster’

The UK government was forced to cancel tax cuts for the rich due to general discontent

For fans of looking for bad omens, the new British Prime Minister Liz Truss is a great find. No sooner had she led the government than Queen Elizabeth II died. And now the Truss-led cabinet has come under fire, not only from the opposition, but also from fellow Tory party members. A vote of no confidence was in the air. So the “iron lady 2.0” with her associates has to dodge in order to survive and stay on top of the political Olympus.

Liz Truss has found herself at the head of government at a time when the country is increasingly mired in a cost-of-living crisis. The new prime minister, positioning herself as “Margaret Thatcher of the 21st century,” promises her compatriots to save the national economy. But, apparently, Truss and her team do not have a clear plan.

Earlier, Chancellor of the Exchequer (aka Finance Minister) Kwazi Kwarteng presented in Parliament a “support plan” for the British economy, involving a massive tax cut. Kwarteng announced the cancellation of a planned increase in corporate income tax to 25% from the previous 19%, as well as a tax cut from 45% to 40% on incomes over 150 thousand pounds a year, which could cost the government about 2 billion pounds a year.

But on Monday morning there was a sharp reversal: Kwazi Kwarteng reported that the government had abandoned tax cuts for the rich. The reason for this was the discontent of the population.

“Our plan to support the economy,” wrote Kwarteng on his social media account, “sets a new approach to creating a more prosperous economy, from supporting British businesses to reducing the tax burden for the lowest paid.”

“However,” continued the head of the UK Treasury, “it is clear that the abolition of the 45% tax rate has become a distraction from our main mission to solve the problems that our country faces. Thus, I inform you that we will not eliminate the 45% tax rate.”

Kvarteng acknowledged that the Cabinet listened to public sentiment. Indeed, the Liz Truss government’s plan to pull the economy out of the crisis has faced a barrage of criticism, although the prime minister and her finance minister insist that their plan will generate economic growth and ultimately generate more tax revenue. But they also made it clear that government spending would need to be cut.

The announced measures proved unpopular even among conservatives. Tax cuts for the highest earners and capping off bank bonuses as millions of Britons grapple with a cost-of-living crisis fueled by skyrocketing energy bills looks like something downright politically toxic. And not only politically.

Income tax cuts for Britain’s highest earners are part of a package of unwarranted cuts that have sent financial markets into turmoil and sent the pound sterling to a record low against the dollar. The Bank of England was forced to intervene to prop up the bond market, but fears that the bank would soon raise interest rates caused mortgage lenders to withdraw their cheapest deals, causing dismay among homebuyers.

It got to the point that in the British Parliament they started talking about steps to organize a vote of no confidence in the Prime Minister. So it’s no surprise that the surprise U-turn with no tax cuts for the wealthy was carried out by Liz Truss and Quasi Quarteng to prevent what the Daily Mail calls a “massive Tory uprising” led by ex-Johnson housing minister Michael Gove and former Transportation Secretary Grant Shapps. After all, it became obvious that dozens of deputies would refuse to support this step in the House of Commons.

Even if the conservatives are dissatisfied with the actions of the government, then what can we say about the opposition. They are not shy about expressions at all. “The Tory budget has been a disaster,” says Alison Thewlis, spokesman for the Scottish National Party. “It is inevitable that this morally repugnant and extremely costly policy will have to be reversed after it has done so much damage to mortgages, pensions and the UK economy. People in Scotland will not forget that Liz Truss and Kwasi Kwarteng wanted to rob the poor to pay the rich – and this reversal will not detract from the fact that they are still planning to impose a new wave of destructive Tory austerity measures that will hurt the poorest and threaten our National Health Service.

There was talk in the press, citing Conservative Party sources, that Truss could step down as prime minister by Christmas if he didn’t back down in front of angry parliamentarians. But, given the will of Liz Truss to power, it can be assumed that she will cling to the premiership to the end. And if necessary, he will make a scapegoat out of Quasi Kwarteng in order to get dry out of the water herself. It is no coincidence that political scientists started talking about the fact that due to sharp reversals on the issue of taxes for the rich, the chancellor’s credibility was undermined. So the self-proclaimed “Iron Lady” may well sacrifice it for the sake of its own political survival.