LONDON – The new Prime Minister of Britain’s Exchequer Association, Jeremy Hunt, said on Monday that he would reverse virtually all of the government’s tax cuts, wiping out the country’s free-market economy plan. Prime Minister Liz Truss in a desperate attempt to stabilize financial markets and stabilize the government.
Mr Hunt also announced that the government will end major state intervention to cap energy prices next April, replacing it with a still-to-be-determined program that he says will boost energy efficiency. but that could increase uncertainty for households facing growing electricity and gas bills. .
Ms Truss’ Conservative government had planned to release tax and spending details in its financial plan on October 31, but with markets still turning, Mr Hunt rushed to plan. . His announcement constituted one of the most significant reversals in modern British political history.
“The central duty of any government is to do what is necessary for economic stability,” Mr Hunt said in a televised statement. “No government can control the market, but every government can provide certainty about the sustainability of public finances.”
Among the new details, Mr Hunt said the government would hold off on reducing the basic income tax rate, the heart of a tax cut plan that Ms Truss has promised will stimulate UK economic growth. She previously dropped tax cuts for high earners and vowed to continue with her plan to raise corporate taxes.
The pound and British government bonds rose in the run-up to the announcement, suggesting that the news could give Ms Truss a few days of breathing, despite her political viability, after just six weeks in office. , is still deeply suspect.
Mr Hunt’s hastily scheduled announcement comes three days after Ms Truss overthrow his predecessor, Kwasi Kwarteng, and reversed another major tax cut, undercutting her agenda and discrediting her. As Mr Hunt moved to take control of the government’s economic levers, Conservative lawmakers met to find a way to force Ms Truss out of power.
The mechanics of Ms Truss’ removal remains murky, with lawmakers scrambling to find a way to find a consensual replacement for her to avoid another full-blown and divisive leadership contest. But many political analysts say her position seems unlikely, given the chaotic situation over the past three weeks.
Mr Hunt’s statement shows a government was forced to take a 180-degree turn in his economic policy Because of an unforgiving market, Conservative lawmakers rebelled and lost public support.
Where Ms. Truss ruled out any new taxes last summer, her government is now planning to cancel the tax cuts for high- and low-income earners, and impose increase taxes on companies. When just last week the prime minister ruled out cuts to public spending, Mr Hunt made clear the government would look at painful spending cuts across a range of public services.
The government’s aim is to restore Britain’s credibility in the market by explaining how the country plans to fill an estimated budget loss of £72 billion ($81.2 billion). And Mr Hunt’s measures are already partly on the way to doing just that.
