After protests over the “mini-budget”

Britain backtracks on tax cuts for the wealthy

The decision marks the first reversal of critical policy under Prime Minister Lise Terrace.

Reuters

The British government, engulfed in a storm of protests caused by its "mini-budget" yesterday morning, has reversed its decision to cut taxes on the wealthy, which sparked criticism even among the ruling majority.

The decision came after a demonstration, the day before yesterday, in Birmingham, where the Conservative Party conference was held, to protest against the government's policy.

Banners attacked the party, reading "Conservatives are not welcome here," while others chanted, "Tax the rich, not the poor."

From the podium, influential rail unionist Mike Lynch described the current situation as a "class struggle", calling on the working class to "change the country" and "change society."

The decision marks the first reversal of a critical policy under Prime Minister Lise Terrace, who took office less than a month ago.

Terrace and its finance minister, Kwasi Quarting, announced a new "growth plan" on September 23 that would cut taxes and amend related laws through massive government borrowing to get the economy out of its stumble over years.

But the plan sparked a crisis of investor confidence in the government, undermining the value of the pound and government bond prices and shaking global markets, to the point that the Bank of England had to intervene with a 65 billion pound ($73 billion) program to prop up the markets.

Although the cost of scrapping the top tax rate was only about £2 billion out of the £45 billion tax cut plan, it was the most eye-catching component of the financial package that was to be funded by government borrowing, with Quarting not explaining how. Pay off that financing over the long term.

Just hours after Terrace appeared on BBC television in defense of the policy, Quarting issued a statement saying he accepted the plan was a distraction from broader efforts to help families through a difficult winter.

"As a result, I announce that we will not move forward with the abolition of the tax rate," he added in the statement.

The abandonment of the plan is likely to put Terrass and Quarting under enormous pressure less than four weeks into their tenure.

Four prime ministers have taken power in Britain in the past six years of political turmoil.

Kwarting said he was not considering resigning.

Trass, who took office on Sept. 6, said the day before yesterday she should have done more to "pave the way" for the policy.

A number of Conservative MPs have publicly opposed the policy, saying cutting government spending and raising borrowing to fund tax cuts for the richest is fraught with political risk in a cost-of-living crisis.

A Conservative MP, who asked not to be named, said a reversal of the decision was inevitable.

The British pound rose yesterday, touching $ 1,128, after media reports indicated that the plan was reversed, the highest rate for the currency since September 22, the day before Quarting announced a new “growth plan” that cut taxes and restrictions funded by extensive government borrowing, which sowed unrest. in the markets.

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