The British government could not remain deaf to the social uproar.
Entangled in the turmoil created by its "mini-budget", London reversed this Monday morning by reversing a tax cut for the richest which had aroused criticism even within the majority.
"We understand, we listened," Finance Minister Kwasi Kwarteng said, a phrase echoed verbatim on Twitter moments later by Prime Minister Liz Truss.
“It is clear that the abolition of the 45% tax rate” for taxpayers whose income exceeds 150,000 pounds sterling (171,000 euros) per year “has overshadowed our mission to tackle the difficulties in our country.
Therefore, I am announcing that we are not going to prosecute her,” he announced.
Redaction of a very controversial measure
The removal of this slice "had become a distraction", wrote Liz Truss on Twitter, recalling her priority to "build a high-growth economy, which funds leading public services, raises wages and creates opportunity across the world. country ".
We get it and we have listened.
The abolition of the 45pc rate had become a distraction from our mission to get Britain moving.
Our focus now is on building a high growth economy that funds world-class public services, boosts wages, and creates opportunities across the country.
https://t.co/ee4ZFc7Aes
— Liz Truss (@trussliz) October 3, 2022
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The pound reacted little to the announcement of the withdrawal of the measure: it was up slightly by 0.3% to 1.1206 dollars around 9:30 a.m. (French time).
By doing so, the government of Liz Truss, in place for barely a month, is trying to save the package of measures presented on September 23 by redacting its most controversial measure.
"Promoting bad values"
It is on the abolition of this tax rate that many critics in the ranks of the conservatives focused, to the point of raising fears of a rebellion during the vote on the text in Parliament.
Majority heavyweight, ex-Minister Michael Gove ruled on Sunday on the BBC that "having the main tax measure to reduce taxes for the richest is to put forward bad values".
On Monday morning's BBC set, Kwasi Kwarteng said he ruled out quitting and refused to admit a mistake: This tax cut for the wealthy "was a huge distraction" that overshadowed "a solid set of measures “, he hammered.
On the BBC on Sunday, Liz Truss attributed the fatherhood of this measure to her sole finance minister, prompting astonished reactions.
“Throw his chancellor under a bus”
"One of Boris Johnson's flaws was that he could sometimes be too loyal and he understood that," ex-culture minister Nadine Dorries tweeted, unwaveringly loyal to the former prime minister. .
“However, there is a balance to be found and throwing your chancellor under a bus on the first day of the congress is not one,” she observed on Sunday.
On the second day of the Conservatives' Congress in Birmingham on Monday, Kwasi Kwarteng was to defend his "mini-budget" and his massive tax cuts.
Defended by Prime Minister Liz Truss, who nevertheless acknowledged that the government should have “prepared the ground better”, the plan presented on September 23 by Kwasi Kwarteng caused the pound to fall to its historic low.
British government borrowing rates have jumped to their highest since the 2009 crisis, threatening the country's financial stability.
The country on the brink of recession
The Bank of England intervened urgently last week to stabilize rates, which threatened to bankrupt pension funds.
The 30-year government borrowing rates continued on Monday their decline started since this intervention.
Aimed at dealing with the cost of living crisis, this “mini-budget” provides for the freezing of energy bills and massive tax cuts, with the stated aim of stimulating growth.
"We must stay the course," said, according to excerpts from his speech broadcast Sunday evening, the Minister of Finance, showing his confidence that the government's project is "the right one".
Citing exploding energy bills, tax pressure at its highest “for seventy years”, Kwasi Kwarteng believes that a “new approach” was necessary, “based on growth”.
A historically unpopular prime minister
In power for barely a month, Liz Truss has seen the disastrous polls accumulate two years before the next general election: a recent YouGov study gives the Labor opposition 33 points and according to another, one in two Britons ( 51%) want her to quit.
Several hundred people demonstrated in Birmingham on Sunday to the cry of "Tories out", or "say it loud and clear, the Tories are not welcome here".
From the podium, the influential rail unionist Mick Lynch described the current situation as a “class struggle”, calling on the working class to “change the country” and “change society”.
World
United Kingdom: As the congress of her party opens, Liz Truss faces the discontent of the street and her majority
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United Kingdom: Despite the financial turbulence, Liz Truss assumes her "controversial and difficult decisions"
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Liz Truss
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Boris Johnson