Went too far, too fast: Truss backtracks on tax reforms
After a series of sudden tax reforms worsened the economic turmoil, United Kingdom Prime Minister Liz Truss on Monday apologized for going "too far, too fast" with the same. This came after a decline in investor confidence, following which the newly-appointed Finance Minister Jeremy Hunt scrapped Truss's plans for reforms. She dismissed allegations of being a puppet figure and said she was "sticking around."
Why does this story matter?
- Truss assumed leadership last month as the country was facing high energy prices and double-digit inflation.
- She proposed several tax cuts and an energy support scheme to avoid market turmoil over the last three weeks. However, she has had to backtrack on two budget plans—scrapping tax cuts for top earners and on company profits.
- She is even facing demands to quit as the PM.
Course correction was neccessary: Truss
Truss has admitted that her monthlong leadership hadn't been perfect, but she claimed to have "fixed the errors." She said she would remain the prime minister as she was elected to deliver for the country. Defending her position, she asserted that not changing the course would have been "irresponsible." Truss said she was determined to follow the original vision but with a changed strategy.
Is Hunt de facto PM?
With Hunt taking over the situation and rolling back the tax cuts proposed by Truss, questions piled up before her, doubting who was really in charge. Many parliamentarians, including Conservative MP Roger Gale, have been speculating that Hunt is the "de facto PM." The British media has cornered Truss over her handling of the economy as some of her MPs are seeking her resignation.
Hunt replaced Kwasi Kwarteng
Hunt also announced the formation of an economic advisory council which will include four external experts. Earlier, Truss had proposed debt-fueled tax cuts, including shareholder dividend tax reduction, tax-free shopping for tourists, and freezing alcohol duty, which were also scrapped. To note, Hunt was appointed last week after sacking Kwasi Kwarteng. However, it is speculated that Truss's position is left vulnerable in this situation.
