UK’s Truss says her government mishandled tax cuts announcement
- The new prime minister, in office for less than a month, admitted the government ‘should have laid the ground better’
- She said plan for huge package of unfunded tax cuts, which drove pound to record low, was taken by Chancellor Kwarteng, not cabinet
Britain’s Prime Minister Liz Truss acknowledged her government mishandled the announcement on cutting taxes which triggered a week of turmoil in financial markets, while insisting her approach is the correct one.
She also said the decision to remove the highest rate of income tax was taken by Chancellor of the Exchequer Kwasi Kwarteng and not put to her cabinet.
“I do accept we should have laid the ground better; I’ve learned from that,” Truss told the BBC in Birmingham, where the ruling Conservative Party’s annual conference begins on Sunday. “I think we made the right decision to deal borrow more this winter to deal with the extraordinary circumstances we face.”
Truss’s plan for a massive package of unfunded tax cuts roiled markets, driving the pound to a record low and forcing the Bank of England to intervene to prevent a bond market meltdown.
Amid the fallout, support for the Tories has tanked in opinion polls, with international research firm YouGov putting the opposition Labour Party 33 points ahead. A survey by the Observer newspaper showed three-quarters of UK voters, including 71 per cent of those who backed the Conservatives (Tories) in the last election, believe Truss and Kwarteng have “lost control” of the economy.
Cutting the top rate of income tax for the highest earners is proving especially toxic, given ministers have also indicated that the government’s plans will require department to find cost-savings. That has angered Tory politicians, who fear it plays into the hands of Keir Starmer’s Labour.
“I believe in getting value for money for the taxpayer,” said Truss, who has been in power for less than a month. Asked if she is committed to cutting the top rate of income tax, she replied: “Yes.”
Truss also said she wanted to reassure the public that her plan would benefit them in the long-term and that her energy package would help them pay rising fuel bills this winter.
Additional reporting by Reuters
