The U.K. government dropped plans to scrap the highest rate of income tax for high-earners on Monday in an embarrassing U-turn after the policy drew international condemnation.
The annual Conservative Party conference will take place in the year 2022.
The government backpedaled on plans to cut the top 45% rate of income tax for people earning more than £150,000 a year.
The proposal, one of several unpopular fiscal policies that sparked widespread public outrage and accusations of unfairness, had become a distraction from the government's mission to promote growth.
The pound jumped against the dollar after the news of the government's reversal, briefly bouncing back to levels before Kwarteng's policies were announced and reaching a one-week high.
After less than a month in office, the reversal is a humiliation for the government. The tax cut, which would have benefited the country's wealthiest 1%, was one of a bunch of financial policies announced by Kwarteng in late September that included other tax cuts, removing caps on bankers' bonuses, and plans to control soaring energy costs, all of which would have been The announcement came as a shock to many, including members of Truss' cabinet, and no mention of it was made during her long campaign for party leadership or when she was elected to Parliament under Boris Johnson. The policies caused the pound to sink to a record low against the dollar. The Bank of England acted to calm the markets after the International Monetary Fund criticized the government's policy.
Senior members of previous governments that served with Truss rebelled against the government's policies. If the matter was put to a vote in the Commons, the new government would lose in a vote. The policy, along with scandals from the previous government, has damaged the Conservative's standing among the public and polls show Labour on track for an enormous victory at the next general election.
The finance chief and Kwarteng both made the decision to walk it back together, according to Kwarteng. Kwarteng said that he would take responsibility for the policy and that they had listened.
The government insists that its fiscal policies will spur growth. The mini-budget was called a fiscal event and did not include economic forecasts. There could be more policies announced at the conference.
The U.K. has a new prime minister. Here is everything you need to know about Boris Johnson's successor.
The Bank of England tried to calm the market.
All Rights Reserved © 2024
