Britain’s economy minister, conservative Kwasi Kwarteng, vowed this Monday to continue his controversial economic plan after being modified due to criticism it received inside and outside his party.
Kwarteng admits it was a “tough day”, in which it has scrapped a key part of its fiscal strategy, but maintains that it must now focus “on work” promoting “growth” in the UK, which aspires to rise 2.5 %.
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The minister, who took office on Sept. 6, defended his tax-cutting program especially for companies and high-income earners in order to boost economic expansion, in a speech to the Conservative Party’s annual congress in the British city of Birmingham.
Prior to his speech, Kwarteng announced this morning that cancel the planned deduction, from 45 to 40%, from the highest income tax band, after the criticism it received from its formation deputies, which indicated that they would not vote in favor of the action in Parliament.
a little turbulence
In appearances before other members of the Government and conservative base, the head of Economics argued that the uproar caused by his initiative to lower taxes on the rich had become a “distraction” and “a bit of turbulence”, which should not prevent progress. the rest of the government’s strategy.
In the first row of the auditorium, flanked by her minister, Conservative Prime Minister Liz Truss, who at the opening of the congress on Sunday assured that the decision to remove the 45% band would not be overturned.
The barrage of reproaches it received for promoting this controversial policy at a time of crisis due to rising costs of living led, dramatically, to Kwarteng announcing on Monday that the policy was being scrapped.
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British Finance Minister Kwasi Kwarteng.
The minister, who claims to be “absolutely pro-business”, insisted that he would continue his intention to cancel the scheduled corporate tax increase, from 19% to 25%, and announced that in the coming days he would detail the steps. to accelerate the growth of gross domestic product (GDP) to reach the target of 2.5%.
Among the elements for expanding the economy and increasing productivity would be liberalization of planning and construction regulations, agriculture, financial services, increased childcare provision and reform of social subsidies, he said.
He also pledged to abolish remaining European laws that “prevent the country from progressing”, in one of the most lauded moments of the speech, which barely managed to argue the base.
Kwarteng pledged to act with “fiscal responsibility”, after being criticized for presenting on September 23 a “growth plan” with major tax cuts without accompanying GDP forecasts or a roadmap for net debt reduction.
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Poor election prospects
The negative reaction from financial markets to this plan, which temporarily sank the pound and fueled interest on the sovereign debt, has led many participants in this year’s annual congress to believe that their formation can no longer win the next election, scheduled for 2024.
A survey released this Monday by Comres, conducted among 2,113 adults between September 30 and October 2, placed Keir Starmer’s Workforce at the top of voting intent, with 50% support compared to 25% of those receiving Tories.
Labor Economics spokeswoman Rachel Reeves has stated that, despite the last-minute capitulation, the damage caused by the Government’s economic policies is “done”, as the debt risk premium has risen, with negative effects on public finances, and there is upward pressure. on interest rates and mortgages.
Despite giving up at the last minute, the damage caused by the government’s economic policies has already been done
Kwarteng, which refused to resign because of its chaotic management during its first month in office, has pledged to present a full economic plan, with estimates from the Office of Budget Responsibility (OBR in English, public finance watchdog), in parliamentary intervention. on November 23.
However, his position as Treasury Secretary has weakened, as has Truss, who on Wednesday will try to convince the Conservative base and the nation that he is the right man to lead Britain.
*With information from EFE
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