Why the British government cancels the tax cut for the rich: ‘Distraction from our mission’

There is a grand plan worth 45 billion pounds, more than 50 billion euros, that is not putting the British government of new premier Liz Truss to sleep peacefully. And the tax reduction program for the richfirst announced and defended with a sword and then abruptly abandoned and canceled by the British Chancellor of the Exchequer, Kwasi Kwarteng

The plan prepared by the minister and approved by Liz Truss provided for abolish the maximum rate of 45% of income tax to lower it to 40%, but it generated controversy and heated protests even within the majority party itself, also in light of the reaction of the collapsed markets.

Controversies that threatened to break the Conservatives and sent the government into a direct turnaround within hours. Announcing the decision to backtrack in a Monday morning tweet, Kwasi Kwarteng said, “We understand and listen.”

Kwarteng, however, made no mea culpa, not even in his expected speech at the Conservative congress. The chancellor limited himself to explaining that he had given up on the idea and plan of cut taxes for people with income over £150,000 simply for internal party issues, without responding to the more detailed criticisms that highlighted the lack of economic coverage for such a maneuver.

Kwarteng denied it was a mistake, despite the impact on the pound and the cost of government debt, which in turn made mortgages more expensive. Kwarteng limited himself to recalling the scope of the government’s economic plan, explaining that the clash that would open over tax cuts for the rich would be “a distraction from our priority mission to face the challenges that our country has to face”.

“From supporting UK businesses to lowering the tax burden for lower wages, our growth plan sets out a new approach to building a more prosperous economy,” Kwarteng wrote in a statement, adding: “We understand and listen. This will allow us to focus on delivering key parts of our growth package.”

Prime Minister Truss, meanwhile, retweeted the finance minister’s statement, adding: “Our goal now is to build a high-growth economy that finances world-class public services, raises wages and creates opportunity across the country.” .