Prime Minister Liz Truss is trying to rally lawmakers around her tax cut policies after political strife and market turmoil.
Jacob King | Photos | Getty Pictures
LONDON — British Prime Minister Liz Truss insisted on Wednesday that lowering taxes was the “morally and economically right thing to do”, doubling down on a series of debt-financed economic reforms that fueled intra-party feuds and market turmoil.
Speaking at the Conservative Party Conference, Truss said he was determined to “level our country Conservatively” to unite lawmakers around tax cut plans and strengthen his waning authority.
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“Reducing taxes is the right thing to do, morally and economically,” Truss said, adding that the Conservative Party “will always be the party of lower taxes.”
In his first conference speech as Conservative Party leader, he said: “Reducing taxes helps confront the global economic crisis and puts a signal that the UK is open to trade.”
“For too long our economy has not grown as strongly as it should,” he continued. “We must level our country in a Conservative way.”
“We will tightly control the country’s finances,” he said to his political idol, Margaret Thatcher, otherwise known as the Iron Lady, with an open nod. “I have three priorities for our economy: growth, growth and growth.”
Intra-party conflicts and declining support
The four-day conference, held in Birmingham, England, was beset by intra-cabinet skirmishes and hostility as longtime Tory MPs spoke out against the “growth-oriented” economic policies of the newly formed Truss.
The most recent rebellion focused on Truss’ resistance to increasing welfare benefits in line with inflation currently hovering around 9.9% in the UK, breaking a promise made by his predecessor, Boris Johnson.
In its place, reportedly plans to increase support in line with average earnings growthwhich is about 5.5%, including bonuses, according to the latest figures.
Truss said the proposals would save billions of pounds for the government “while helping more people work”. But other party members, including right-wing supporters, have warned the Prime Minister not to cut the incomes of Britain’s poorest as the country faces the worst cost of living crisis in a generation.
Protesters took to the streets of the UK to show their anger at the new Conservative government headed by Prime Minister Liz Truss.
Mike Kemp | in pictures | Getty Pictures
Penny Mordaunt, the leader of the House of Commons who opposed Truss in this summer’s Tory leadership contest, said on Tuesday she supported the benefits “by keeping up with inflation”, joining a chorus of lawmakers warning that the cuts could spur a party revolt. .
Indeed, some Conservatives have warned that the prime minister – less than a month into his inauguration – is now fighting for survival amid falling poll scores.
Former transportation secretary Grant Shapps said on Tuesday that the Conservatives are possible. If Truss “does it badly” he can change the leader again.
Britain’s opposition Labor Party had a 33-point lead over the Conservative Party on Thursday, days before the Conservative Party Conference. According to a YouGov survey.
Still, Truss stuck to his policies on Wednesday and said, “Not everyone will be for change, but everyone will benefit from the result.”
The Prime Minister’s speech was interrupted by shouts of environmental protesters, who were accompanied by the audience after Truss demanded “Let’s remove them”.
Following a series of protests in Birmingham last weekThe people took to the streets to show their anger against the government.
Reaction to tax cuts
The Truss government is grappling with controversy over the announcement last month of a series of debt-financed tax cuts (estimated at a total of £43bn ($49bn)) that critics say have disproportionately benefited the rich and businesses.
The prime minister argued that the cuts would stimulate growth at the top of the economy, with knock-on effects across society.
Amid the backlash, the government said Monday Had to abandon plan to remove top income tax rate of 45%in a bid to stifle financial markets after the bids caused chaos on UK assets.
British Prime Minister Liz Truss admitted she needed to better prepare the ground for the latest “growth-oriented” tax cuts that have shaken financial markets.
Oli Scarf | AP | Getty Pictures
Announcement of the decision in a tweetFinance Minister Kwasi Kwarteng said, “We understood and listened”, adding that the plans had become “distracting” after growing backlash from both sides of the political corridor.
Tax cuts — one of several Supply-side reforms introduced in September 23 “mini-budget” – causing turmoil in financial markets, causing the British pound to fall sharply Record low at $1,0382 and UK 10-year government bond yields will rise as much as 4.6%.
As a result, the Bank of England had to step in with a £65bn bond purchase scheme to support UK pension funds.
The pound has since recovered marginally and was traded at $1,1371 at 11:50 a.m. local time shortly after the prime minister’s speech.
