UK PM Truss Battles To Stay In Power After Tax Reforms

Posted by Samson Kankan Europe, Latest Headlines Tuesday, October 18th, 2022

(AFRICAN EXAMINER) – British Prime Minister Liz Truss on Tuesday battled to stabilise her position after an economic crash forced her into humiliating U-turns on tax reforms, putting her future as leader in doubt.

Truss on Tuesday was to meet her cabinet and attempt to rally support among Conservative MPs, some of whom have publicly said she has no future as prime minister.

She was set to face parliament on Wednesday for a session of Prime Minister’s Questions.

The right-wing Sun tabloid on Tuesday called Truss “The Ghost PM”, while left-wing tabloid The Mirror called the situation a “catastrophic humiliation”.

The embattled prime minister on Monday apologised in a BBC interview for going “too far and too fast” with reforms, a month after taking office.

This came after her new finance minister Jeremy Hunt in a brief televised statement on Monday axed almost all the debt-fuelled tax cuts announced last month in a budget by his sacked predecessor, Kwasi Kwarteng.

Hunt told parliament that he and Truss “agreed yesterday to reverse almost all the tax measures announced in the growth plan three weeks ago”, flanked by a grim-faced Truss.

The announcement came as Truss’s governing Conservative party tanked in the opinion polls amid the reversals and Britain’s worsening cost-of-living crisis.

Truss had already staged two embarrassing budget U-turns, scrapping tax cuts for the richest earners and on company profits.

Hunt’s strategy reversals included reducing Truss’s announced £2,500 cap on energy bills for all British people from two years to six months, after which he promised a new approach.

Hunt estimated the tax changes would raise about £32 billion ($36 billion) per year, after economists estimated the government faced a £60-billion black hole. He also warned of tough spending cuts.

Hunt’s actions on Monday sent the British pound soaring against the dollar and euro, while bond yields dipped.