UK’S TRUSS PARTLY REVERSES TAX CUTS; FIRES HER FINANCE CHIEF

Fri 14 October 2022:

The UK finance minister, Kwasi Kwarteng, has been sacked three weeks after his appointment over a controversial tax cuts plan for big corporations, broadcaster Sky news reported on Friday.

The decision was triggered by Kwarteng’s “mini-budget” plan to support the country’s economy, which included a large-scale tax cut for corporations.

According to the plan, the tax on incomes over 150,000 Pounds ($168,000) a year should be cut from 45% to 40%.

The plan’s announcement sent markets into meltdown, with the British pound falling to an all-time low of $1.0384 against the US Dollar, and triggered a barrage of criticism against the government of UK Prime Minister Liz Truss, including from her fellow Conservatives.

Media reported that Truss was expected to officially announce Kwarteng’s resignation later on Friday and present plans to increase corporation tax.

The government said former Health Secretary Jeremy Hunt is taking over as chancellor of the Exchequer, the United Kingdom’s treasury. He is the fourth chancellor this year.

Shortly after sacking the finance minister, Truss held a news conference at Downing Street, and appeared visibly nervous, saying, “We need to act now to reassure the markets of our fiscal discipline.”

She announced she was canceling a proposed corporation tax cut, a central part of the new government’s economic plan that created turmoil in British politics and financial markets and sent the pound plunging late last month.

Truss’ course correction comes as her administration has sustained mounting criticism from opposition politicians and legislators within her own party, as well as international economists and investors who have continued to divest themselves of British assets.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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