UK Prime Minister Liz Truss promised on Wednesday to reduce the size of the country's public debt amid a flurry of criticism over the government's new plan to support the economy, which includes large-scale tax cuts
MOSCOW (Pakistan Point News / Sputnik - 05th October, 2022) UK Prime Minister Liz Truss promised on Wednesday to reduce the size of the country's public debt amid a flurry of criticism over the government's new plan to support the economy, which includes large-scale tax cuts.
"We must always be careful with taxpayers' money. It's why this government will always be fiscally responsible. We are in an extraordinary times... I am clear, we cannot pave the way to sustainable economic growth without fiscal responsibility. So, we will bring down (public) debt as a proportion of our national income," Truss said at the Conservative Party conference.
On September 23, UK Chancellor of the Exchequer Kwasi Kwarteng presented a plan to support the country's economy that presupposes major tax cuts. Kwarteng said that the government would cancel a planned increase in corporate income tax to 25% from 19% and cut the tax on incomes over 150,000 Pounds ($170,000) a year from 45% to 40%.
The announcement sent markets into meltdown, with the British pound falling to an all-time low of $1.0384 against the US Dollar and the yield on the UK's five-year government bonds rising to its highest since 2008, at 4.6%. It also triggered a barrage of criticism against the Truss government, including from her fellow Conservatives.
On Monday morning, Kwarteng announced the scrapping of the tax cut, despite earlier statements from Truss about her government's commitment to the original plan. Same day, British media reported that UK lawmakers were taking steps to trigger a vote of no confidence in Truss.