In an effort to regain her lost authority and reassure financial markets alarmed by her government’s erratic economic claims, British Prime Minister Liz Truss has stressed that she is in charge of “a listening administration” that learns from its mistakes.
In an interview with the BBC that was aired yesterday, Truss stated that she and her ministers were adamant about “reflecting on how we could have done things better.”
Is everything that the administration has done flawlessly? It’s not, she insisted.
“I am perfectly aware of that. Additionally, we have taken note of the input we have received.
This “feedback” has been dramatic, with the opposition Labour Party surging to record highs in polls against Truss’ Conservatives during her first four weeks in office, the pound hitting record lows versus the dollar, the Bank of England taking emergency measures, and all of these events.
Now that some members have said they will oppose any move to reduce welfare payments in order to help pay for lower taxes, Truss is also facing a fight with her party over her economic policies.
In an effort to overcome years of subpar growth, Truss is on a mission to transform the British economy through tax cuts and deregulation. She is attempting to survive a string of U-turns on her first significant programme, a stimulus plan that comprises 45 billion pounds (NZ$89).
3 billion) in tax savings that will be financed by borrowing from the government.
When it was announced on September 23 (local time), the pound fell to a record low versus the dollar, raising the cost of borrowing money for the government.
To support the bond market and avert a larger economic disaster, the Bank of England was compelled to step in. Mortgage lenders withdrew their best offers due to worries that the bank will raise interest rates shortly, which caused havoc for homebuyers.
The government eliminated the most unpopular component of its budget package yesterday, a tax cut on income over 150,000 pounds (NZ$298,000) annually, due to political and financial pressure.
In addition, Treasury Secretary Kwasi Kwarteng has vowed to release a fully costed fiscal plan along with an independent Office for Budget Responsibility economic prediction.
That was initially scheduled to happen on November 23, but due to increasing pressure, it will probably happen much sooner.
The “hullabaloo” about the government’s intentions, which Kwarteng described on Tuesday, has cast a shadow over the Conservative Party’s annual convention in Birmingham, central England, where many delegates express concerns that the party, in power since 2010, is destined for defeat in the next election.
Despite having a sizable majority in Parliament, the party is fractious following three years of scandal under the previous prime minister, Boris Johnson, and a contentious leadership election between Truss and the former head of the Treasury, Rishi Sunak.
During his unsuccessful campaign, Sunak forewarned that Truss’ proposal to pay tax cuts through borrowing would jeopardise both the government’s standing in the marketplace and the financial stability of the country.
According to Truss, her measures will result in economic expansion, higher wages, and eventually more tax income to be used by the government. However, detractors claim that the measures do little to aid the millions of people who are presently experiencing a cost-of-living crisis brought on by skyrocketing energy prices.
A cap on energy costs that went into effect on October 1 was mentioned by Truss as evidence that she was “extremely dedicated to aiding the most vulnerable” (local time).
She did not, however, make the long-standing promise that benefits and state pensions would rise in tandem with inflation.
We will need to decide how to reduce debt as a percentage of GDP in the medium term, according to Truss. We must exercise fiscal responsibility.
Truss received warnings from conservative MPs, including government ministers, that they would reject a reduction in social benefits in real terms.
“I have always advocated keeping up with inflation, whether it be for pensions, our welfare system, or both. It makes sense to do so, according to House of Commons leader Penny Mordaunt.
Mordaunt told Times Radio, “That’s what I voted for before, and so did a lot of my colleagues.”
As she reels from policy U-turns, UK’s Truss promises to listen.
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