British media: Liz Truss reviews her tax plans – Sterling strengthens

THE British Prime Minister Liz Truss reviews them her plans to cut taxes which have caused a major upheaval in the markets, in a possible sea change in business taxation, as reported today British mediaalthough her office said earlier that there would be no further changes.

The British prime minister’s economic plan, announced last month, sent shockwaves through the government bond market, with some investors and Tory MPs calling on her to reverse the £43bn plan of unfunded tax cuts, including the move to keep the corporate tax rate at just 19%.

Sky News reported that the British government is considering which parts of the tax cuts package might be scrapped. The Sun newspaper reported that the Trust is considering raising the corporate tax rate next year. “No final decision has been made, but there is certainly movement,” the paper’s political editor Harry Cole said in a tweet. The financial package of Tras included the cancellation of the planned increase in the corporate tax rate from 19% to 25% next year. Following the reports, sterling jumped 1.5% against the dollar to 1.1267.

Earlier, her spokesman had stated that the British prime minister is not planning any further changes to her economic plans. Asked if the Trust was sticking to its pledge not to make any further changes to last month’s mini-budget, its spokesman said: “Yes…the position has not changed.”

Truss came under increasing pressure today from MPs in her own party to review plans to cut taxes, with one ally arguing it would be a “catastrophically bad idea” to oust her after a month in office.

Today Foreign Secretary James Cleverley declined to confirm or deny whether the government would maintain its business tax policy, saying only that it was important for companies to remain competitive.

Criticism of the government’s overall plans has also been leveled from within the Conservative party itself as opinion polls show that support for it has collapsed. The papers say some MPs who never wanted Truss to replace Boris Johnson as leader already want her out.

“I think changing the leadership would be a disastrously bad idea, not only politically but economically, and absolutely we’re going to stay focused on growing the economy,” Cleverly said of Truss.

Truss, the 47-year-old former foreign secretary, was elected in September in a vote among Conservative party members on a pledge to lift the economy from years of stagnation by cutting taxes and reforming areas such as immigration and employment.

“I can only see one outcome: the withdrawal of most of the mini-budget,” said Paul Goodman, editor-in-chief of ConservativeHome, a website particularly influential among the Tories.

RES-EMP

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