Britain’s Treasury chief said Monday he will bring forward the publication of the government’s full fiscal statement after facing widespread criticism for not providing details about a multibillion-pound, tax-cutting stimulus package he announced last month.
Kwasi Kwarteng had been expected to publish details of his financial strategy on Nov. 23, two months after he first unveiled plans that included some 45 billion pounds ($50 billion) in tax cuts, to be paid for by government borrowing. That plan sparked days of turmoil on financial markets and sent the British pound tumbling to record lows against the U.S. dollar.
Kwarteng said Monday he will now set out his medium-term fiscal plan and publish economic forecasts from the independent Office for Budget Responsibility on Oct. 31.
It was another course reversal for the embattled Treasury chief, who last week said he would abandon his plans to scrap the top 45% rate of income tax for top earners — a policy that had drawn almost universal opposition.
That U-turn was welcomed by many, but Kwarteng and Prime Minister Liz Truss’s Conservative government still face scepticism because they have said they will stick to the government’s other tax policies, including slashing the basic rate of income tax and reversing a corporation tax hike planned by the previous government.
The government insists its plan will boost economic growth, but many critics say the tax cuts will likely mean taking money away from public spending like social services, leaving the poorest worst off amid the worst cost-of-living crisis in decades.
Mel Stride, the chair of Parliament’s treasury committee, welcomed the decision to bring forward the full fiscal statement and said it could result in a smaller-than-expected rise in interest rates. The government’s unfunded tax-slashing plan has sparked widespread concern that the Bank of England will soon hike interest rates significantly to tame inflation.
Former Cabinet minister Grant Shapps said the decision was “a belated but sensible move given the urgent need to show markets the most transparent view of the U.K. economy.”News Source: WFMZ