Liz Truss Facing Growing Pressure

On Oct 13, 2022

British Prime Minister Liz Truss faced growing pressure on Thursday from lawmakers in her own party to rethink tax-cut plans that sent markets into turmoil, with one ally saying it would be a “disastrously bad idea” to oust her a month into the job.

Truss’s economic package, announced last month, has caused a ‘rout’ in the government bond market, with some investors and Conservative Party lawmakers calling on her to reverse a plan for 43 billion pounds ($48 billion) of unfunded tax cuts, including a move to hold corporation tax at just 19%.

The government has said “it will stick to most of its tax cut plans while also protecting public spending,” but economists and critics say something has to give.

On Thursday, foreign minister James Cleverly shied away from confirming or denying whether the government would retain its corporation tax policy, saying only it was important to keep businesses competitive.

“The chancellor will come to the despatch box,” he said when asked by Sky News whether the corporation tax plan would definitely stay. “I think it’s absolutely right that we’ve made it clear that we want to invest in businesses.”

There has been vocal criticism of the government’s overall plans from within the Conservative Party as polls show its support has collapsed. Newspapers reported that some lawmakers who never wanted Truss to replace Boris Johnson as leader in the first place already wanted her out.

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

Reuters /Shakirat Sadiq