Prime minister Liz Truss withdrew at eleven o’clock under great pressure the abolition of the highest tax rate. Yet its economic policies of growth, low taxes and deregulation remain controversial at a time when many people cannot pay their bills. Due to historically low polls, her position is under heavy pressure.
Finance Minister Kwasi Kwarteng wants to reduce taxes ‘without any cover for it’. Where he wants to get this money from ‘nobody knows’, says de Waard. This reckless economic policy earned him the nickname “Kami-Kwasi.”
“I don’t accept the idea that lowering taxes is unfair,” prime minister Liz Truss said. She is harking back to the policy of trickle down economics from the 80s. The money left over by the rich with lower taxes is spent and the whole society reaps the benefits.
Rich people put extra money away more often instead of putting it into the economy. In addition, the UK is a country that produces little itself, so much of the extra money spent disappears across the border.
Until the pound falls
Since the announcement of this policy, the pound sterling took a nosedive, a weaker currency strengthens its export competitiveness. However, the UK has a service economy that exports little, eliminating this advantage. In addition, imports from the UK are largely done in dollars, which makes a weak pound unprofitable.