WWNC – The next political uprising against British Prime Minister Liz Truss’ economic plans is expected to be sparked by her refusal to rule out benefit payments being reduced by less than the rate of inflation in order to fund her tax-cutting growth plan.
Truss and her finance minister Kwasi Kwarteng are scrambling to explain how they would pay for the $46 billion worth of tax cuts they announced last month, which caused chaos in the financial markets since they did not specify how they would be paid for.
To please Conservative Party lawmakers who regarded it as a gift to the rich during a cost-of-living crisis, the administration was already compelled to withdraw its intention to abolish the highest rate of income tax.
Kwarteng also agreed to publish the government’s more comprehensive debt reduction plan earlier, along with projections for economic growth and public finances, late on Monday. According to Truss, the plan might place limitations on the growth of welfare benefits.
When asked if benefits would increase in accordance with inflation, which was 9.9% in August, Truss responded to the BBC: “We are going to have to make decisions about how we bring debt as a proportion of GDP back down in the medium term.”
“These problems require a comprehensive examination. Financial responsibility is required of us.”
Truss, who was chosen as prime minister by party members rather than the general public, is attempting to jolt the economy out of a decade of slow growth with a plan reminiscent of the 1980s to cut taxes and regulations, much of which will be paid for by massive government borrowing.
But she does so during one of the most challenging periods for the economy, when consumers are cutting down on spending in anticipation of what is anticipated to be a challenging winter and the government is forced to spend tens of billions of pounds subsidizing energy costs.