After financial turmoil, British PM Liz Truss forced to make U-turn on abolishing 45% tax rate for rich


British Prime Minister Liz Truss on Monday announced the U-turn on a major financial policy decision, abolishing the controversial 45% tax rate for the country’s richest population. Truss made the announcement days after her government’s decision caused financial mayhem in the country, making the value of the British pound plunge against the US Dollar.
Liz Truss

“We get it and we have listened. The abolition of the 45pc rate had become a distraction from our mission to get Britain moving. Our focus now is on building a high growth economy that funds world-class public services, boosts wages, and creates opportunities across the country,” Truss tweeted.

Earlier, her Chancellor (Finance Minister), Kwasi Kwarteng, issued a detailed statement outlining his reasons to revoke his own policy decision announced last month.

Kwarteng said that the decision to scrap the 45% tax rate for the rich had become a ‘distraction from our overriding mission to tackle the challenges facing the country.’

He said that the government’s plans were designed to ‘build a more prosperous economy.’ Kwarteng, however, has rejected the call for resignation for getting his major policy decision horribly wrong.

Curiously, Truss had fiercely defended her government’s decision to abolish 45% tax rate only a day ago during an interview with the BBC.

With today’s announcement, the value of the British pound began to increase against the US dollar, meaning that the Bank of England may not be required to intervene to control the rapid downfall of the British currency.