AP

UK’s Truss sticks by economic plan as her party worries

Oct 2, 2022, 2:23 AM | Updated: 9:16 pm

Britain's Prime Minister Liz Truss arrives to attend the Conservative Party conference at the ICC, ...

Britain's Prime Minister Liz Truss arrives to attend the Conservative Party conference at the ICC, in Birmingham, England, Saturday, Oct. 1, 2022. (AP Photo/Rui Vieira)

(AP Photo/Rui Vieira)

LONDON (AP) — British Prime Minister Liz Truss said Sunday that she could have done a better job “laying the ground” for her package of unfunded tax cuts, but insisted she would push on with an economic plan that has caused turmoil on financial markets and weakened the country’s public finances.

Truss acknowledged that the U.K. faces “a very turbulent and stormy time,” but said her policies would lead to a “high-growth, low-tax economy” in the longer term.

The comments are unlikely to calm Truss’ Conservative Party, which opens its four-day annual conference on Sunday in the central England city of Birmingham amid plunging poll ratings and growing public discontent.

Truss took office less than a month ago, promising to radically reshape Britain’s economy to end years of sluggish growth. But the government’s Sept. 23 announcement of a stimulus package that includes 45 billion pounds ($50 billion) in tax cuts, to be paid for by government borrowing, sent the pound tumbling to a record low against the dollar.

The Bank of England was forced to intervene to prop up the bond market, and fears that the bank will soon hike interest rates caused mortgage lenders to withdraw their cheapest deals, causing turmoil for homebuyers.

“I have learned from that,” Truss told the BBC. “I will make sure in future we do a better job of laying the ground.”

Truss stuck to her insistence that Britain’s economic problems were part of a global spike in inflation and energy prices spurred by Russia’s invasion of Ukraine.

In a bid to calm the market turmoil, Truss and her finance minister, Chancellor of the Exchequer Kwasi Kwarteng, have said they will set out a medium-term fiscal plan on Nov. 23, alongside an economic forecast from the independent Office for Budget Responsibility.

Many economists, and many Conservatives, say that means weeks more economic turmoil are ahead. Michael Gove, who served as a senior minister in previous Conservative governments, said the announcement “will have to be brought forward” and some parts of the economic package will have to be dropped.

Gove said there was “an inadequate realization at the top of government about the scale of change required.”

Many Conservative lawmakers are worried that a leader chosen to replace Prime Minister Boris Johnson for her boosterish promises of economic growth has set the party on course for defeat in the next general election, due by 2024. Opinion polls suggest the opposition Labour Party is opening up a substantial lead.

Some delegates arriving for the conference in Birmingham were gloomy about the future of the party, which has been in power since 2010.

“I think it’s going to be a rocky conference, definitely,” said Daniel Pitt, a party member from Erewash in central England. “The prime minister has to try and steady the ship.”

Truss said she would “do what I can to win the hearts and minds of my colleagues across the Conservative Party” — but that doesn’t appear to include changing course.

Truss said she wouldn’t ditch the most unpopular part of her economic package, a decision to scrap the top 45% rate of income tax paid on earnings above 150,000 pounds ($167,000) a year. And she wouldn’t say whether there will have to be cuts to welfare and public services to pay for lower taxes.

Asked if the Cabinet as a whole had decided on the cut to the top tax rate, Truss said “no … It was a decision the chancellor made.”

“I think there has been too much focus in politics on the optics or how things look,” Truss said. She said she was confident her policies would get the economy growing by 2.5% annually — a target the U.K. hasn’t hit for years.

Labour Party economy spokeswoman Rachel Reeves accused the Conservative government of “doing some sort of mad experiment with the U.K. economy” and ignoring “the anxiety and fear” felt by millions of ordinary people.

“The idea that trickle-down economics is somehow going to deliver the 2.5% growth we all want to see is for the birds,” Reeves told the BBC.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Tracy Toulou...

Associated Press

How to tackle crime in Indian Country? Empower tribal justice, ex-Justice Department official says

A recently retired director of the Justice Dept. says the federal government hasn't given tribal justice systems equal recognition.

13 hours ago

Speaker of the House Mike Johnson...

Associated Press

House Speaker Mike Johnson says he will push for aid to Israel and Ukraine this week

House Speaker Mike Johnson said Sunday he will try to advance wartime aid for Israel this week, along with funding for Ukraine.

14 hours ago

President Joe Biden speaks at a campaign rally Saturday, March 9, 2024, at Pullman Yards in Atlanta...

Associated Press

US shoots down ‘nearly all’ Iran-launched attack drones as Biden vows support for Israel’s defense

Joe Biden cut short a weekend stay at his beach house to meet with his national security team as Iran launched an attack against Israel.

2 days ago

Protesters in Phoenix shout as they join thousands marching around the Arizona state Capitol after ...

Associated Press

Abortion ruling supercharges Arizona to be an especially important swing state

A ruling this week instituting a near-total abortion ban supercharged Arizona's role, turning it into the most critical battleground.

3 days ago

Former President Donald Trump, center, appears in court for his arraignment, Tuesday, April 4, 2023...

Associated Press

Manhattan court searching for jurors to hear first-ever criminal case against a former president

Jury selection is set to start Monday in former President Donald Trump's hush money case — the first trial of the presumptive nominee.

3 days ago

Follow @ktar923...

Sponsored Content by Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

Sponsored Articles

...

DESERT INSTITUTE FOR SPINE CARE

Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

UK’s Truss sticks by economic plan as her party worries