British Prime Minister Liz Truss tries to be Thatcher. The pound plunges to a 37-year low

“A tax-cutting government that prioritizes economic growth and focuses on a new fiscal approach for a new era.” To translate the promise of the new premier into concrete actions Liz Truss the new chancellor of the exchequer (the equivalent of our minister of the economy, ed) Kwasi Kwarteng which today presented its “mini-financial” to the House of Commons. A package of ambitious reforms, which includes the largest tax cut since 1972 and tax breaks for 45 billion pounds (about 1.5% of GDP). A shocking intervention that left the British and economists speechless and sank the pound to a 37-year low, especially since the maneuver was presented without the slightest hint to its financial coverage. A big problem for a country that imports much of the gas and food it consumes. Yesterday the Bank of England raised rates by 0.5%, less than expected, and officially pronounced ga the word ‘recession’. Kwarteng’s planned ‘relaunch of UK economic competitiveness’ goes through controversial measures but of high political value to the government of the new ‘Iron Lady’ Truss he replaced Boris Johnson precisely in the name of a radical Thatcherism

Rich ever richer, and the poor … we’ll see The idea of ​​the Truss government is that of the so-called ‘trickle down economics’, in practice, tax exemption from the world of finance and large companies so that the wealth produced “drips” even on the less well-off, creating new opportunities. As part of this approach, the Chancellor also removed the infamous cap on bonuses paid to City bankers that had been introduced after the 2008 financial crisis and subsequent public bailouts. The stated goal is to ‘attract more bankers to work in London, “by paying taxes in the UK rather than in other European countries”

The government quashed the expected increase in corporate tax, corporate tax, with the aim of encouraging investment and job creation. As early as April 2023 i 629 thousand taxpayers the richest who earn over £ 150,000 a year will be exempt from the higher tax rate of 45% – which will be abolished and replaced by a 40% rate, currently applied to incomes above £ 50,000. The base rate of the lowest incomes has also been reduced (for those who earn from 20 thousand to 50 thousand pounds) which goes from 20% to 19%. Overall, however, the reform rewards the affluent classes. As he writes on Twitter Jo MaughamDirector of The Good Law Project: “Liz Truss’s finance means that those who earn £ 1 million a year will put £ 54,400 in their pockets while those who earn £ 25,000 will save an equivalent of £ 280. ‘ It is difficult to imagine a worse response to the high-cost emergency “

Energy emergency – What really interests families is being able to spend the winter without bleeding to pay for food and heating. The energy package allocated by the mini financial Truss confirms the freezing of bills to a ceiling of 2,500 pounds for two years earmarking for this purpose 60 billion poundsor which, however, will be entirely borne by the public purse. The energy giants were indeed exempt from the so-called ‘windfall tax’ the tax on the extra profits of companies that produce gas and electricity, which will also be able to enjoy an emergency liquidity package guaranteed by the government and the Bank of England. “Removing the ceiling on bankers’ profits, cutting corporate taxes and rejection of the windfall tax, is the merciless signal that we will have a winter of poverty for millions of people not because we are a poor country but because we have more and more social inequality “commented the former Labor premier Gordon Brown.

In all, the 45 billion of the maneuver will be financed through record debt, at a time when the Bank of England was forced to raise interest rates from 1.75 to 2.25%, the highest level in the last 40 years to curb runaway inflation. The Labor opposition has an easy game in replying: “The Tories are perpetrating a ferocious circle of stagnation – said the shadow chancellor. Rachel Reeves – the government has confirmed that the costs of freezing energy bills will be financed through debt without touching the huge profits of the energy giants. The oil and gas producers will do a toast to the clerk while the workers will receive the bill. The debt is higher than what we can afford at a time when interest rates have risen, and the chancellor refuses to publish the independent economic commission’s forecasts on the impact the maneuver will have on our public finances, economic growth and on inflation, this budget is a menu without prices “

Re-launch of investments – The Truss government aims to ‘attract investment’ by pushing the acceleration of infrastructure projects and with the establishment of 40 investment zones in the country, where development will be tax-free for businesses. For us Italians, the good news is that foreigners who shop in Great Britain they will no longer have to pay VAT. “We cannot continue with 15 years of anemic growth – a simpler and smarter tax approach can pay off and businesses will be ready to maximize investment incentives – he commented. Tony Dankerdirector of CBI the British Confindustria – the mini-financial is not perfect and we are only at the beginning but the Chancellor has given the signal that there will be further economic proposals this autumn and these will be vital to sustain growth ”.

Many in Westminster call Truss’s a dangerous gamble by the government towards elections: Will the Truss tax cuts get the economy going again in time for 2024? While they think about it, the British will be able to drink it up for now, as it will alcohol tax of 600 million pounds frozen, and they can save 7p on a pint, 38p on a bottle of wine, and £ 1.35 on a bottle of spirits. At least the pubs are safe for now.

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About Banner Leon

Videogames entered his life in the late '80s, at the time of the first meeting with Super Mario Bros, and even today they make it a permanent part, after almost 30 years. Pros and defects: he manages to finish Super Mario Bros in less than 5 minutes but he has never finished Final Fight with a credit ... he's still trying.

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