video How is Liz Truss doing as UK’s Prime Minister so far?
Former Deputy National Security Advisor Victoria Coates reacts to U.K. Prime Minister Liz Truss’s reversing her stance on tax cuts on ‘Cavuto: Coast to Coast.’
U.K. Prime Minister Liz Truss pledged Wednesday to ride out the turmoil unleashed by her tax-cutting economic agenda, saying the "disruption" will pay off in a wealthier, more efficient Britain.
Truss closed a tumultuous Conservative conference in the central English city of Birmingham with a speech intended to revive the spirits of delegates. She told them: "I am ready to make the hard choices" and branded her many critics — including opposition parties, trade unions, environmental protesters and parts of the media — an "anti-growth coalition."
Many Tories are in a glum mood after a four-day gathering that saw policy U-turns from the government, dire opinion polls and open rebellion from lawmakers who fear the party is doomed to lose the next national election under Truss, who took office just a month ago after winning a party leadership vote.
Britain’s Prime Minister Liz Truss smiles before making a speech at the Conservative Party conference at the ICC in Birmingham, England, Wed., Oct. 5, 2022. ( AP Photo/Kirsty Wigglesworth)
UK SLASHES PERSONAL, CORPORATE TAXES IN BID TO SPUR GROWTH
Truss vowed to stick with her plan to reshape Britain’s economy through tax cuts and deregulation in a bid to end years of sluggish growth. She said cutting taxes was "the right thing to do, morally and economically."
Truss acknowledged that "these are stormy days" for a country still mourning the death of Queen Elizabeth II and rocked by Russia's invasion of Ukraine.
"In these tough times, we need to step up. I am determined to get Britain moving, to get us through the tempest and put us on a stronger footing as a nation," she said, as she vowed to "stand by our Ukrainian friends, however long it takes."
Seeking an upbeat tone, Truss took the stage to the strains of the 1990s hit "Moving on Up." The founder of the band behind the song, M People, said he was "livid." Mike Pickering said he hoped Truss looked at the lyrics of the song — "Move right out of here, baby, go on pack your bags."
The speech was briefly disrupted by two Greenpeace activists who unfurled a banner reading "Who voted for this?" — and were escorted out of the hall to boos from the audience. Truss shrugged it off.
"Whenever there is change, there is disruption," she said. "Not everyone will be in favor. But everyone will benefit from the result — a growing economy and a better future. That is what we have a clear plan to deliver."
Woman holds British pound banknotes in this illustration taken May 30, 2022. (REUTERS/Dado Ruvic / Reuters Photos)
THE BRITISH POUND HAS TAKEN A TUMBLE. WHAT'S THE IMPACT?
The pound, which has been on a roller-coaster journey since Truss unveiled her economic proposals last month, fell about 1% to $1.136 after the speech.
The currency had hit a record low of $1.03 soon after Truss announced a stimulus package that includes 45 billion pounds ($50 billion) in tax cuts to be paid for by government borrowing on September 23. The Bank of England was forced to intervene to prop up the bond market and stop a wider economic crisis.
Under political and financial pressure, the government on Monday scrapped the most unpopular part of its budget package: a tax cut on earnings above 150,000 pounds ($167,000) a year. That will save about 2 billion pounds, a small share of the government’s 45 billion-pound tax-cutting plan. Most economists say deep public spending cuts will be needed to pay for the rest.
The government says it will publish a fully costed fiscal plan, alongside an independent economic forecast, on November 23.
Britain’s Prime Minister Liz Truss makes a speech at the Conservative Party conference at the ICC in Birmingham, England, Wed., Oct. 5, 2022. (AP Photo/Kirsty Wigglesworth / AP Newsroom)
UK GOVERNMENT DROPS PLANS FOR TAX CUT ON WEALTHY THAT PROMPTED TURMOIL ON FINANCIAL MARKETS
Truss defended the chaotic rollout of her economic measures, saying that in extraordinary times, "it would have been wrong not to have proceeded rapidly with our energy and tax plan."
Truss argues that her policies will bring economic growth, higher wages and eventually more tax revenue for the government to spend. Critics say the plans do little to help millions of people who are struggling right now with a cost-of-living crisis fueled by soaring energy prices.
Truss insists she is committed to supporting the most vulnerable, pointing to a cap on energy prices that took effect October 1. However, she has refused to promise that benefits and state pensions will increase in line with inflation, which has been the practice for years.
That has alarmed some Conservative lawmakers who say it amounts to penalizing the poor while giving tax cuts to the better-off. Several said during the conference that they would not vote for the measure.
Former Prime Minister Gordon Brown, from the Labour Party, said cutting benefits would provoke "a national uprising."
Truss said "the status quo is not an option" and she would "stay the course."
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However, uniting her party will be a tough task. As delegates met for panel discussions and wine receptions this week inside a cavernous conference hall, the government descended into factional fighting. Home Secretary Suella Braverman, a Truss ally, accused Conservative lawmakers who disagreed with the leader of staging "a coup."
Amid the Tory turmoil, the opposition Labour Party has taken a commanding lead in opinion polls. A national election does not have to be held until 2024, but many Conservatives fear the party is running out of time to close the gap.
Polling expert John Curtice said "all of the ingredients for electoral defeat are in place" for the Conservatives.
Some delegates left the conference early because of the glum mood, and to avoid a nationwide train strike on Wednesday. Many of those who stayed to listen and applaud Truss said they were impressed.
"I really felt her conviction," said Mo Pantall, a businesswoman from Cambridge in eastern England — though she noted there had been some in the hall "who weren't clapping."
"They weren't with Liz," Pantall said. "But 90, 95 percent of us are. We know that unity at this time is what will make us succeed."
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