The Chancellor has had to perform a humiliating U-turn on his proposals to scrap the 45p top rate of income tax after it created widespread panic in the mortgage and pension sector, as well as huge criticism from both opposition parties and his own Conservative Party. The scrapping of the top rate of tax had a very bad look about it when so many people across the UK are struggling to make ends meet, so this change of direction did seem inevitable sooner rather than later.
A New Approach To Build A More Prosperous Economy
Kwasi Kwarteng is quoted in an article in the Belfast Telegraph as saying:
“From supporting British business to lowering the tax burden for the lowest paid, our Growth Plan sets out a new approach to build a more prosperous economy.”
“However, it is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.
“As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened.”
“This will allow us to focus on delivering the major parts of our growth package.
“First, our Energy Price Guarantee, which will support households and businesses with their energy bills.
“Second, cutting taxes to put money back in the pockets of 30 million hard-working people and grow our economy.
“Third, driving supply side reforms – including accelerating major infrastructure projects – to get Britain moving.”
Government Missteps Will Undermine Confidence
The Head of Federation of Small Businesses Northern Ireland, Roger Pollen, is also quoted in the article on the subject, saying:
“The principle of it is not the point, it shows the government has already made a misstep in its two weeks of action, which is not welcome because it undermines confidence.
“I see Sterling has risen on the back of the news, so let’s hope it’s the only stumble they make and we can actually see clear policies coming through that we can rely and build our businesses on.”
He went on to say that:
“Our members weren’t focused on this part of the package at all, they were focused on the energy packets which were promised.
“That’s where there is a real problem, businesses have been articulate in the problems they’re facing. Government has now came forward and said yes we will give you support, but there is a blockage in the system,” he said.
“The commitment to money for businesses is great and we can bank that, but we haven’t seen the cash yet and prices are rising.”
“It’s exactly what we need to see, it’s just not coming along yet.”
Let us hope the Government get their act together and fast.