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UK cabinet was not informed of plans to scrap top rate of tax, Truss says
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BIRMINGHAM, England (Reuters) – British Prime Minister Liz Truss said on Sunday her cabinet of top ministers was not informed in advance that the government planned to abolish the top rate of tax, adding it was a decision taken by finance minister Kwasi Kwarteng.
BIRMINGHAM, England (Reuters) – British Prime Minister Liz Truss said on Sunday her cabinet of top ministers was not informed in advance that the government planned to abolish the top rate of tax, adding it was a decision taken by finance minister Kwasi Kwarteng.
The government sparked turmoil in financial markets last month after Kwarteng delivered a plan to cut taxes, mainly benefitting the wealthiest, without detailing the impact on the public finances or how ministers would reform the economy to spur growth.
Truss’s comment that it was Kwarteng’s decision to remove the top rate of income tax is the first sign Truss might be trying to distance herself from her chancellor. However, she also reiterated the government was sticking with the policy.
Asked whether all her cabinet was told of the move, Truss told the BBC: “No, no we didn’t. It was a decision that the chancellor made.”
Truss said: “When budgets are developed, they are developed in a very confidential way. They are very market sensitive. Of course, the cabinet is briefed, but it is never the case on budgets that they are created by the whole cabinet.”
According to the Sunday Times, Kwarteng attended a champagne reception with hedge fund managers at the home of a Conservative donor on the same day he delivered his mini-budget.
One source told the newspaper that guests told Kwarteng to “double down” on his radical tax cutting plans.
Truss said her finance minister met business people all the time as “that’s his job”.
The opposition Liberal Democrats called for an official investigation into what happened.
Jake Berry, chairman of the Conservatives, said he also attended the event, when the finance minister gave a short speech that did not include any insight into the government’s future plans.
Berry said Kwarteng in his speech at the event “did not give any insight into future plans and I’m sure in terms of his private conversations he didn’t give any”.
(Reporting by Elizabeth Piper and Andrew MacAskill; Editing by Raissa Kasolowsky)
Corporate tax is a tax imposed on the income or profit of corporations. It is typically calculated as a percentage of the company's net income and varies by jurisdiction.
Financial markets are platforms where buyers and sellers engage in the trade of assets such as stocks, bonds, currencies, and derivatives. They play a crucial role in the economy by facilitating capital allocation.
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