Liz Truss bends on tax cuts
Truss clearly is. But with more and more of her MPs, especially prominent ones she left out of her cabinet, saying they would vote against her economic plan, it wasn’t obvious she would be for very long. Either she’d lose a parliamentary vote on the plan and lead a badly divided party into an election. Or the party would dump her and choose a new leader — barely a month after finishing up the summer-long leadership campaign that she won.
The other non-controversial part of the economic plan, though it should have been very controversial, was the decision to adopt a Labour-style approach to the current energy crunch and cap prices, at a cost estimated at £60 billion. Price control is not the sort of thing conservative governments usually favour and £60 billion is a budget-buster. Yet the decision to intervene in this way met with little opposition and did not crash the pound.
The International Monetary Fund, in its Davosian wisdom, felt obliged to issue a warning that reducing top rates would increase inequality. In the short run, it might well — though if it also sparked greater economic growth, then in the longer run it could make inequality irrelevant or even reduce it.
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