Britain’s Chancellor of the Exchequer Kwasi Kwarteng took an early flight back to London from a U.S. trip late on Thursday, amid reports of an imminent U-turn on more of the fiscal policies he proposed three weeks ago.
Kwarteng left a day early from a series of meeting with International Monetary Fund (IMF) leaders in Washington D.C., according to multiple media reports.
Britain’s Trade Minister Greg Hands tried to hose down the reports on Sky News on Friday morning, claiming: “It’s not unusual … to come back a day early from an international visit.”
But the fact is, Kwarteng and his boss, Prime Minister Liz Truss, are facing enormous pressure after a disastrous so-called mini-budget unveiled on September 23 included a vast package of unfunded tax cuts, stoking investors’ fears about the long-term sustainability of the government’s debt and sparking market turmoil.
Truss’ government has already backtracked on scrapping the 45 percent tax bracket for highest-income earners, the plan’s most symbolic and politically sensitive measure. But it is now considering another humiliating U-turn — this time on the decision to cancel former Chancellor Rishi Sunak’s plan of raising corporate taxes to 25 percent from 19, according to local media. Up to £24 billion in planned tax cuts could be scrapped, according to the Financial Times.
Truss “must come up with a credible tax policy and that will involve some retrenchment from the announced position,” a senior government insider told POLITICO’s London Playbook.
Truss’ government is set to announce a “medium-term fiscal plan” on October 31.
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