The u-turn comes a day after Prime Minister Liz Truss defended the policy, which sent the pound plummeting to record lows and sparked turmoil in the markets.
The U.K. government on Monday said it was dropping controversial plans to scrap the highest rate of income tax for high earners, an embarrassing u-turn for Prime Minister Liz Truss after the policy drew international condemnation, roiled markets and pushed the pound to record lows.
The reversal marks a humiliating climbdown for Truss’ government after less than a month in power. The tax cut, which would have benefited the country’s wealthiest 1%, was one of a slew of financial policies announced by Kwarteng in late September that included other tax cuts, removing caps on bankers’ bonuses and plans to control soaring energy costs, all of which would have been financed by increased government borrowing. The announcement came as a shock to many, including members of Truss’ cabinet, and no mention of it was made during Truss’ lengthy campaign for party leadership or when she was elected to Parliament under Boris Johnson’s leadership in 2019, who pledged to raise public spending, end widespread cuts to spending and “get Brexit done.
