British Prime Minister Liz Truss may be ousted six weeks into her tenure after she and fellow ministers caved on most portions of an aggressive economic reform package.
Truss, who replaced outgoing head of government and fellow Conservative Party member Boris Johnson last month, unveiled a tax cut and energy production plan in the first days of her premiership. After investors concerned about the government’s ability to meet debt obligations jettisoned their assets, Truss announced that she would eliminate portions of her plan and dismissed finance minister Kwasi Kwarteng.
“We need to act now to reassure the markets of our fiscal discipline,” she said in a statement. “I have therefore decided to keep the increase in corporation tax that was planned by the previous government.”
Beyond canceling the higher corporate tax rate, Truss had planned to slash the basic income tax rate to 19% and launch discussions about special economic zones across the country.
Truss had formerly doubled down on her growth agenda during a number of local radio interviews that followed the market headwinds. “I understand that families are struggling with their fuel bills, and we had to take urgent action to get our economy growing, get Britain moving, and also deal with inflation,” she explained. “And of course, that means taking controversial and difficult decisions. But I’m prepared to do that as prime minister, because what’s important to me is that we get our economy moving.”
Amid the political turmoil, which comes immediately after the death of Queen Elizabeth II, more than 100 ministers in her own party are preparing to oust Truss, according to a report from The Daily Mail. “She has lost the confidence of the markets and she is hemorrhaging support. We need to cauterize the wound, and fast,” one unnamed minister told the outlet. “There is an overwhelming desire among colleagues for it to be over — people want it done this week.”
In a portion of her agenda that appears to remain intact, Truss also pushed for higher fossil fuel production and set the goal of becoming a net exporter of energy by 2040. She also announced a new round of oil and gas leases for the North Sea and lifted her nation’s moratorium on shale gas production, including the technique of fracking, by which pressurized liquid is injected into underground rocks to extract fuels.
“We are cutting off the toxic power and pipelines from authoritarian regimes and strengthening our energy resilience,” Truss said during a speech to the United Nations General Assembly. “We will ensure we cannot be coerced or harmed by the reckless actions of rogue actors abroad. We will transition to a future based on renewable and nuclear energy while ensuring that the gas used during that transition is from reliable sources including our own North Sea production.”
The policy comes as much of the continent struggles with soaring energy prices amid the Russian invasion of Ukraine. Member states of the European Union are currently weighing various measures to help member states cope with a freeze in Russian energy exports and the destruction of the Nord Stream pipeline system.
At the beginning of this year, Britain had a top personal income tax rate of 45%, which is lower than most European countries, yet higher than the 37% rate in the United States, according to a report from the Tax Foundation. Truss had argued in an opinion piece that politicians should begin focusing “on growing the pie” rather than fighting over “how to slice up” the pie.
