Liz Truss-led government makes U-turn on plans to cut 45p income tax rate for higher earners

The United Kingdom government has made a U-turn on its decision to scrap the 45 percent rate of income tax for higher earners. Chancellor of the Exchequer, Kwasi Kwarteng, has told the BBC that the plans for tax cuts, announced just ten days ago, had caused a "massive distraction" from a "strong package."

The decision to take a step back has come as a humiliation for newly-elected Prime Minister Liz Truss. The decision has followed severe criticism made by several Tory MPs.

Earlier, the government announced to scrap the 45 percent rate of the income tax for people earning over £150,000 per year. The announcement was a part of a package of tax cuts.


Chancellor Kwarteng said the tax proposal was lessening the significance of "a strong package," which included cuts to the basic rate of income tax and corporation tax and support for energy bills. Kwarteng accepted that there was a "humility" and "contrition" in taking the government decision back. He added they listened to people.

The Chancellor informed that Prime Minister Truss decided not to proceed with the contentious proposals. When asked whether he was considering resigning, Kwarteng stated he was "not at all" thinking about that. He further stated that there were no plans for tax cuts ahead of the next Budget.
FAQ
1). Who is Kwasi Kwarteng?
Kwasi Kwarteng is the Chancellor of the Exchequer.

2). On which decision did the UK government make a U-turn?
The UK government has decided not to proceed with its plans to scrap the 45 percent rate of the income tax for higher earners.