Liz Truss faces growing pressure to rip up tax-slashing plans

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Truss was the target of her own lawmakers as she called for more U-turns on her tax-cutting agenda after refusing to cut spending to balance the books.

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The prime minister’s leadership was in renewed danger as he was accused of “trashing the past 10 years” of Tories’ records in a grueling meeting with backbenchers.

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Lawmakers pressured him to restore market confidence in his government, with reports mounting calls for him to reverse or delay his plan to repeal a 19% to 25% increase in corporation tax due in April. is facing.

Ms Truss has insisted this and other tax cuts will boost growth, but so far unproven measures in Chancellor Quasi Quarteng’s mini-budget have sparked chaos in financial markets.

Mel Stride, Tory chairman of the Commons Treasury Committee, said given Ms Truss’s commitments to protect public spending, the question was whether a plan which at £43bn would not include “at least some element of the front line” Were. The tax-slashing package may reassure investors.

“Credibility may now swing towards evidence of a clear change in behavior rather than simply coming up with other measures that try to round out the fiscal cycle,” Mr Stride said.

Conservative former minister David Davies called the mini-budgets “maxi-shambles” and suggested reversing some tax cuts would allow Truss and Mr Quarteng to defy leadership challenges for a few months.

“If they do that I think Mel Stride and others will follow them and they will buy some time,” he told ITV’s Peston.

One of the obvious ways would probably be to defer certain tax deductions or failure to levy taxes.

The former deputy prime minister, Damien Green, said Conservative lawmakers are openly discussing reversing some mini-budget measures, as they question how she can reduce debt after rejecting public spending cuts .

“It’s really a topic of conversation even around the tea rooms in the House of Commons, because we can all do the rough math and see that it’s very hard,” he told BBC Radio 4’s PM programme.

“One of the obvious ways would probably be to postpone some tax deduction or failure to impose taxes.”

As lawmakers openly discussed the possibility of removing the prime minister, an attempt to win over rebel lawmakers failed at a Tory backbench 1922 committee meeting on Wednesday evening.

Addressing the group, Ms Truss said small businesses would face “catastrophe” if the government had not acted to limit energy prices, according to aides.

But he has faced open criticism, with lawmakers reportedly raising concerns about rising mortgage rates and the Tories’ slowdown in the polls.

Commons Education Committee chair Robert Halfon told Ms Truss that she had “eroded the conservatism of workers of the past 10 years”.

The prime minister and chancellor are expected to meet with key lawmakers from next week to assure them that Mr Quarteng’s medium-term financial plan on 31 October will address their concerns.

But Jacob Rees-Mogg suggested that the government might ignore the Office for Budget Responsibility with strategy if it predicts low growth and rising debt.

The business secretary told ITV’s Peston that “the exact record of the forecast has not been very good” and that the chancellor could draw on “other sources of information”.

Earlier on Wednesday, Ms Truss stressed during her second prime minister’s questions that she was not planning to cut public spending “absolutely” but insisted that taxpayers’ money would be put to good use. .

But the comments failed to prevent another day of economic unrest, which saw the cost of government borrowing rise and the pound fell against the euro and the dollar.

Since Mr. Quarteng’s September 23 mini-budget, the value of sterling has fluctuated and yields on government bonds, the cost of state borrowings, have risen to such an extent that the Bank of America is trying to prevent problems for pension funds. England was forced to intervene.

The Times newspaper reported that Ms Truss had also been warned by senior advisers that it was “not credible” to proceed with large tax cuts without risking the financial crisis.

It has already dropped plans to cut the 45p rate of income tax for the top earners.

Economists have suggested that tens of billions of pounds of spending cuts or tax increases would be needed to restore confidence in the government’s grip on national finances.

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