British government drops plans to cut income tax for top earners

London: The British government yesterday dropped plans to cut income tax for top earners. It was unveiled on September 23 sparking turmoil in financial markets and sending the pound to record lows. In a dramatic about-face, Treasury chief Kwasi Kwarteng abandoned plans to scrap the top 45 per cent rate of income tax paid on earnings above 150,000 pounds a year. He said that the decision to scrap the top rate tax cut had been taken with "some humility and contrition", after his party's lawmakers reacted with alarm to a move that favoured the rich during an



economic downturn. 

Kwarteng and Prime Minister Liz Truss wanted the announcement of the cut to underscore their determination to create a low-tax, high-growth economy and make Britain more competitive with other economies.

The decision to reverse course is likely to put Prime Minister Liz Truss and Chancellor of the Exchequer Kwarteng under even greater pressure, the latest threat to political stability in a country that has had four prime ministers in the last six years.