BIRMINGHAM, ENGLAND (AP) – United Kingdom (UK) Prime Minister Liz Truss pledged yesterday to ride out the turmoil unleashed by her tax-cutting economic agenda, saying the “disruption” will pay off in a wealthier, more efficient Britain.
Truss closed a tumultuous Conservative conference in the central English city of Birmingham with a speech intended to revive the spirits of delegates.
She told them, “I am ready to make the hard choices” and branded her many critics – including opposition parties, trade unions, environmental protesters and parts of the media – an “anti-growth coalition”.
Many Tories are in a glum mood after a four-day gathering that saw policy U-turns from the government, dire opinion polls and open rebellion from lawmakers who fear the party is doomed to lose the next national election under Truss, who took office just a month ago after winning a party leadership vote.
Truss vowed to stick with her plan to reshape Britain’s economy through tax cuts and deregulation in a bid to end years of sluggish growth. She said cutting taxes was “the right thing to do, morally and economically”.
Truss acknowledged that “these are stormy days” for a country still mourning the death of Queen Elizabeth II and rocked by Russia’s invasion of Ukraine.
“In these tough times, we need to step up. I am determined to get Britain moving, to get us through the tempest and put us on a stronger footing as a nation,” she said, as she vowed to “stand by our Ukrainian friends, however long it takes”.
Seeking an upbeat tone, Truss took the stage to the strains of the 1990s hit Moving on Up.
The founder of the band behind the song, M People, said he was “livid”. Mike Pickering said he hoped Truss looked at the lyrics of the song – “Go and pack your bags and get out.”
The speech was briefly disrupted by two Greenpeace activists who unfurled a banner reading “Who voted for this?” – and were escorted out of the hall to boos from the audience. Truss shrugged it off. “Whenever there is change, there is disruption,” she said.
“Not everyone will be in favour. But everyone will benefit from the result – a growing economy and a better future. That is what we have a clear plan to deliver.”
The pound, which has been on a roller-coaster journey since Truss unveiled her economic proposals last month, fell about one per cent to USD1.136 after the speech.
The currency had hit a record low of USD1.03 soon after Truss announced a stimulus package that includes GBP45 billion (USD50 billion) in tax cuts to be paid for by government borrowing on September 23. The Bank of England was forced to intervene to prop up the bond market and stop a wider economic crisis.
Under political and financial pressure, the government on Monday scrapped the most unpopular part of its budget package: a tax cut on earnings above GBP150,000 pounds a year.
That will save about GBP2 billion, a small share of the government’s GBP45 billion tax-cutting plan.
Most economists say deep public spending cuts will be needed to pay for the rest. The government says it will publish a fully costed fiscal plan, alongside an independent economic forecast, on November 23. Truss defended the chaotic rollout of her economic measures, saying that in extraordinary times.
“It would have been wrong not to have proceeded rapidly with our energy and tax plan,” she said.
Truss argued that her policies will bring economic growth, higher wages and eventually more tax revenue for the government to spend. Critics say the plans do little to help millions of people who are struggling right now with a cost-of-living crisis fueled by soaring energy prices.
Truss insisted she is committed to supporting the most vulnerable, pointing to a cap on energy prices that took effect on October 1.
But she has refused to promise that benefits and state pensions will increase in line with inflation, which has been the practice for years.
That has alarmed some Conservative lawmakers, who say it amounts to penalising the poor while giving tax cuts to the better-off. Several said during the conference that they would not vote for the measure.
Former prime minister Gordon Brown, from the Labour Party, said cutting benefits would provoke “a national uprising”.
Truss said “the status quo is not an option” and she would “stay the course.” But uniting her party will be a tough task.
