Amid soaring inflation, a slumping economy, and a flagging value for the pound sterling, the Prime Minister of the United Kingdom, Liz Truss, is working to find a panacea that will revive the nation.
Freezing of energy bills, tax cuts, but also hardening of social minima and deregulation: On Friday, London will unveil a cocktail of measures to stimulate growth and reduce inflation. These measures could have severe repercussions on the public finances. With inflation close to 10% and at a 40-year high, an economy heading into recession, and a depressed pound, the government of new Prime Minister Liz Truss is hoping to administer a revitalizing potion to households as well as businesses alike.
In a statement that was released during the overnight hours between Thursday and Friday by the Treasury, it is stated that the primary objective of this administration is to “Fuel growth by lowering taxes and eliminating regulation.” “This is how we will reverse the vicious circle of stagnation” economic, and “we will boldly and shamelessly pursue growth, even when it means making tough decisions,” insinuates Chancellor of the Exchequer Kwasi Kwarteng, who will unveil his measures in Parliament beginning at 08:30 GMT. Kwarteng will present his proposals in the House of Commons.
The United Kingdom is in the midst of a purchasing power crisis, and the flagship measure of the “mini-budget,” as it is dubbed, will freeze energy bills for two years, at £2,500 for an average household, along with a government-funded rebate of £1,000. This measure will take effect on April 1, 2019. In an effort not to be outdone, businesses will have approximately half of their monthly bills covered for the next six months. Since the beginning of the conflict in Ukraine, gas, and electricity prices have skyrocketed due to the restricted supply of hydrocarbons coming from Russia as a result of the conflict. In contrast to countries such as France, which relies primarily on nuclear power, the United Kingdom is heavily reliant on gas as its primary source of energy.
The pioneers of deregulation in the wake of Brexit
In addition to this massive support for energy bills, which was advocated by the Labor opposition and is expected to cost tens of billions of pounds, the Truss government's cocktail of measures includes a healthy dose of Tory prized revenue, including cuts of taxes. This massive support for energy bills was advocated by the Labor opposition. The reduction of social security contributions, known as the “social levy,” has been confirmed for both companies and households, an action that has been applauded in particular by the British Chambers of Commerce. In addition, certain ecological levies will no longer be collected. According to reports in the British press, the Truss government also has plans to reduce the tax that is levied on transactions involving real estate.
In New York, where she was attending the United Nations General Assembly, the Prime Minister acknowledged that all of these measures will above all favor the wealthiest, and she did so on the same day that the Vice President of the United States criticized “trickle-down economics.” The trickle-down economy, which is supposed to fall from the richest to all layers of the population, is referred to as “trickle-down economics.”
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Another catchphrase: Chancellor of the Exchequer Kwasi Kwarteng takes great satisfaction in advocating for policies that will “get Britain back to work.” While the British labor market is experiencing a severe shortage of workers, which is hurting almost every sector of the economy, the Treasury has announced that access to minimum income (also known as “universal credit”) will henceforth be accompanied by obligations for certain individuals who work fewer than 15 hours per week. This could include the fact that those over the age of 50 “apply for a job, participate in job interviews,” adds the Treasury, which also wants to encourage those over the age of 50 to return to the labor market, from which they have been absent in large proportions since the pandemic, in particular, due to prolonged illnesses.
Kwasi Kwarteng and Liz Truss want to appear as heralds of post-Brexit deregulation to attract investment in the United Kingdom, particularly in the financial sector of the City. This is part of their strategy to attract investment in the United Kingdom. According to Jacob Rees-Mogg, the Minister for Energy, Business and Industry, the British government “wants to end all laws emanating from the European Union by December 31, 2023, as part of a new post-Brexit freedoms law.” This law was tabled in Parliament on Thursday and is intended to “eliminate unnecessary bureaucracy.” The law was intended to “end all laws emanating from the European Union.” According to the British press, London is particularly interested in getting rid of the restrictions on City bonuses that were handed down from the EU, as well as a tax on sugary drinks that was designed to combat obesity.
In conclusion, the Treasury intends to establish 38 “investment” deregulated zones, which will be similar to the free ports project that the previous Conservative government was working on.