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London
Less than 10 days after taking a U-turn on her 45 per cent tax cut proposal for the rich, UK Prime Minister Liz Truss is expected to announce another volta face, per a report by The Guardian.
According to the publication, the Tory leader has received a not-so-welcome response from her colleagues and party leaders regarding her plan of uprating welfare payments in line with earnings rather than inflation.
Plans to oust Truss have been discussed amongst the MPs if she continues to persist with her 'hara-kiri' policy.
Penny Mordaunt, currently in Truss' cabinet has already said that benefits should rise in line with inflation. Damian Green, part of the party's centrist faction, said he doubted any real-terms cut would pass a parliamentary vote.
WATCH | UK economy | Liz Truss' U-Turn on 45% tax cut for the rich
Truss, under her largely unfunded financial tax cut plan, is looking to find avenues to save money for the exchequer. Under her proposed plan, the benefits will rise in line with earnings which comes to around 5.5 per cent rather than in correspondence with the inflation percentage.
The September inflation figure stood at 10 per cent which effectively means that the poor will be losing money under the scheme.
Research has shown that if Truss goes through with her plan, as many as 450,000 could be pushed into poverty.
As prices of energy and housing continue to soar, uprating benefits by only 5.5 per cent will result in a 7.7 per cent loss in disposable income on average. The move would effectively leave poorer households $437 a year worse off on average.
Earlier, the UK government was forced to abandon its plan to abolish the 45 per cent top rate of income tax. The humiliating U-turn was necessitated days after announcing the policy change and on the back of a turbulent reaction from the markets as well as the conservative party.
As reported by WION, such has been the financial crunch in the UK that the country may need to cut as many as 200,000 government jobs in the next two years to avoid saddling the exchequer with billions in debt.
Read more: Liz Truss government may have to cut 200,000 jobs to stay afloat: Report
(With inputs from agencies)
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