Kwasi Kwarteng on Monday made a u-turn on a proposal to give a tax cut to the rich, saying "we get it, and we have listened."
The UK Conservative party government has “inflicted lasting damage upon itself” and its moral reputation over its proposal to cut the 45% tax rate for the UK’s wealthiest earners, according to political scientist Professor Rainbow Murray.
Chancellor Kwasi Kwarteng on Monday made a u-turn on his proposal, which was outlined in the new government’s so-called mini-budget. The inclusion of a tax cut for the rich was hugely unpopular across the UK and sent the UK markets spiralling into turmoil.
“It was ill-advised. It didn't provide sufficient consultation beforehand, and it resulted in a huge economic shock wave that led to the sterling being devalued and interest rates soaring,” said Murray, at Queen Mary University in London.
Criticism came from all corners of the country – from the opposition party Labour, to even Conservative backbench MPs. The decision however to pull a one-eighty on the proposal has not saved Liz Truss’ government’s reputation.
“There are two crucial areas in which the government has inflicted lasting damage upon itself. The first is in terms of its moral reputation. A lot of people saw this as simply unethical to give a tax break to the richest at a time when people are suffering from an acute cost of living crisis,” Murray said.
“And the other, perhaps even more damaging, is that the government has lost its reputation for economic competence. People no longer trust that the government knows what it's doing in terms of running the economy.”
Support for Labour is on the rise
The pressure is now mounting on prime minister Liz Truss and her cabinet. According to a recent YouGov poll, 51% of all Britons saying Truss should resign – with 36% of conservative voters calling for resignation.
The Labour Party on the other hand are seeing growing popularity. Leader Keir Starmer last week slated the Conservative’s mini-budget – accusing them of losing control of the economy. Labour has recently enjoyed a bounce of 17 points in opinion polls, at the expense of the Conservatives.
“We have seen people turning away from the Conservative Party who are natural conservative voters and some of them will come back over the next two years, but I don't think enough of them will” Murray concluded.
Watch Rainbow Murray's interview with Euronews in the player above.