Salfordians have expressed their concerns over the U-turn to scrap the 45p tax rate.
The plan was originally announced only 10 days ago by Chancellor of the Exchequer Kwasi Kwarteng.
The original plan Liz Truss’s government set out triggered a sharp fall in the pound to its lowest level since 1985.
Maria Paola Rana, lecturer in Economics at Salford University, said: “Clearly the U-turn means that the government will not have to borrow to finance the tax cuts for those who earn £150,000 a year and over. This tax cut surely would have not helped economic growth.”
She added: “The government has immediately lost its credibility with the so-called mini-budget and the proposed unfunded tax cut for the higher earners.
“The UK economy has faced a potential financial crisis due to a budget, the first time in the history of the UK.
“The value of the pound tumbled to record low, S&P have downgraded the UK economic outlook from stable to uncertain, although the credit rating has not been downgraded, yields on government bonds have increased and price of the same have decreased so dramatically that the Bank of England had to intervene in order to buy them and save pension funds.”
The plan, last week’s mini-budget set out would have seen the lowering of income tax for the highest band of earners (above £150,000 salary).
This sparked an extreme public backlash, forcing the new Chancellor to respond, stating: “We get it, and we have listened.”
Labour MP for Salford and Eccles, Rebecca Long-Bailey spoke out this morning on social media against the government’s actions and ensuing turmoil.
She wrote on Twitter: “The 45p tax cut u-turn is a tiny speck in the £45bn package of tax cut chaos. It won’t help anyone affected by the catastrophic damage already. This is a total shambles. We need a recall of Parliament and we need a General Election urgently.”
The 45p tax cut u-turn is a tiny speck in the 45bn package of tax cut chaos. It won’t help anyone affected by the catastrophic damage already. This is a total shambles. We need a recall of Parliament and we need a General Election urgently. https://t.co/y4nnGyH3ku
— Rebecca Long-Bailey (@RLong_Bailey) October 3, 2022
The people of Salford also gave their opinions on this mornings government action.
Student, George Barnes highlighted the government’s lack of preparation from the new government. He said: “This government has come in really unprepared and I’m glad they’ve seen the error in the decision.
“We were looking at a really bad couple of months with the drop in the pound.”
The decision has left supporters of the Tory party doubtful over the competence of the new cabinet.
Another Salfordian said: “It’s disgusting I don’t think they know what they’re doing…I’ve supported this government up until now.”
Another resident raised his concerns saying: “Clearly an embarrassing U-turn by the Tory government…I’m surprised they’ve actually taken public opinion into account.
“They showed their true colours because all they care about is giving more money to rich people and taking it away from poor people…If they went ahead with it, it would of been another catalyst for them being thrown out of government at the next election.”
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