PORTLAND: US President Joe Biden on Saturday dubbed right-wing British Prime Minister Liz Truss’s abandoned tax cut reform a “mistake,” as the under-fire Conservative leader headed into crisis talks to thrash out a new budget plan.
Tax cuts were the centerpiece of a radical economic reform program announced by Truss and her now-sacked chancellor of the exchequer, Kwasi Kwarteng.
But they were financed through billions in extra borrowing, causing panic on financial markets at the prospect of higher inflation, which has already left British households in the grip of a cost-of-living crisis.
“I wasn’t the only one that thought it was a mistake,” Biden told reporters during a campaign trip to the Pacific Northwest state of Oregon.
“I think that the idea of cutting taxes on the super-wealthy at a time when… I disagreed with the policy, but that’s up to Great Britain to make that judgment, not me.”
Truss is set to sit down on Sunday with new finance minister Jeremy Hunt, who said she and Kwarteng had erred on September 23 in trying to cut taxes for the highest earners, and tried to “fly blind” in presenting their plan without independent forecasts from the Office for Budget Responsibility.
“There were mistakes,” Hunt acknowledged.
“We will have some very difficult decisions ahead,” Hunt said, warning that “all government departments” face spending curbs including welfare, health and defence.
“And some taxes will not be cut as quickly as people want. Some taxes will go up.”