Attempts by the International Monetary Fund (IMF) to persuade Prime Minister Liz Truss to reconsider scrapping the top rate of income tax amount to “blatant political meddling,” according to a prominent Brexiteer.
Former Brexit Party MEP Ben Habib also accused the IMF of being a “stooge for the EU” bent on undermining Ms Truss following its unprecedented intervention, which he admitted left him “gobsmacked.”
The Washington, DC-based organisation said in a statement issued yesterday following Chancellor Kwasi Kwarteng’s mini-budget that it was “closely monitoring recent economic developments in the UK and are engaged with the authorities.”
It stated that Mr Kwarteng’s planned announcement in November when he will present his new “fiscal plan,” would “provide an early opportunity for the UK Government to consider ways to provide more targeted support and reevaluate tax measures, particularly those that benefit high-income earners.”
Mr Kwarteng’s controversial decision to eliminate the 45 per cent rate of income tax paid by people earning more than £150,000 per year has sparked widespread criticism – but Mr Habib, also chief executive of property investment firm First Property Group, believes the financial hit to the UK economy is merely a “rounding error.”
Mr Habib said: “It is blatant political meddling. The IMF is a stooge for the EU – it fears Truss and is seeking to undermine her premiership.
“The cut to the top income tax rate from 45 per cent to 40 per cent may have been politically naive but was neither here nor there in the overall scheme of things.
“Its cost will be some £2 billion a year. That is dwarfed by the potential cost of £150billion to cap fuel bills.
“So I was gobsmacked to see the IMF take our government to task over that cut. It did not challenge the government’s overall economic approach; it focused only on the higher tax rate. Their intervention was entirely political, not economic.”
He closed: “The IMF, like the EU and many other supranational institutions, holds that principle in contempt. They do not trust people to make the right decisions. They think they know better.”