Liz Truss urges world leaders to join Britain in introducing far-reaching tax cuts despite US President Joe Biden He poured scorn on the “downstream economy” before their first bilateral talks in New York.
in a letter to United nations On Wednesday, the prime minister will argue that the free world must prioritize economic growth to deny authoritarian countries like Russia the opportunity to manipulate the global economy.
However, her adoption of Reagan’s economic policy puts her on a collision course with the Democratic president who tweeted yesterday that he was “sick and tired” of this approach, which he claimed never worked.
In her latest break from Treasury doctrine, Truss on Tuesday pledged to review all tax rates to help struggling families and businesses during the cost of living crisis. The prime minister’s comments pave the way for a radical overhaul of the system that could include looking again at income tax categories and come amid reports that it plans to cut stamp duties as part of its emergency mini budget on Friday.
In an interview at the top of the Empire State Building on Tuesday, she told the BBC: “We have to make tough decisions to reform our economy. We have to look at our tax rates. So corporate tax has to be competitive with other countries so we can attract that investment.” .
It had already indicated that more tax cuts, other than changes expected on Friday, might be on the table. “Lower taxes lead to economic growth, there’s no doubt about that in my mind,” she told reporters on the plane to the United States.
The Times reports that Truss believes lowering the stamp duty – which raises around £12 billion a year for the treasury – would help growth by encouraging more people to relocate.
Truss’ first talks with Biden come against the backdrop of tensions over post-Brexit trading arrangements in Northern Ireland. Despite UK attempts to separate the issues, the Biden administration has warned that a free trade deal is unlikely until the dispute over the Northern Ireland Protocol is resolved.
In a move likely to disappoint Brexit supporters, Truss downplayed expectations that any trade agreement was imminent, saying: “There are currently no negotiations going on with the United States and I have no expectation that those negotiations will begin so soon. medium range”.
US National Security Adviser Jake Sullivan said Biden would use the meeting to “encourage the UK and the EU to reach a workable outcome that ensures there is no threat to the fundamental principles of the Good Friday Agreement”.
The two leaders also differ on their approach to growth, supporting Gears of “sneak-down” economics during the Tory leadership contest, arguing that it was a mistake to view all economic policies through a “redistributive lens”.
Meanwhile, Biden tweeted: “I’m sick and tired of the tiered economy. It never worked. We’re building an economy from the bottom up and in the middle.”
However, Truss is expected to discuss her economic case in her keynote address to the United Nations, telling fellow world leaders: “We want people to keep more of the money they earn, because we believe freedom trumps instruction. We reform our economy to push Britain into forward again.
The free world needs this economic strength and resilience to counter authoritarian aggression and win this new era of strategic competition. We will no longer rely strategically on those who seek to arm the global economy.”
On a radio tour on Tuesday, Truss admitted her plans to cut taxes would benefit the rich initially more than the rest of society, but doubled down on reversing the recent rise in National Insurance would benefit higher earners around £1,800 a year, and the lowest earning around £7.
“I don’t accept this argument that tax cuts are somehow unfair,” she told Sky News. “What we do know is that people with higher incomes generally pay more taxes, so when you reduce taxes there is often a disproportionate benefit because those people pay more taxes in the first place.
We must base our tax policy on what will help our country succeed. What will bring about this economy that will benefit everyone in our country. What I don’t accept is the idea that corporate tax cuts don’t help people in general.”
Truss, who also suggests Canceling the maximum limit for bankers’ bonusesShe said she was ready to be an unpopular prime minister to take measures that she believed would grow the economy. “Yes, yes I am,” she said. “What matters to me is that we grow the British economy.”
Some Conservative MPs believe Chancellor Kwasi Quarting could deliver for a year the pledge made by his predecessor Rishi Sunak when he was Chancellor to cut income tax by 1% from 2024. Business groups expect changes to business rates and a value-added tax cut to help with that. Energy crisis, as well as a long-term review.
Truss dismissed concerns about a falling pound and the general state of the economy. “I think Britain’s economic fundamentals are strong,” she said, dismissing claims that interest rates would rise as a result of her approach.
Earlier, she said high energy bills were a price worth paying to ensure the UK’s security from foreign aggressors, but that the cost should not be passed on to homeowners.