Sweeping tax cuts in PM’S sights
Northern Ireland Protocol set to dominate PM’S first meeting with president ahead of speech to UN
LIZ TRUSS has suggested further sweeping tax cuts are on the way as she puts economic “freedom” at the heart of her premiership.
Before an address to the United Nations General Assembly in New York this evening, the Prime Minister gave a heavy hint that she would go much further than reversing the rise in National Insurance and cancelling planned corporation tax increases, potentially adding cuts to income tax and VAT.
She told reporters she had “no doubt” that tax cuts promoted economic growth and said she was prepared to be “unpopular” as she went ahead with plans to scrap the cap on bankers’ bonuses in Friday’s mini-budget.
In her address to the UN, Ms Truss will say that allowing people to keep more of their money is vital to liberty across the world.
“The commitment to hope and progress must begin at home – in the lives of every citizen that we serve,” she will say. “We want people to keep more of the money they earn, because we believe that freedom trumps instruction.”
This will put her on a collision course with Joe Biden, with whom she will hold her first official meeting today. The president tweeted: “I am sick and tired of trickle-down economics. It has never worked. We’re building an economy from the bottom up and middle out.”
Yesterday Ms Truss confirmed her intent to scrap the NI rise and planned corporation tax increases. She told the BBC: “I’ll always work to make sure that we are helping those who are struggling.
“That’s why we took the action that we took on energy bills because we didn’t want to see households facing unaffordable bills. And that’s why we’re taking the action on National Insurance, reversing that increase as well.
“So, yes, we do have to take difficult decisions to get our economy right.
“We have to look at our tax rates. Corporation tax needs to be competitive with other countries so that we can attract that investment.”
Speaking to reporters on the plane to New York, Ms Truss said: “Having the highest taxes in 70 years and putting up corporation tax at a time when we’re trying to attract investment to this country isn’t going to deliver growth. We need to be competitive.”
Last night Mark Littlewood, the director general of the Institute of Economic Affairs, said: “I’m expecting a large number of tax cuts. I think we might see the most radical changes in tax and regulatory policy since the 1980s.”
‘There isn’t currently any negotiations with the US and I don’t expect those are going to start in the short to medium term’
LIZ TRUSS has admitted that a trade deal with the US is years away as she prepared to hold her first meeting with Joe Biden amid mounting tensions over Brexit and economic policy.
The Prime Minister will today meet the US president in New York, with discussions about the Northern Ireland Protocol expected to feature heavily.
Later, she will address the United Nations General Assembly on her desire for more countries to cut taxes as a way to promote economic growth.
Ms Truss will tell diplomats that allowing people to keep more of their own money is vital to promote liberty throughout the world. However, in a sign the pair have widely differing economic policy ideas, Mr Biden derided such ideas as “trickle-down economics” saying that they “never work”.
That came a day after Ms Truss tried to head off a row over the Northern Ireland Protocol on post-brexit trade by admitting she did not believe Britain will begin talks with Washington on a trade deal for years.
She told reporters there was no prospect of negotiations on a free trade agreement with the United States in the “short or medium term”.
Some US figures have suggested Washington will not countenance a trade deal with the UK if Britain tears up the Northern Ireland Protocol in the Brexit agreement.
The White House said yesterday that as well as discussing the two countries’ bilateral economic relationship, Mr Biden will bring up the Protocol at today’s meeting.
A spokesman said the US president “will encourage the UK and the European Union to work out a practical outcome that ensures there is no threat to the fundamental principles of the Good Friday [peace] agreement”.
The meeting will take place just two days after Mr Biden attended the state funeral of Queen Elizabeth II in London.
Ms Truss also met Emmanuel Macron, the French president, yesterday, but the pair did not discuss the Protocol.
Her outspoken comments on the prospect of a trade deal will be seen as a huge disappointment for many Brexit supporters, who believed leaving the EU would open the door to a series of lucrative global trade deals.
Ms Truss’s comments are designed to highlight the Government’s belief that US threats on trade are idle, because no trade deal is in the offing anyway.
She told reporters on the plane to New York that she was concentrating on reaching trade deals with India and countries in the Pacific.
Asked about the meeting with Mr Biden, Ms Truss said: “The No 1 issue is global security and making sure that we are able to collectively deal with Russian aggression and ensuring that Ukraine prevails and that [Vladimir] Putin doesn’t have success in Ukraine.
That is a huge priority for European security as well as ensuring that we are working together with other members of the G7 to make sure we are not strategically dependent on authoritarian regimes.”
Ms Truss said her priorities were to join the Comprehensive and Progressive Agreement for Trans-pacific Partnership (CPTPP), a multilateral trade agreement that includes Australia, Canada, Japan, Mexico, New Zealand as well as six other countries.
She also said she wanted to reach an agreement with the Gulf Cooperation Council of Arab states.
“In terms of trade: I mentioned earlier getting CPTPP accession, getting a trade deal with India, getting a trade deal with the GCC,” she said. “Those are our trade priorities.
“There isn’t currently any negotiations taking place with the US and I don’t have an expectation that those are going to start in the short to medium term,” she added.
Asked what she meant by short to medium term, Ms Truss said: “As I said, my priority is the CPTTP, India and also working on the GCC.”
Earlier this month, Washington warned Ms Truss against dismantling the Northern Ireland Protocol, which was signed by Boris Johnson.
Discussing the Prime Minister’s first telephone conversation with Mr Biden, a spokeswoman for the White House said: “There’s no formal linkage on trade talks between the US and the UK and the Northern Ireland Protocol, as we have said.
“But efforts to undo the Protocol would not create a conducive environment, and that’s basically where we are.”
A former senior White House official told The Daily Telegraph that the Northern Ireland Protocol will be “high on the agenda” as Mr Biden seeks to address the “elephant in the room”.
He said it was a “good move” by Ms Truss to take the prospect of a trade deal, which has long been considered unrealistic in Washington, out of the equation before meeting the president.
The former official, who worked with Mr Biden and is in touch with members of his current team, said: “It’s important for the Prime Minister and her advisers to know there are issues the president sees through a pragmatic lens, and others [including Northern Ireland] through a deeply personal lens.
“You don’t want to get the latter wrong.”
The former official added: “It will be high up the agenda. It’s a priority for the president. Quite frankly, it’s the elephant in the room that has to be addressed.
“It goes to the confidence and closeness in the special relationship. He does not want to be the president that saw a new hard border erected.”
Ms Truss was right to “recalibrate” prospects of a trade deal, the former official said.
“It recognises the very remote possibility that can happen. You’ve got to diffuse the expectation you created, and the danger that causes for your government,” he said. “You don’t want to go into office and come up short.
“In general, the prospect of a trade deal is pretty distant and remote.”