Truss is ready to be unpopular
LIZ TRUSS said yesterday that she is willing to be an unpopular Prime Minister to bring in measures she believes will grow the economy, as she admitted her tax cuts will disproportionately benefit the rich.
The new Tory leader also effectively confirmed a plan to scrap the cap on bankers’ bonuses as she argued she needs to make “difficult decisions” under her gamble to go for growth but, as she was speaking, United States President Joe Biden issued criticism of the type of economic policy she was advocating – a day ahead of their meeting at a United Nations summit in New York City.
“I am sick and tired of trickledown economics. It has never worked,” the president wrote on Twitter. While Mr Biden’s message was surely aimed at a domestic audience, it underlined the differences between the two leaders’ stances, just as Ms Truss says she wants to foster closer ties with international allies.
Ms Truss was asked during a round of broadcast interviews at the Empire State Building if she is prepared to be unpopular. “Yes. Yes, I am,” she replied, to Sky News. “What is important to me is we grow the British economy because that’s what will ultimately deliver higher wages, more investment in towns and cities across the country. That’s what will deliver more money to people’s pockets.
“In order to get that economic growth, Britain has to be competitive. If we put up taxes, if we have arbitrary taxes on energy companies, if we have high corporation tax, we’re not going to get that investment and growth.”
The Prime Minister insisted the cost to the taxpayer of her energy package, being paid for by borrowing rather than a windfall tax on the profits of energy firms, is “not what has been projected”, with estimates as high as £150 billion.
The Resolution Foundation think tank has said Ms Truss’s tax plans and energy support will see Britain’s richest households getting twice as much support with living costs as the poorest households. Ms Truss accepted that the benefits would fall in favour of the rich – at least initially – but rejected claims of unfairness as she bet on growth trickling down to the rest of society.
“I don’t accept this argument that cutting taxes is somehow unfair,” she told Sky News. “What we know is people on higher incomes generally pay more tax so when you reduce taxes there is often a disproportionate benefit because those people are paying more taxes in the first place.
“We should be setting our tax policy on the basis of what is going to help our country become successful. What is going to deliver that economy that benefits everybody in our country.”
With Ms Truss anticipating a general election in 2024, she is gambling that benefits will come from potentially unpopular policies, such as that on bankers’ bonuses. She said the priorities of voters will be issues such as job opportunity, investment, high street improvement, road building and phone signals at the next general election.