Liz Truss urges world leaders to follow UK with trickle down economy | liz truss

Liz Truss will urge world leaders to join Britain in introducing far-reaching tax cuts despite US President Joe Biden disparaging “leakage economics” ahead of their first bilateral talks in New York.

In a speech to the United Nations on Wednesday, the prime minister will argue that the free world must prioritize economic growth to deny authoritarian states like Russia the opportunity to manipulate the global economy.

Yet her embrace of Reagan economic policy puts her on a collision course with the Democratic president, who tweeted yesterday that he was “sick and tired” of the approach, which he said had never worked.

In his latest break with Treasury orthodoxy, Truss on Tuesday promised to review all tax rates to help struggling households and businesses weather the cost-of-living crisis. The prime minister’s comments pave the way for a sweeping overhaul of the system that could include revising income tax brackets and come amid reports she is planning a stamp duty cut as part of her mini-budget. emergency on Friday.

In an interview at the top of the Empire State Building on Tuesday, he told the BBC: “We have to make tough decisions to make our economy work well. We have to look at our tax rates. Therefore, corporate tax must be competitive with other countries so that we can attract that investment”.

She had already signaled that more tax cuts, beyond the changes expected on Friday, could be on the cards. She told reporters on the plane to the US: “Lower taxes lead to economic growth, I have no doubts about that.”

The Times reported that Truss believes reducing the stamp duty, which raises around £12bn a year for the Treasury, would help growth by encouraging more people to move.

Truss’s first talks with Biden come against the backdrop of tensions over post-Brexit trade deals in Northern Ireland. Despite attempts by the UK 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 Brexiters, Truss downplayed expectations that any trade deal was imminent, saying: “There are currently no ongoing negotiations with the US and I have no expectation that they are going to start in the short to medium term.”

US National Security Adviser Jake Sullivan said Biden would use the meeting to “encourage the UK and the European Union to come to a practical outcome that ensures there is no threat to the core principles of the Good Friday deal.” ”.

The two leaders are also at odds over their approaches to achieving growth, with Truss supporting ‘filter-down’ economics during the Tory leadership contest, arguing that it was wrong to view all economic policy through the “lens of redistribution”.

Meanwhile, Biden tweeted: “I’m sick and tired of trickle down economics. It has never worked. We are building an economy from the bottom up and out.”

However, Truss is expected to make his economic case in his opening address to the UN, telling other world leaders: “We want people to keep more of the money they make, because we believe freedom trumps education. We are reforming our economy to move Britain forward once again.

“The free world needs this economic strength and resilience to repel authoritarian aggression and win this new era of strategic competition. We will no longer be strategically dependent on those who seek to weaponize the global economy.’”

In a broadcast round on Tuesday, Truss admitted that his tax-cut plans will initially benefit the wealthy more than the rest of society, but doubled down to reverse a recent increase in national insurance that would benefit the top earners in around £1,800 a year, and the lowest earner around £7.

“I don’t buy this argument that cutting taxes is somehow unfair,” he told Sky News. “What we do know is that people with higher incomes generally pay more taxes, so when taxes are reduced, there is often a disproportionate benefit because those people pay more taxes in the first place.

“We should set our fiscal policy based on what will help our country succeed. What is this economy going to deliver that benefits everyone in our country? What I don’t buy is the idea that tax cuts for businesses don’t help people in general.”

Truss, who is also proposing removing the cap on bankers’ bonuses, said she was prepared to be an unpopular prime minister to introduce measures she believes will grow the economy. “Yes, yes I am,” she said. “What’s important to me is that we grow the British economy.”

Some Conservative MPs believe Chancellor Kwasi Kwarteng could bring forward a year a promise made by his predecessor Rishi Sunak when he was chancellor to cut income tax by 1% from 2024. Business groups expect trade rate changes and VAT cuts to help with the energy crisis, as well as a longer-term review.

Truss dismissed concerns about the pound’s decline and the general state of the economy. “I think Britain’s economic fundamentals are solid,” he said, rejecting claims that interest rates would rise as a result of his approach.

Previously, he said higher energy bills were a price worth paying to ensure the UK’s safety from foreign aggressors, but that the cost should not be passed on to homeowners.

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