Tax Cuts Benefit Everyone by Making UK Economy More Competitive: UK Prime Minister

Prime Minister Liz Truss speaks to journalists at the Empire State Building in New York, on Sept. 20, 2022. (Toby Melville/PA Media)

UK Prime Minister Liz Truss has said her tax-cutting plans will make the UK economy more successful and benefit the population in general.

Talking to journalists from the Empire State Building in New York on Sept. 20, Truss confirmed that she will be reversing the national insurance hike and axing the planned corporation tax rise that were the policies of former Prime Minister Boris Johnson’s administration.

In an interview with Sky News, she said she does not accept the argument that cutting taxes is “unfair” because it mostly benefits the rich.

She said: “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,” she said, adding: “What I don’t accept is the idea that tax cuts for business don’t help people in general.”

Bankers’ Bonuses

In her media interviews, Truss also effectively confirmed a plan to scrap the cap on bankers’ bonuses as part of the post-Brexit shake-up of financial rules.

Asked by the BBC about allowing bankers to get bigger bonuses while many people were struggling to pay their energy bills, the prime minister said she was “absolutely prepared” to take “difficult decisions” to make the UK economy more competitive.

“What I want to see is a growing economy,” she said.

“If that means taking difficult decisions which are going to help Britain become more competitive, help Britain become more attractive, help more investment flow into our country, yes, I’m absolutely prepared to make those decisions.”

‘Trickle-Down Economics’

As she was speaking, U.S. President Joe Biden criticised the type of economic policy she was advocating.

“I am sick and tired of trickle-down economics. It has never worked,” he wrote on Twitter.

While his criticism was surely for a domestic audience, it underlined the differences between the two leaders’ economic policies.

The prime minister’s official spokesman said it would be “ludicrous” to suggest President Biden was criticising Truss’s economic strategy in his social media post, just a day before the duo were set to hold talks on the sidelines of a United Nations summit.

The world’s democracies are “not prescriptive” in how they achieve economic growth, the spokesman said.

PA Media contributed to this report.