UK Trust says it will cut taxes despite economic crisis | National news

By JILL LAWLESS – Associated Press

NEW YORK (AP) — British Prime Minister Liz Truss said Tuesday she is willing to take “unpopular decisions” such as increasing bonuses for wealthy bankers to get the country’s weak economy growing.

Speaking before the government’s emergency budget statement on Friday, Truss said tax cuts were key to spurring economic growth, even if they benefited the wealthiest more than the poorest.

“We need to make tough decisions to get our economy right,” Truss said. “We need to look at our tax rates. So the corporate tax has to be competitive with other countries so that we can attract that investment.”

Tras, who was prime minister for only two weeks – a period that remained in the shadows death of Queen Elizabeth II — faces immediate pressure to deliver on his promises to tackle a cost of living crisis Britain and an economy heading into a potentially long recession.

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It has already announced a cap on household electricity bills, meaning average heating and electricity costs will be no more than £2,500 ($2,872) a year – far less than predicted. And she says businesses will learn the details of such relief on Friday.

But Truss has ruled out extending the windfall tax on oil and gas companies, introduced under Boris Johnson’s previous government, and is scrapping plans to increase corporation tax.

Critics say her free-market, low-tax economic views, inspired by the likes of Margaret Thatcher and Ronald Reagan, are the wrong response to the crisis.

Truss, who is in New York to attend the UN General Assembly, confirmed that the budget statement would reverse an income tax hike introduced this year to help fund health care and reverse a plan to raise corporate tax.

She also made it clear the government would lift a cap on bankers’ bonuses introduced after the 2008 global financial crisis in a bid to attract more jobs and money to London’s financial district.

“I don’t buy that argument that the tax cuts are somehow unfair,” Truss told British broadcasters in an interview on the 102nd floor of the Empire State Building.

“We have to build our tax policy based on what will help our country to be successful — what will produce an economy that will benefit everyone in our country. I don’t buy the idea that cutting taxes for businesses doesn’t help people in general.”

Truss denied her plans would damage Britain’s already battered economy. The pound sterling fell to a near four-decade low against the dollar to around $1.14. She said her priority was to get “the economic fundamentals right”.

She admitted that the UK was facing “incredibly difficult” economic times Russia’s invasion of Ukrainewhich led to a sharp rise in global energy prices.

But she denied that her plans would hurt millions and ordinary Britons and could prove disastrous for the election.

“I think working people will judge me and my government at the next election: did I get a good job, did my wages go up, did I see improvements in my city?” she said. “It’s something people care about, and I believe people will vote for it.”

During her talk, and seemingly coincidentally, US President Joe Biden tweeted criticism of Truss’s economic policies. The leaders of the two countries will meet on Wednesday on the sidelines of the UN summit.

“I’m fed up with the leaky economy. It never worked,” he said.

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