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 chance to manipulate the global economy. But her embrace of Reaganite economic policies puts her on a collision course with the Democratic president, who tweeted yesterday that he was “sick and tired” of the approach, which he claimed never worked. In its latest break from Treasury orthodoxy, the Trust promised on Tuesday to review all tax rates to help households and businesses facing the cost of living crisis. The prime minister’s remarks pave the way for a radical overhaul of the system that could include overhauling income tax frameworks and amid reports she plans to cut stamp duty as part of her emergency mini-budget on Friday. In an interview atop the Empire State Building on Tuesday, he told the BBC: “We have to make tough decisions to fix our economy. 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.” He had already signaled that further tax cuts could be on the cards, beyond the changes expected on Friday. He told reporters on the plane to the US: “Lower taxes lead to economic growth, I have no doubt about that.” The Times reported that Truss believed that cutting stamp duty – which raises around £12bn a year for the Treasury – would help growth by encouraging more people to move Truss’ first talks with Biden come against a backdrop of tensions over post-Brexit trade arrangements in Northern Ireland. Despite UK efforts 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 no negotiations with the US at the moment and I have no expectation that they will start any time soon. medium term”. US national security adviser Jake Sullivan said Biden would use the meeting to “encourage the UK and the European Union to find a practical outcome that ensures there is no threat to the fundamental principles of the Good Friday Agreement”. The two leaders are also at odds over their approaches to delivering growth, with Truss championing the economy during the Tory leadership contest, arguing that it was wrong to see all economic policy through the “lens of redistribution”. . Biden, meanwhile, tweeted: “I am sick and tired of the financial crisis. It has never worked. We are building an economy from the bottom up and from the middle out.” However, Truss is expected to back her economic position in her keynote speech at the UN, telling fellow world leaders: “We want people to keep more of the money they earn because we believe that freedom trumps teaching. We are reforming our economy to get Britain moving again. “The free world needs this economic strength and resilience to push back 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 on Tuesday, Truss admitted the tax cut plans would initially benefit the rich more than the rest of society, but doubled down by reversing a recent rise in national insurance would benefit top earners by around £1,800 a year. with the lowest incomes by around £7. “I don’t buy that argument that the tax cut is somehow unfair,” he told Sky News. “What we know is that people with higher incomes generally pay more taxes, so when you cut taxes there is often a disproportionate benefit because those people pay more taxes to begin with. “We should set our tax policy on the basis of what will help our country become successful. What will this economy provide that benefits everyone in our country. What I don’t accept is the idea that tax cuts for business don’t help people in general.” Truss, who is also proposing to scrap the cap on bankers’ bonuses, said she was prepared to become an unpopular prime minister to take measures she believes will grow the economy. “Yes, yes I am,” he said. “What’s important to me is that we grow the British economy.” Some Tory MPs believe Chancellor Kwasi Kwarteng could bring forward by a year his predecessor Rishi Sunak’s pledge when he was chancellor to cut income tax by 1% from 2024. Business groups expect changes to business rates and cuts to VAT to help with the energy crisis, as well as a longer-term review. Truss brushed aside concerns about the falling pound and the general state of the economy. “I think Britain’s economic fundamentals are strong,” she said, rejecting claims that interest rates would rise as a result of her approach. Earlier, he said higher energy bills were a price worth paying to guarantee the UK’s safety from foreign attackers, but the cost should not be passed on to landlords.
