October 3, 2022
Liz Truss vows to take ‘vested interests’ and boost UK economic growth

Liz Truss has given her strongest indication that she will eliminate the cap on bankers’ bonuses, saying she was ready to take on “vested interests” in pursuit of higher economic growth.

Britain’s prime minister said on Tuesday that he and his chancellor Quasi Quarteng are ready to argue for controversial policies because “it is about increasing the size of the pie”.

Quarteng will present a tax-cutting mini-budget on Friday with a focus on policies that he claims will push Britain’s growth rate to a pre-financial crash level of 2.5 per cent annually.

Truss declined to discuss plans to eliminate the EU cap on bankers’ bonuses – which is limited to twice the annual salary – but its allies confirmed a Financial Times report last week that an announcement was imminent.

Speaking later on Tuesday, Truss confirmed that Friday’s financial event would reverse the increase in national insurance and the planned increase in corporation tax announced by former chancellor Rishi Sunak.

She told the BBC: “I will always work to make sure we are helping those who are struggling . . . so we are going to act on National Insurance to reverse that growth.”

“We have to look at all the tax rates. So there is a need to make corporation tax competitive with other countries so that we can attract that investment.

However, Truss acknowledged that his tax-cutting plans would initially benefit the wealthy more than the rest of society.

“I don’t accept the argument that the tax cuts are unfair in any way,” she told Sky News. “What we do know is that people with higher incomes generally pay more taxes, so when you reduce taxes there is often a disproportionate benefit because those people are paying more tax in the first place. “

Asked if he was prepared to be unpopular, Truss said: “Yes. Yes I am.”

She continued: “What’s important to me is that we grow the British economy because that will ultimately provide higher wages, more investment in towns and cities across the country. That will ultimately put more money in people’s pockets.

Labor strategists could hardly believe that the new government was considering banning bankers’ wages as one of its first economic acts. But they are aware that the Truss will try to label the opposition party as “anti-development”.

Quarteng will give more details on Friday about how the government’s plan to limit average annual household energy bills to £2,500 will be funded. Business Secretary Jacob Rees-Mogg is expected to provide more details on a similar plan for companies on Wednesday.

Truss said that although the government would protect people and businesses from rising energy prices, the West was faced with tough choices because “we cannot risk our security for the sake of cheap energy”.

Speaking to reporters ahead of his first foreign trip as prime minister, Truss said: “The Western world has become dependent on authoritarian regimes not only for our energy supply but also for other important minerals and other goods.”

She said breaking Britain’s reliance on authoritarian rule “is a price to pay because our long-term security is paramount”.

Truss claimed that the government’s decision to cap the bills would cut headline inflation by up to 5 percent, adding: “Of course, economic growth would be higher than this if we had not acted because it would have had a weakening effect on the economy.”

Truss was forced to put a halt to politics during the 10 days of national mourning following the death of Queen Elizabeth.

He praised civil servants, the royal household and the armed forces for overseeing the widely acclaimed ceremonial events that marked “this very important moment in the history of our country”.

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