When Liz Truss was in the running for leader of the Conservative Party and our next prime minister, some of her colleagues worried that, as Prime Minister Johnson’s election anointed, she would be Boris Johnson’s successor candidate.
They could not be more unfair on the financial side.
Since He became prime minister two weeks agoMs Truss drew a clearer ideological divide between her Conservative Party and the Labor Party than we have seen under three Conservative prime ministers.
Taxpayer promises and protections for big business cuts promised in the race to be a Conservative leader are not, after all, politically expedient plans to win over the hearts and minds of the Conservative Party, if not the wider public.
There are policies that he intends to follow through as prime minister. He said in the leadership race that he wants to be a candidate for change and that he will turn the tax and spend agreement when we have lived, to a greater or lesser extent, with the New Labor era at his head.
No lapse tax on industry companies’ £170bn excess profits, her energy price guarantors instead of paying through the government a loan that will ultimately be repaid by the taxpayer: the rise of a university fund for big business, and the scrapping of national insurance for those on the highest and lowest incomes, by removing the banking cap. ‘Goods and an energy package that benefits the wealthiest rather than those who really need it.
There is a paradigm shift in government approach, from economic planning to the redistribution of wealth through the tax system from those with the highest pockets to those who need it most, to a new approach in which promoting growth is the key to targeting public services and. helping everyone.
In our first interview with the new prime minister on the 102nd floor of the State Government Building, he made it clear that the interests of the growth plans were above all else.
When I asked the prime minister whether his tax-cutting plans – a big boost to big businesses and wealthier workers – were fair, he told me: “I don’t accept the argument that cutting taxes is somehow unfair.
“What we know is that people on higher incomes generally pay more. So when they cut taxes, it’s often a disproportionate benefit to those who pay more in taxes in the first place.
“We need to base our tax plan on what is going to make our country the most successful, what is going to deliver in this economy that benefits everyone in this country.
“And what I don’t accept is the idea that what happens in business taxes don’t help people in general.”
And when Ms Truss sent it, ready to be the unpopular prime minister to pursue this goal, she said: “Yes, I am. It’s important to me that we grow the British economy because that’s what will ultimately deliver higher wages, more in towns and cities it will be invested across the country, which is what will ultimately put more money into people’s pockets, and also provide services such as the national health service, and to achieve that. economic growth, Britain must be competitive.”
Tax cutting plans carry enormous risk
His plans carry enormous political and economic risks. Politically, Ms Truss is prepared to cut taxes for those who need it least and pay for it through government borrowing to achieve growth.
His argument is that the public cares more about better services, better jobs, better infrastructure than about the equity of equality in which the state taxes its citizens and businesses.
It follows that principle that raises the rising tide in all of us – but what if that growth fails? And what if British workers don’t feel much like tax cuts are unfair, when they already express what they feel is fine?
When I put it to the prime minister that voters don’t think it’s fair to end up taking away their children from a bill to fund government-debt-backed tax cuts on big business or energy savings plans, he gave me short shrift: .
“What I’m saying is that by keeping taxes low and growing the economy, we’re going to get more revenue, and actually, what’s going to happen in the long run is the opportunities that people want to see.”
The ideological lines of red versus blue clearly drawn by the prime minister, in reality this view is not necessarily partisan.
More than two in three Britons believe that tax is a waste of time for industrial companies. So these are not so divided by politicians towards left and right, it is more about the public opinion of the vote to approach taxation and in this it is clear that Ms. Truss is ready to divide on the wrong side of that populist.
In the end, she believes voters will bring her back in the next general election if they can have a GP appointment, good work and good pay.
It’s an approach that puts the UK Prime Minister on the opposite economic line to that of the US equivalent, President Biden, who “drip through Twitter economics” as the PM extolled the virtues of cutting taxes to me in our conversation.
“I’m sick and tired of petty financial issues. It’s never worked,” he tweeted. “We are building the economy from the bottom and the middle.”
It happened, I think, that the president’s remarks were intended to be heard by the household rather than a criticism of the new proposal in the number 10 budget.
But it is also clear that the US president does not agree with Ms Truss’s view that cuts in taxes for businesses and the rich will “fall away” for the rest of society.
‘More than the state’.
And back home, you have to wonder how a coalition of red wall and county Tory MPs will take this too.
Ms Truss only won the public support of 142 out of 353 MPs in the leadership race, despite having been set to win for weeks.
His support in the party is already shallow and these policies will inevitably divide the disparate coalition of constituents, and Mr Johnson’s voters were withdrawn in 2019.
But this is much more than just about the republic. It is also about economic governance and the confidence of public investors in the Truss government. and which confidence looks shaky.
Confidence in British assets is weakening, with bonds, equities and sterling – at a 35-year low – all at the same time and the Bank of England is already driving the biggest interest rate rise in three decades in line with this fluctuating inflation.
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On Friday, markets will be able to better understand – and perhaps judge about – Ms Truss’s economic plans, when the chancellor sets out her energy price guarantee and tax cuts in a mini-Budget that could prove extremely difficult. a great moment for his new government.
The PM herself, however, is firmly confident in her economic plan, telling me that while the country is facing “difficult times” this winter, the diamond “we will get through it”.
But, although the winter is due to the industry’s reasoning to raise rates and inflation, it is only about his government.
Ms Truss may set policies, but in the end it is the market and the voters who will decide – and now there is much doubt about the new PM and her policies.