Liz Truss, leader of the Tory Party, dismissed the handouts as best way to help households through the strongest decline in income in 60 years old, promising instead tax cuts and sweeping economic reforms.
farm, in Interview with The Financial Times has challenged the “economic accounts”. of Treasury, insisting that she will move forward with tax cuts, despite claims that they will spur inflation, already up to 13 percent is predicted.
Foreign secretary not rule out violation up treasury and she took aim at the bank of England use of quantitative easing and its impact on inflation, saying it’s time review in bankmandate.
Farm also rejected the picture general elections, if elected Tory leader and therefore becomes Britain prime minister on September 5 – a move who could use the honeymoon period before the economic crisis worsened. “I can absolutely rule what out,” she said.
asked how she intended help households facing rising fuel bills this winter – energy price cover can rise on more over £2,000 in less than year Truss insisted that the answer was a tax cut and an offer. side reforms.
“Of course I’ll see what more can be done,” she said. “But way i would do it in conservative way of reducing the tax burden without giving out handouts.”
The farm has already promised to cancel the promotion in national insurance rates introduced by her leadership rival and former Chancellor Rishi Sunak, as well as temporary removal of green charges on electricity bills, worth around £150 per family each year.
But economists point out out it won’t cover rise in average annual electricity bills, which were capped at £1,971. in April but with some forecasts say it could top £4,200 in January.
They argue that “pro-growth, pro-business, pro-entrepreneurial, pro-investment” policies will take time to implement, and that, in the meantime, households face crippling difficulties.
Paul Johnson, director of institute for Fiscal studies, said the one who became next prime minister would have to finance new support package worth billions of pounds, including helping those whose incomes are too low to take advantage of the tax cut.
Scale of economic challenge which will face either Truss or Sunak was set out Andrew Bailey, Bank of Governor of England, this week. On Thursday he warned of 15 month recession rising unemployment and inflation peaking above 13 percent later year.
The trail’s answer is to prioritize longer.term reforms to improve growth – including reverse of planned by Sunak rise in corporate tax from 19% to 25%; non-term palliative solutions.
“I think raising income taxes is completely counterproductive,” she said. “I think it will interfere growth and make it harder to pay. down debt”.
Truss said that if elected, she would “immediately” pass the budget and completely cancel the planned corporate tax increase, i.e. move this will make a £17 billion hole in in public finance.
Foreign secretary insisted that she could afford tax cuts worth more than 30 billion pounds using up “stock” in current fiscal projections – although economists believe a sharp economic downturn could erase this out.
Truss refused to discuss the “hypothetical” situation of headroom was disappearing, but insisted on not allowing borrowing to skyrocket. She will adhere current fiscal rule as well as “start payment debt down in three years”.
She spoke at headquarters in London. of insurance company Aviva and said that the city play “important role” in attraction of investments, including in increasing domestic energy supply in the UK.
But Truss was very critical of culture in the Treasury, which was run Sunak until former Chancellor resigned last month, giving up rule out split it up into a separate economy and finance ministries.
“I would not want to give Any warning nobody on on that front,” she said. Truss said the Treasury was being swallowed up by “economic accounts.” of manufacturing sure this tax and spend add up”.
She said she would set up “strong economic unit in Number 10”, suggesting that she will seek to establish tight control over “a strong chancellor and a very strong team in the treasury.”
Truss’s allies said the Bank of England was too slow to up interest rates to curb inflation. While foreign secretary defended the bankIndependence of Russia, she said that her mandate should be reviewed.
“One of problems that I want watch it control of in money supply and, in particular, quantitative easing policy and what impact it had,” she said.