“We have to make tough decisions to get our economy right,” Truss said. “We have to look at our tax rates. So the corporate tax needs to be competitive with other countries in order for us to attract that investment.”
Truss, who has been Prime Minister for just two weeks – a time overshadowed by the death of Queen Elizabeth II – feels immediate pressure to deliver on her promises to tackle a cost-of-living crisis affecting Britain and a struggling economy Road to a potential crisis afflicts protracted recession.
She has already announced a cap on household energy bills, meaning the average cost of heating and electricity will be no more than £2,500 ($2,872) a year – far less than forecast. And she says companies will hear details of similar relief on Friday.
But Truss has ruled out extending a windfall tax on oil and gas companies imposed under Boris Johnson’s previous government and scraps plans to raise corporate taxes.
Critics say their pro-free market and low-tax economic views, inspired by Margaret Thatcher and Ronald Reagan, are the wrong answer to the crisis.
Truss, who is in New York to attend the UN General Assembly, confirmed the budget statement will reverse an income tax hike introduced earlier this year to fund health care and scrap a plan to increase corporate taxes.
She also made it clear that the government would remove the cap on bankers’ bonuses imposed after the 2008 global financial crisis, with the aim of attracting more jobs and money to London’s financial district.
“I don’t accept this argument that tax cuts are somehow unfair,” Truss told British broadcasters in interviews on the 102nd floor of the Empire State Building.
“We should base our tax policies on what will help our country prosper – what will produce this economy that benefits everyone in our country. What I don’t accept is the idea that corporate tax cuts don’t help people in general.”
Truss denied her plans would hurt the already ailing UK economy. The pound has fallen against the dollar by almost four decades, to around $1.14. She said her priority is to “get the economic fundamentals right.”
She acknowledged that the UK is facing “incredibly tough” economic times, fueled by Russia’s invasion of Ukraine, which has pushed up global energy prices.
But she denied her plans would cause pain to millions or ordinary Britons and could prove disastrous in an election.
“What I think working people are going to judge me and my government in the next election is: do I have a good job, are my wages going up, have I seen improvements in my town or my city?” she said. “That’s what people care about and I think people will vote on that.”
As she spoke, and seemingly by accident, US President Joe Biden tweeted criticism of the kind of economic policies Truss advocates. The two heads of state and government will meet on the sidelines of the UN summit on Wednesday.
“I’m sick of the trickle-down economy. It’s never worked,” he said.
