Truss ready to speed up tax cut plan

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Advisors to Truss believed the cut could be introduced within days of an emergency budget that her government would deliver in September, if she wins the ruling Conservative Party’s leadership race that is due to end on Sept. 5, it said…reports Asian Lite News

Liz Truss, the front-runner to become Britain’s next prime minister, plans to rush through tax cuts earlier than planned in an attempt to boost the country’s flagging economy, the Sunday Telegraph reported.

Truss was considering accelerating by six months her plan to reverse this year’s increase in social security contributions which had been pencilled in for April 2023, the newspaper said.

Advisors to Truss believed the cut could be introduced within days of an emergency budget that her government would deliver in September, if she wins the ruling Conservative Party’s leadership race that is due to end on Sept. 5, it said.

Truss’s rival, former finance minister Rishi Sunak, says cutting taxes now would add more fuel to Britain’s soaring inflation rate which is set to surpass 13% in October, according to the Bank of England’s latest forecasts.

The BoE has also said Britain is due to enter a 15-month recession starting later this year, something Truss says adds urgency to her plan to cut taxes.

Truss, writing in the Sunday Telegraph, said she wanted to “immediately tackle the cost of living crisis by cutting taxes, reversing the rise on National Insurance and suspending the green levy on energy bills.”

Sunak proposes a different approach by giving support directly to lower-income households that are most exposed to the surge in power bills which will rise sharply again in October.

On Saturday, he reiterated that he wanted to “go further” than the support he provided as finance minister before he resigned in protest at the leadership of Prime Minister Boris Johnson in July.

“It’s simply wrong to rule out further direct support at this time as Liz Truss has done and what’s more her tax proposals are not going to help very significantly, people like pensioners or those on low incomes,” he said.

A recent poll by YouGov showed Truss held a 24-point lead over Sunak among Conservative Party members who will choose the party’s next leader and Britain’s next prime minister.

In her Sunday Telegraph article, Truss kept up her criticisms of the BoE, saying it had exacerbated the jump in inflation and she would “work night and day” to fix the problem.

“That is why I want to look around the world at what the best performing central banks are doing to control inflation and how we can ensure our Bank is delivering what we need it to deliver,” she said.

BoE Governor Andrew Bailey has denied the BoE is to blame for the inflation surge, saying it began to raise interest rates earlier than other central banks and most of the recent acceleration of prices stems from Russia’s invasion of Ukraine.

Sunak under fire

Rishi Sunak, trailing in the two-horse race to replace British Prime Minister Boris Johnson, faced criticism on Friday for saying he had previously instigated policy changes to divert funding away from deprived urban areas.

The ruling Conservative Party is choosing a new leader after Johnson was forced to quit when dozens of ministers resigned in protest at a series of scandals and missteps. Party members are voting by post to select either Sunak or foreign minister Liz Truss.

Polling shows Sunak, who was finance minister between February 2020 and July 2022, is trailing Truss as the two candidates tour the country in a bid to secure votes.

His comments came in a video published on Friday by the New Statesman magazine, which it said was filmed on July 29 at a meeting of Conservative Party members in Tunbridge Wells, a relatively affluent area in south east England.

Sunak is seen telling an audience: “I managed to start changing the funding formulas to make sure that areas like this are getting the funding that they deserve, because we inherited a bunch of formulas from the Labour Party that shoved all the funding into deprived urban areas … that needed to be undone. I started the work of undoing that.”

The New Statesman did not specify who filmed the short video and Reuters could not independently verify the date or the location when the video was made. The context of his comments was not shown.

Asked about the comments, a source in Sunak’s campaign referred to reforms to ensure rural areas received funding alongside urban centres, pointing to his efforts, announced in March 2020, to redraw rules the finance ministry used to allocate investment.

Levelling up isn’t just about city centres, it’s also about towns and rural areas all over the country that need help too,” the source said, of Johnson’s policy to reduce regional inequalities.

“Travelling around the country, he’s seen non-metropolitan areas that need better bus services, faster broadband, or high quality schools. That’s what he’ll deliver as Prime Minister.”

Truss did not immediately comment on the video.

However, the opposition Labour Party seized on the video as evidence that the Conservatives, who have been in power since 2010, are not committed to spreading wealth across the country.

“Public money should always be distributed fairly and spent in areas where it is most needed,” Labour’s spokeswoman on Levelling up, Lisa Nandy, said in a letter to the government, describing the comments as “deeply concerning” and calling for an investigation.

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