Prime Minister Liz Truss and her new chancellor have been forced to defend their controversial tax cuts, with the former vowing to usher in a “decade of dynamism.”
Using more than £70bn of increased borrowing, Kwasi Kwarteng announced the biggest program of tax cuts in 50 years, including abolishing the top rate of income tax for the highest earners.
But the £45bn package was met with alarm by leading economists, Tory MPs and financial markets, and send the pound tumbling to fresh 37-year lows.
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Some economists have predicted sterling could plunge to parity with the US dollar by the end of the year.
Such a slump could trigger a rebellion from Tory backbenchers, who could refuse to vote for the government’s finance bill or submit letters of no confidence, the Telegraph reported, citing backers and critics of the prime minister.
Meanwhile, Labor has called the plans an admission of 12 years of Conservative economic failure.
But Ms Truss insisted she is “unapologetic” in “focusing relentlessly on economic growth” as she defended her high-risk strategy designed to revive the UK’s stagnant economy.
In an op-ed for The Mail on Sunday, the PM wrote: “Growth means families have more money in their pockets, more people can work in highly paid jobs and more businesses can invest in their future. It provides more money to fund our public services, like schools, the NHS and the police.
“We will be unapologetic in this pursuit… everything we do will be tested against whether it helps our economy to grow or holds it back.”
A ‘decade of dynamism’
Repeating her pledge to do things differently from previous Conservative administrations, she said: “We will usher in a decade of dynamism by focusing relentlessly on economic growth.”
She also also brushed off suggestions the measures could be fiscally irresponsible.
In an interview with CNN to be aired on Sunday but trailed in advance, she was asked about the responsibility of her economic plan.
“I don’t really accept the… premise of the question at all,” she told the US broadcaster.
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“The UK has one of the lowest levels of debt in the G7, but we have one of the highest levels of taxes. Currently, we have a 70-year high in our tax rates.”
Chancellor defends accusations of ‘gambling’ with economy
Mr Kwarteng said he looks forward to “proving the naysayers wrong” over his “mission to encourage investment and drive growth”.
It comes as he was accused of “gambling” with the UK’s economy.
“I want to reassure you that with our growth plan everyone wins. This is a plan that cuts taxes for all, not just the wealthy,” the chancellor wrote in The Sun.
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“This is the first step towards igniting growth across the UK, with ambitious reforms to boost our economy”.
The pair could continue their tax-cutting spree in the new year with further reductions in income tax, as well as discounts for savers and child benefit claimants, according to the Telegraph, though Downing Street dismissed the report as “completely speculative.”
