Economy

Liz Truss says it is fair to prioritise tax cuts that benefit high earners more | Liz Truss

It is fair to prioritise tax cuts that benefit the highest earners 250 times more than the poorest, Liz Truss has said, insisting it is wrong to view all economic policy through the “lens of redistribution”.

In her most thorough interview in the Conservative leadership campaign, a day before she is widely expected to be declared the winner, Truss said she would provide immediate help over energy bills, but declined to say what.

“What I can say is that if I’m elected as prime minister, within one week I will make sure there is an announcement on how we are going to deal with the issue of energy bills, and of long-term supply, to put this country on the right footing for winter,” Truss told BBC One’s Sunday with Laura Kuenssberg show.

“I understand that people are struggling, that businesses are also concerned about their energy bills and the impact it could have on their future. So what I want to reassure people is, I will act.”

But under repeated questioning, Truss refused to give any details, saying she would only set this out if she defeated Rishi Sunak to become Tory leader on Monday. She would then take over from Boris Johnson as prime minister the next day.

Truss did, however, insist she would not be deflected from her prioritisation of tax cuts, and her efforts to cut regulation, saying it was more important to grow the economy than to try to reduce economic inequalities.

Shown calculations setting out that her planned reversal of a recent rise in national insurance would benefit top earners by around £1,800 a year, and the lowest earner by about £7, and asked if this was fair, Truss said: “Yes, it is fair.”

She said: “The people at the top of the income distribution pay more tax, so inevitably when you cut taxes, you tend to benefit people who are more likely to pay tax.

“But to look at everything through the lens of redistribution, I believe, is wrong. Because what I’m about is growing the economy. And growing the economy benefits everybody.

“So far, the economic debate for the past 20 years, has been dominated by discussions about distribution. But what’s happened is that we have had relatively low growth.”

Asked whether her principles would need to be trimmed on contact with the realities of the economic situation, as it is forecast that millions of households and businesses will simply be unable to pay energy bills, Truss said not.

“I don’t make promises I can’t keep,” she said. “I follow through on what I say I’ll do.”

On energy, while insisting she did back some aspects of renewable sources, Truss stressed her plans to push ahead with more North Sea drilling, and fracking for shale gas.

The winner of a race that has lasted nearly two months will be announced at midday on Monday, with the winner travelling to Balmoral the next day so the Queen can formally invite them to form a government.

Interviewed later on the same show, Sunak insisted he would remain as an MP if he lost, and did not rule out another attempt at the leadership.

“Oh gosh, we’ve just finished this campaign,” he said, when asked if he might stand again. “So, I’d say I need to recover from this one. But I look forward to supporting the Conservative government in whatever capacity.”

Sunak, who has been consistently more detailed and specific in his ideas for tackling the energy crisis, warned that it was impossible to rule out the idea of rationing or blackouts, saying it was “a genuine emergency”.

In an article published overnight in the Sunday Telegraph, Truss wrote that on energy, the UK needed to “take the difficult decisions to ensure we are not in this position every autumn and winter”, adding: “Sticking plasters and kicking the can down the road will not do.”

Much of the article was devoted to Truss reiterating her pledge to lower taxes and deregulate aspects of the economy, saying Brexit had given the UK “a chance to do things differently”.

“It is a chance to make our country freer, more innovative and more dynamic,” she wrote, promising to get “burdensome EU-inspired law” off UK statute books by the end of 2023.

Truss has, once again, not given details on this. However, on Saturday, the Times said she wanted to remove some EU-based workers’ protections, for example on the length of the working week, and entitlements to holidays.

Truss has made plain her desire to change the UK in this sort of broad direction, based on lower tax and a smaller role for the state.

“Our economy is not as competitive, dynamic and productive as it could and should be,” she wrote. “It takes too long to get things done: often businesses and families feel like they are wading through treacle. Our tax burden is too high. We need to prioritise reforms to get the economy moving and attract business investment.”

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