PM ‘will Cut Stamp Duty’ To Boost Economy In Emergency Budget


Liz Truss is gearing up to wield the tax ax in the “emergency budget” this week – with a cut in stamp duty on the cards.

The package being drafted on Friday by Chancellor Kwasi Kwarteng will ease the pressure on struggling families by reversing the increase in national insurance.

It also plans to scrap the corporate tax hike planned for next year and remove the cap on City bonuses – with the prime minister insisting she is willing to make “unpopular” decisions that benefit the rich to revive the economy.

However, there is speculation that the “rabbit in the hat” for Mr. Kwarteng’s statement will be a cut in stamp duties, intended to keep the housing market moving as interest rates rise. Downing Street did not deny the report in The Times.

The risks of the extraordinary tax cut strategy were exposed this morning with official figures showing the government borrowed a further £11.8 billion in August, and the cost of paying off the mountain of debt reached a record £8.2 billion.

But Ms. Truss has made it clear that she is determined to focus on growth, arguing that everyone gets richer as the “pie” gets bigger.

Liz Truss (pictured in New York last night) is preparing to wield the tax ax in the 'emergency budget' this week - with a cut in stamp duty on the cards

Liz Truss (pictured in New York last night) is preparing to wield the tax ax in the ’emergency budget’ this week – with a cut in stamp duty on the cards

The risks of the extraordinary tax cut strategy were exposed this morning with official figures showing the government borrowed a further £11.8bn in August

The package drafted on Friday by Chancellor Kwasi Kwarteng will ease the pressure on struggling families by undoing the increase in national insurance.

But as she spoke, Joe Biden tweeted criticism of the kind of economic policies she was advocating — a day before their meeting at the UN summit in New York City.

‘I’ve had enough of the trickle-down economy. It never worked,” the US president said.

While his criticism was certainly aimed at a domestic audience, it underlined the differences between the two leaders’ positions, just as Ms. Truss says she wants to forge closer ties with international allies.

Ms. Truss was asked during a round of broadcast interviews at the 102nd floor observatory of the Empire State Building if she is willing to be unpopular.

‘Yes. Yes, I am,” she replied to Sky News.

“What’s important to me is that we grow the UK economy, because that will ultimately lead to higher wages and more investment in towns and cities across the country. That is what will ultimately bring more money into people’s wallets.

“To get that economic growth, Britain needs to be competitive. If we impose taxes, if we have arbitrary taxes on energy companies, if we have high corporate taxes, we don’t get that investment and growth…”

She insisted that the cost to taxpayers of her energy package, which is being paid by borrowing rather than a windfall on the profits of energy and oil giants, is “not what has been projected”, with estimates of up to £150 billion.

The Resolution Foundation think tank has said Ms Truss’ tax plans and energy aid will ensure that Britain’s richest households receive twice as much support in the cost of living as the poorest households.

Ms. Truss accepted that the benefits would favor the rich – at least initially – but dismissed claims of unfairness, betting that the growth would trickle down to the rest of society.

“I don’t accept this argument that lowering taxes is somehow unfair,” she told Sky.

“What we know is that people with higher incomes generally pay more tax, so when you cut taxes there’s often a disproportionate benefit because those people pay more tax in the first place.

“We should determine our tax policy based on what will help our country become successful. What will this economy yield that will benefit everyone in our country?’

She claimed criticism that it would be unfair to fund austerity by borrowing to be paid by future generations is “what people on the left of politics often express,” despite polls suggesting a windfall would be popular. .

Ms Truss confirmed to the BBC that she will reverse the increase in national insurance and abolish the planned corporate tax hike that was the policy of Boris Johnson’s government.

“I will always make sure that we help people who are having a hard time. That’s why we took the action we’ve taken against the utility bill, because we didn’t want households to face unaffordable bills,” she said.

Mrs. Truss and aides last night at UN headquarters in New York

Mrs Truss held talks with French President Emmanuel Macron in New York last night

The prime minister also met Japanese counterpart Fumio Kishida at the edge of the UN summit

‘And that is why we are going to take action in the field of national insurance and also reverse that increase.

‘So yes, we do have to make tough decisions to get our economy in order.

“We need to look at our tax rates. The corporate tax must therefore be competitive with other countries, so that we can attract that investment.’

With Ms. Truss pending a general election in 2024, she’s betting the benefits will come from potentially unpopular policies, such as that on banker bonuses.

Critics have objected to the timing of the lifting of the bank cap, limiting payouts to twice their salary, with the cap introduced by EU law in the wake of the 2008 financial crisis.

She said voters’ priorities in the next general election will be issues such as job opportunities, investment, street improvement, road construction and telephone signals.

The Institute for Fiscal Studies says canceling the corporate tax hike will cost £17bn a year, though the think tank acknowledges the figure doesn’t take into account how the move could affect investment.

The financial experts also say the reverse of raising national insurance will cost £13bn a year.

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