Liz Truss defended her government’s controversial announcement to cut taxes for citizens and businesses in an exclusive interview with CNN’s Jake Tapper.
Truss told Tapper that by cutting taxes, his government “is getting businesses to invest and we’re also helping ordinary people pay their taxes.”
While the cuts were expected, critics warn they will benefit the wealthy more than the majority of British society. Shortly after Truss Finance Minister Kwasi Kwarteng announced the cuts on Friday, the pound fell nearly 2.6% to its lowest level against the U.S. dollar since 1985.
The UK Treasury said the cuts, which include cutting the top rate of income tax from 45% to 40%, reductions in duties paid on house purchases and the cancellation of a planned tax hike on businesses, would wipe out £45 billion ($50). billion) on government revenue over the next five years.
Pressed on the responsibility of his economic plan, Truss told Tapper, “I don’t accept the premise of – the premise of the question at all. The UK has one of the lowest levels of debt in the G7, but we have one of the highest levels of taxation. Currently, we have a 70-year high in our tax rates.
Despite the hit to government revenues, Truss confirmed in the interview that his government will still help citizens pay their energy bills this winter.
“We have also put in place a package of measures to support consumers with energy prices, to ensure no one will have to pay more than £2,500 on their bills.”
The pledge to help Britons pay their energy bills comes ahead of what is expected to be a brutal winter. Inflation exceeded 10% in July for the first time in 40 years, driven by rising energy and food prices. Household energy bills have already increased by 54% this year and could rise further.
Truss has also been criticized for making the pledge while refusing to tax energy companies for their windfall gains. The government will instead rely on borrowing to cover the cost, which the opposition has described as putting the cost on the country’s credit card.