Key Takeaways:
- Liz Truss proposes tax cut worth roughly £30bn.
- Conservative Party tax plans are unreasonable —Expert.
- We should welcome crypto in way that doesn't constrain its potential, says Truss.
LAGOS (CoinChapter.com) — United Kingdom Secretary of State for Foreign, Commonwealth, and Development Affairs, Liz Truss’s proposed policy to cut taxes has been met with severe warnings from experts, pointing out that it will only fuel inflation and economic hardship in the U.K.
In her bid to become the next U.K. prime minister, the crypto-friendly politician promised tax cuts worth billions of pounds. Truss promised to scrap a planned rise in corporation tax and suspend green energy levies, costing over £20 billion annually.
Furthermore, Truss proposed to reverse a rise in U.K.’s national insurance, worth roughly £11 billion annually. She promised to abolish the national insurance program designed to fund health and social care services, saying it’s a “mistake.”
However, experts have condemned Truss‘s proposed tax cuts explaining it would push interest rates up and increase the financial crisis. In addition, economists argued that the foreign minister’s proposals would risk stoking inflation and inequality in the U.K.
They also posited that the tax cuts would fuel government borrowing or require sweeping spending cuts.
George Dibb, head of the Centre for Economic Justice at the center-left IPPR think tank, said the plans were unreasonable. Dibb explained that Truss’s proposal did not match the needs of families struggling with the soaring cost of living.
“These tax cuts are no longer being promised as a way of addressing cost of living. It’s more of an arms race to win over Conservative party members and its totally divorced from reality.”
Dibb said.
U.K. PM Candidates’ Outrageous Tax Cut Promises
Meanwhile, it is worth noting that Liz Truss was not the only aspirant vying for the Prime Minister’s job to promise excessive tax cuts. Of the 11 candidates, almost all have made lavish pledges to reduce the tax rate and shrink the state.
Nadhim Zahawi, during his leadership speech, promised tax policies that would cost an estimated £50 billion annually.
Similarly, Sajid Javid, the former health secretary, proposed tax cuts that would cost about £40 billion a year. Javid’s proposal involves a reduction in income tax, scrapping national insurance, and an extra cut in fuel tax.
A series of candidates also promised to scrap a planned increase in corporation tax from 19% to 25%. Jeremy Hunt, another former health secretary, also promised tax cuts worth more than £30 billion.
Only Kemi Badenoch did not promise big tax cuts during her leadership speech. The minister, in her remark, noted that it was imperative and essential to be realistic about the fiscal situation.
Moreover, Gavin Barwell, a former PM Theresa May aide, said the Conservative Party tax cuts proposals are not sustainable.
“You can’t have Thatcher levels of taxation and Johnson levels of public spending – particularly given the damage Brexit has done to the economy and increased demand for public services post-Covid.”
Barwell said.
About Crypto-Friendly British PM Aspirant Liz Truss
Liz Truss is currently in the last phase in the contest to replace Boris Johnson as the British Prime Minister. She is the current foreign secretary and is outspoken about the potential of digital currency.
In 2018, Truss openly called for adopting cryptocurrencies into the U.K.’s economy during a policy shakeup. She was a prominent supporter of Johnson and secured the support of popular Johnsonites Nadine Dorries and Jacob Rees-Mogg.
Additionally, Truss was born in Oxford in 1975 to left-wing parents. At 18, she studied politics, philosophy, and economics at Merton College, Oxford, where she was president of the Oxford University Liberal Democrats.
Truss has vowed to bring about the biggest economic change the U.K. has seen in 30 years. Due to her fondness for cryptocurrency, it is fair to hope that favorable crypto-related policies will thrive in the U.K. when she wins.
