Truss told Tapper that by cutting taxes, her government was “incentivizing businesses to invest and we’re also helping ordinary people with their taxes.”
While the cuts were expected, critics warn that they will be more beneficial for the wealthy than the majority of British society. Shortly after Truss’s finance minister, Kwasi Kwarteng, announced the cuts on Friday, the pound sank almost 2.6% to its lowest level against the US dollar since 1985.
The UK Treasury said that the cuts, which include slashing the top rate of income tax to 40% from 45%, reductions in duties paid on house purchases, and the cancellation of a planned hike in business taxes, would wipe £45 billion ($50 billion) off government revenues over the next five years.
Pressed on the responsibility of her economic plan, Truss told Tapper: “I don’t really accept the premise of – 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 taxes. Currently, we have a 70-year high in our tax rates.”
Despite the hit to public revenue, Truss confirmed in the interview that her government would still help citizens with energy bills this winter.
“We’ve also put in place a package of measures to support consumers with energy prices, to make sure that nobody is having to pay more than £2,500 on their bills.”
The pledge to help Britons pay their energy bills comes ahead of what is predicted to be a brutal winter. Inflation rose above 10% in July for the first time in 40 years, driven by the rising cost of energy and food. Household energy bills have already risen 54% this year and could go even higher.
Truss has also been criticized for making this 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 nation’s credit card.