Liz Truss recently beat former chancellor Rishi Sunak in a ballot of Conservative Party members and is now succeeding Boris Johnson as the United Kingdom’s prime minister, after formal appointment by Queen Elizabeth on Tuesday 6th September.
During her first speech outside 10 Downing Street, the PM set out three priorities for her government:
- Grow the economy through tax cuts and reforms;
- Deal with the energy crisis;
- Ensure the National Health Service meets the needs of the population.
Truss’s economic agenda is thus set to envision several measures to reboot the currently stalled economy and help people with the increasing cost of living.
The priority is to rush through an estimated £30bn-worth tax cuts, primarily through the following actions:
- Reversing the recent increase in National Insurance;
- Cancelling the scheduled rise in corporation tax from 19% to 23%.
Concerning the energy crisis, the Prime Minister is anticipated to reveal plans to cap annual energy bills at roughly £2,500, considering also a further £400 universal handout to be distributed to households this autumn.
In order to finance the freeze, the seemingly discussed options included granting government-backed loans to energy providers, which could later be repaid through extra levy on users bills once the crisis ends.
The Government is understood to be looking at extra government borrowing, totalling up to £90bn and absorbing the significant costs into general taxation.
Although Truss has stated that her initiatives would be paid mainly by deferring repayment of Covid-related debts, there is still widespread scepticism around these measures, as the need to borrow significant sums at possibly high rates would come at further cost to the already stagnating economy.