Truss defends plan to cut national insurance despite it directly benefitting high earners
Liz Truss has insisted her plan to reverse the rise in national insurance is “fair” despite it directly benefitting higher earners.
The Foreign Secretary, who is tipped to become the next prime minister on Tuesday, said “growing the economy benefits everybody” and it is “wrong” to look at everything through the “lens of redistribution”.
Ms Truss has pledged to “start cutting taxes from day one” if elected. This would include setting out plans to reverse April’s rise in national insurance and next year’s corporation tax increase from 19% to 25%.
It was put to Ms Truss on BBC’s Sunday With Laura Kuenssberg programme that reversing the national insurance rise would see the poorest stand to gain about £7 while the wealthiest people could gain nearly £2,000.
Asked if that was fair, Ms Truss said: “The people at the top of the income distribution pay more tax. So inevitably when you cut taxes you tend to benefit people who are more likely to pay tax. Of course, there are some people who don’t pay tax at all.
“But to look at everything through the lens of redistribution I believe is wrong because what I am about is about growing the economy. And growing the economy benefits everybody.”
She added: “So far the economic debate for the past 20 years has been dominated by discussions about distribution, and what’s happened is we have had relatively low growth.”
Challenged again on whether the cut would be fair, Ms Truss said: “Yes, it is fair.”
Asked if it fair to give the wealthiest more money back, she said: “It is fair. We promised in our manifesto that we would not raise national insurance. I opposed the decision to raise it in Cabinet because it was the wrong decision.”
Ms Truss said she did not resign over the initial policy to increase national insurance because she preferred to stay “and fight my corner, because I’m not somebody who quits, I’m somebody who gets the job done”.
Opposition politicians responded with anger to Ms Truss’s claims.
Plaid Cymru’s Westminster leader described the plans as “Tory fantasy economics at their cruellest” on Twitter.
“This is Tory fantasy economics at their cruellest-making a mockery of poverty while toadying to their wealthy bankrollers. This is further proof that it’s a case of new leader same old Tories. It is simply unjust that those who need the most help receive the least.”@LSRPlaid https://t.co/GfC0ghrb78
— Plaid Cymru (@Plaid_Cymru) September 4, 2022
Rhondda MP Chris Bryant also attacked the comments and accused the Tory leadership front-runner of being “hostage to the crazed hard right”.
Truss: “To look at everything through the lens of redistribution, I believe is wrong," when shown the wealthiest will benefit most from her tax cuts. She thinks that’s “fair”. She’s hostage to the crazed hard right and will redistribute to the rich. She just doesn’t get it. pic.twitter.com/cTVWF5G0c4
— Chris Bryant (@RhonddaBryant) September 4, 2022
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This sounds like ‘trickle down economics’ which is a proven myth.
Needy will have to spend their £7 but the wealthy wil save their £2000. Adding to their hoard of weakth.
One might have had just a tiny tad of sympathy for Liz Truss but she seems not to realise that the UK does not have an equitable progressive taxation system. Thus the poor always pay proportianately more tax than the rich and in this case the tax cut are not at all fair as the rich will gain proportionately more than the poor. Poor lass is too ignorant to know that. Over ambitious, under qualified, intellectually vacant.
The whole point of the Tory Party is to make the rich richer at the expense of the rest of us.
I don’t believe the tories’ current strategy is based on working towards winning the next election. I think they fully expect to lose hard, and be out of government for some time. They’re using the time they’ve got left to drag everything as far to the right as possible, do as much damage as possible to the remnants of the welfare state, and leave the next government in a position where they’d have to spend their first 5 year term undoing tory knots just to start getting from the far right back to the centre. That’s not to say I… Read more »
She should try Head and Shoulders
When NI was raised under Boris’ government critics employed messages such as “tax on renter while protecting the landlord.” It’s not in itself a bad thing to cut NI tax so to allow people to keep more of the income they generate, even if it helps wealthier people, but the lost income needs to be replaced and shared out to poorer in society and local council’s etc. Liz Truss’ plan is bad because she wants to remove any government support and leave it up to the individual to help themselves – great if you’ve got pre-existing wealth (often inherited, often… Read more »
If they wished to raise more money from NI it would have made sense to abolish the Upper Earmings limit. By doing that high and very high earners would continue to pay the Standrd Rate NI contribution right across their income range. Now that would be a good way to increase tax revenue and is very progressive.
yet more proof, as if we needed it, that politicians are the biggest grifters that have ever existed, whatever party they represent, Around the world they’re arguing about who has the money while they let the planet burn around us all.