British prime minister Liz Truss conceded not all her policies will be “popular” as she prepares to lift the cap on bankers’ bonuses while millions in the UK feel the squeeze of the cost-of-living crisis.
Instead, Ms Truss defended measures to swell “the size of the pie” as she struck out those with “vested interests” who will oppose her policies aimed at boosting economic growth.
She pledged the lower taxes British chancellor Kwasi Kwarteng is set to announce in his mini-budget on Friday will “lead to economic growth, there is no doubt in my mind about that”.
Critics have taken issue with the timing of the likely lifting of the bankers’ cap introduced by European Union legislation in the wake of the 2008 financial crisis. It limits annual pay-outs to twice a banker’s salary.
With the policy all but confirmed, Ms Truss pointed to Mr Kwarteng’s upcoming announcement when asked about the proposal as she flew to New York for a UN summit.
“What is important is what makes Britain more competitive,” she told reporters.
“Everything we do will be focused on delivering for people because ultimately what I want to see is more jobs, higher wages and more opportunities.”
But she was pressed on whether her government is on the right side as she also refuses to impose a windfall tax on energy giants to fund measures to prevent energy bills soaring further.
“We are on the side of delivering a higher wage economy, that’s what we need to do,” she said.
“Not every measure will be popular and there are always vested interests, people who oppose measures that increase economic growth.
“But what is important to me, what is important to the chancellor, is that people have more opportunities, there is more investment, there are jobs with higher wages. And we are prepared to make that argument. This is about growing the size of the pie.”
Ms Truss also defended the tax cuts coming in Friday’s “fiscal event”, which are expected to include a reverse of the national insurance hike and cancellation of the planned rise in corporation tax.
“Lower taxes lead to economic growth, there is no doubt in my mind about that,” she said.
“Now, there are of course other measures that we have to take to spur economic growth as well. During the campaign I talked about moving faster in getting growth projects going, mobile broadband fixing, the arteries of the economy – we need to do that too.
“But having the highest taxes in 70 years and putting up corporation tax at a time when we’re trying to attract investment to this country isn’t going to deliver growth. We need to be competitive.”
