British PM Liz Truss vows to push ahead with tax-cut agenda

Oct. 5 (UPI) -- British Prime Minister Liz Truss vowed Wednesday to continue an agenda of tax cuts and deregulation despite political turmoil that erupted this week over economic reforms she says will put the country's sinking economy back on track.

"I am ready to make the hard choices," Truss said in her first speech before the Conservative conference in Birmingham, which was intended to build confidence around an agenda that has become controversial because it features the steepest tax cuts the country has seen since the 1970s.

The stimulus package includes $50 billion in tax cuts that the government would have to borrow and pay back over time, with economists also predicting deep cuts in public spending to offset the cost.

In spite of the serious political risks, the new leader's speech showed her to be undeterred and more determined than ever to reshape Britain's economy.

"Cutting taxes is the right thing to do morally and economically. Cutting taxes helps us face the global economic crisis, putting up a sign that Britain is open for business," Truss said. "For too long, our economy hasn't grown as strongly as it should have done. We must level up our country in a conservative way."

Truss emphasized "three priorities for our economy: growth, growth and growth," while also vowing to keep public spending in check and move forward with a plan to end regulation from the European Union by the end of the year.

"I believe in sound money and a lean state," she said, according to the Guardian.

On Monday, Truss faced widespread criticism after she scrapped a plan to abolish the 45% tax rate for those earning more than $168,000 annually, saying it had "become a distraction from our mission to get Britain moving."

The plan, unveiled as part of a larger growth agenda by Chancellor of the Exchequer Kwasi Kwarteng on Sept. 23, has led to a selloff of British government bonds and a dramatic drop in the value of the pound against the U.S. dollar.

The British pound, which had dropped to a historic low of $1.03 against the U.S. dollar last week, climbed to $1.12 Monday on news that the government had dropped its tax plan.

A month after becoming Prime Minister, Truss remains under extreme pressure to prove she is the right person for the job, but her tax-cutting efforts pose serious political risks, with the International Monetary Fund calling for her to reconsider her policies over fears the plan will worsen inequality.

Infighting has erupted within Truss's cabinet over the plan, while many longtime lawmakers have also expressed opposition to Truss' economic policies, which they criticize as being too "growth-focused."

Wednesday's speech was interrupted by protesters from Greenpeace, who held up a large yellow banner that read "Who voted for this?" leading Truss to quip: "Later on in my speech, I'm going to talk about the anti-growth coalition. I think they arrived in the hall a bit too early."

Much of the controversy surrounds Truss' refusal to consider raising welfare benefits to a level proportional to inflation, which had been a major promise of her predecessor, Boris Johnson.

Truss instead wants to tether benefits to the average earnings growth of a household, currently around 5.5%, which she says would save the government billions of dollars and get "more people into work."

Conservative Party members have warned Truss against cutting incomes amid one of the worst cost-of-living crises in recent memory, with inflation currently sitting near 10% in the UK.

Since becoming prime minister in early September, Truss faced pressure to act quickly to resurrect a British economy beset by a near-doubling in wholesale gas prices since May and Russia's restriction on gas supplies to Europe amid the war in Ukraine.

On her second full day in office last month, Truss announced a plan to help millions of Britons pay more expensive utility bills which skyrocketed over the summer and threatened to create a wider crisis this winter due to the Kremlin-ordered shutdown of Europe's main gas pipeline.