Kwarteng: The British economy must expect further tax cuts and deregulation | economic policy

Liz Truss plans to radically transform the UK economy with even more tax cuts and fewer regulations, her chancellor said, declining to put a limit on the amount of government debt that could result.

“There’s more to come,” Kwasi Kwarteng told ` One on Sunday with Laura Kuenssberg, two days after his unofficial budget brought in £45billion in tax cuts mostly for the wealthy.

“We’ve only been here 19 days. I want people to keep more of their income next year,” he said.

Kwarteng dismissed the money markets’ negative reaction to his mini-budget and related borrowing, saying he was confident the Bank of England could keep inflation under control.

He also denied that his tax cuts overwhelmingly favored those with higher incomes. “They favor people across the income spectrum,” he said.

Challenged how a government without a new mandate could take such a radically different course, the chancellor said he was sure the public would support his ideas.

When asked about budget plans that would increase public borrowing by about $400 billion in the coming years,

“Of course, you can’t borrow money forever, and that’s why on Friday I was very specific, very cautious when I said that we’re going to have a medium-term financial plan,” he said, arguing that the government needs to respond to Ukraine’s economic shocks -War and Covid.

“We had two unprecedented events for several generations,” he said. “There is no way any government should not respond with an expansionary fiscal response so that we can support the economy and support our people through these two unprecedented shocks.

“All I would say about borrowing is that we managed to respond to two so-called exogenous shocks that were beyond our control and were of unprecedented magnitude, and that was absolutely right.”

When asked if there was a limit to the new borrowing, Kwarteng replied, “What I won’t say is that there’s no way I can say that in the event of an exogenous, extreme event, we won’t borrow to deal with it.” To finish .”

The Chancellor agreed with Kuenssberg when asked if Truss’ government hoped to implement what previous Conservative governments, including Boris Johnson’s, had thought unthinkable on tax cuts and deregulation.

“It’s absolutely our focus,” he said. “The only way we’re going to pay for our public services in the future, the only way we’re going to have the kind of economy we want is for that economy to grow. And that is what I, the Prime Minister and the Government are 100% focused on.”

He didn’t rule out relaxing some immigration rules to provide more foreign workers or possible changes like lifting EU maximum working time rules, but said it was a matter for cabinet colleagues.

Asked how he feels capable of pursuing policies that differ from the Conservatives’ 2019 Manifesto, when only MPs and Tory party members voted for Truss, Kwarteng said only that it was “very much for me it was clear that people don’t want to increase the tax burden indefinitely”.

Challenged again whether he had public support for such radical changes, he said: “We have a responsibility as a government to keep everyone safe and to make Britain the best it can be and I think economic growth is absolutely essential to that.”