UK: Does Liz Truss have a plan for dealing with the crisis? | Europe | Dr..

In a little more than two years before she is subject to the vote of Britons in a general election, Liz Truss will have to face the daunting task of reversing the painful trajectory of her country’s hyperinflationary economy. Massive growth, weak growth and the ongoing fallout from Brexit.

This year, inflation is expected to reach 13% in Britain, and could reach 20% in 2023, if energy prices do not go down. The inflationary spiral is contributing to the deterioration of the quality of life of millions of people in the country.

Taxes or aid

This crisis dominated the leadership campaign between Truss and former British Chancellor of the Exchequer Rishi Sunak, his rival. Truss presented himself as someone who would rather cut taxes than help citizens. “The way I’m going to do things is in a conservative way, by reducing the tax burden, not by giving handouts,” he said in August.

His plans to cut taxes, which will cost the government more than £30 billion, include a proposal to cut green fees on energy bills, designed to fund renewable energy projects. He also wants to cancel the planned increase in the big business tax and reverse other planned tax increases, including the payroll tax. It says it will reveal those plans in an “emergency budget” to be announced before the end of September.

Sunak described Truss’ plan as “irresponsible and quiet”, given the level of UK state debt.

unconventional approaches

Truss has openly questioned the policies of major UK financial institutions such as the Treasury and the Bank of England.

“The treasury has amazing, very smart people working there, but there is definitely a dogma,” he said recently. financial times. “There is an emphasis in…what I call the ‘counter economy,’ which is making sure that taxes and spending are going up, but not enough focus on economic growth.”

She says she will “adopt” this doctrine, though she has downplayed reports that she will seek to split the Treasury into two separate divisions, one for public finance, and one more specifically for the economy.

Brexit, which is not mentioned

Both Truss and Snack support “Brexit” and, like many in the British political establishment, neither has shown much willingness to publicly acknowledge the difficulties leaving the European Union has created for the British economy in the past two years. Remain in the vote in 2016. But now she says she is convinced that Brexit is good for the country.

One area that EU policies will focus on immediately after Brexit as prime minister is the Northern Ireland Protocol. In her previous role as the UK’s foreign secretary, Truss was one of the driving forces behind the controversial Northern Ireland Protocol bill, a national law that would see Britain invalidate the protocol agreed with the European Union, something that would be in violation of international law.

Truss remains a staunch supporter of the bill and has hinted that it could also trigger what is known as Article 16, part of the “Brexit” deal between the European Union and the United Kingdom that allows the parties to withdraw from negotiations. protocol.

Any such move would lead to a strong response from the EU and could prompt the bloc to impose punitive duties on British exports.

For Truss, this represented another risk in his plan to deal with a serious economic crisis that none of his new predecessors had to deal with. The stakes are high and the expectations are low.

(PC/PC)