Liz Truss insists she's 'willing to be unpopular' while admitting tax cuts will disproportionately benefit the rich

Liz Truss has insisted she’s “willing to be unpopular” and admitted her planned tax cuts will disproportionately benefit the rich.

The Prime Minister has effectively confirmed a plan to scrap the cap on banker's bonuses and axe the planned rise to corporation tax.

It came on a day that also saw Ms Truss admit a trade deal with the US could be years away, with no "negotiations taking place".

She made the comments in New York at the exact time US president Joe Biden tweeted he was "sick" of the economy policy she was advocating.

Prime Minister Liz Truss speaks to journalists at the Empire State Building in New York.

He wrote: “I am sick and tired of trickle-down economics. It has never worked.”

Ms Truss is in New York to attend her first United Nations General Assembly on Wednesday as Prime Minister.

It comes in a big week for the UK Government, with business secretary Jacob Rees-Mogg expected to announce on Wednesday how firms, schools, hospitals, charities and other non-domestic consumers will be spared some of the pain of rising gas and electricity bills.

On Friday, the Chancellor will then unveil what is being called "The Growth Plan", previously known as the Autumn Emergency Budget.

The Prime Minister was asked in an interview with Sky News on the 102nd-floor observatory of the Empire State Building if she is prepared to be unpopular.

She replied: “Yes, I am.

“What is important to me is we grow the British economy because that’s what will ultimately deliver higher wages, more investment in towns and cities across the country. That’s what will ultimately deliver more money to people’s pockets.

“In order to get that economic growth, Britain has to be competitive. If we put up taxes, if we have arbitrary taxes on energy companies, if we have high corporation tax we’re not going to get that investment and growth.”

Economic experts and critics of her policies have warned tax cuts will benefit the rich far more than the rest of society.

Ms Truss accepted this would be the initial effect, but rejected criticisms of unfairness.

She said: “I don’t accept this argument that cutting taxes is somehow unfair.

“What we know is people on higher incomes generally pay more tax, so when you reduce taxes there is often a disproportionate benefit because those people are paying more taxes in the first place.

“We should be setting our tax policy on the basis of what is going to help our country become successful.

"What is going to deliver that economy that benefits everybody in our country. What I don’t accept is the idea that tax cuts for business don’t help people in general.”

Ms Truss confirmed to the BBC she will be reversing the national insurance hike and axing the planned corporation tax rise that were the policies of Boris Johnson’s administration.

She said: “I’ll always work to make sure that we are helping those who are struggling. That’s why we took the action that we took on energy bills because we didn’t want to see households facing unaffordable bills.

“And that’s why we’re going to take the action on national insurance, reversing that increase as well.

“So, yes, we do have to take difficult decisions to get our economy right.

“We have to look at all tax rates. So corporation tax needs to be competitive with other countries so that we can attract that investment.”

The Prime Minister also insisted she would not be telling Britons to ration their energy use this winter as Russian president Vladimir Putin limits gas supplies to Europe, arguing soaring energy bills were a “price worth paying” to secure the UK’s “long-term security”.

She also told reporters travelling with her to the United Nations summit in New York the UK “cannot jeopardise our security for the sake of cheap energy”.

The Prime Minister explained: “The point that I’m making is that it’s a price worth paying for Britain, because our long-term security is paramount.”

Earlier on Ms Truss conceded that negotiations for a post-Brexit free trade deal with the US will not restart for years.

The Prime Minister stressed her trade priority was striking agreements with India and the Gulf states, and joining a trade pact with nations including Australia and Japan.

She said: “There aren’t currently any negotiations taking place with the US and I don’t have an expectation that those are going to start in the short to medium term.”

Officials did not deny Ms Truss was effectively conceding it will be years before talks with the White House resume.

The SNP's shadow chancellor Alison Thewliss said: "While household bills reach eye-watering levels, the reality is that the UK Government has sat on its hands and failed to take the necessary action needed to protect people and businesses.

"In fact, the only measures reported so far have been a Truss tax that would see households forced to pay the multi-billion pound cost of an energy bill freeze and shameful plans to scrap the cap on bankers' bonuses.

"While bankers rake in more money and energy companies make billions in excess profits, ordinary households are once again left behind struggling to make ends meet and as debt piles up.

"The UK Government must deliver real and targeted support, including freezing energy bills for as long as necessary, but not at the expense of ordinary families, and expanding the windfall tax on the excess profits of major companies.

"Westminster's failure to act is in stark contrast to the plans being delivered by the SNP Scottish Government, which is benefiting low and middle income families by increasing the Scottish Child Payment to £25 per child per week, freezing rents, freezing rail fares, and expanding universal free school meals."