It has been stated that Liz Truss’s premiership will be defined by the manner in which she addresses the crisis of the cost of living.
During her campaign, Ms. Truss pledged to reduce taxes if she were elected to the position of prime minister, which she will assume on Tuesday.
After it was reported that she had won the leadership of the Conservatives, other financial experts proposed additional possibilities that may be taken into consideration.
As the need for support among households is immediate, tax cuts provide assistance on a more gradual basis than would fiscal transfers.
The Bank of England has issued a warning that inflation is expected to surge to more than 13% and that average annual energy bills are expected to skyrocket by 80% in October, rising from £1,971 to £3,549.
Mr. Goodwin proceeded by saying, “Tax cuts provide support on a more gradual basis than fiscal transfers would, and the need of households is acute given that they face extremely big rises in their bills in October, January, and probably April as well.”
Tax cuts will “do little for individuals on the lowest incomes who most need support,” according to Tom Selby, head of retirement policy at AJ Bell.
It was suggested by Sarah Coles, a senior financial knowledge analyst at Hargreaves Lansdown, that possible investment support could include “bringing in new subsidised energy tariffs for those expected to face the biggest financial difficulties, or it could mean additional contributions for those on the very income scale through the the Universal Credit system.”
In addition, she drew attention to the possibility that tax reductions could make the problem of inflation even worse by stating, “The worry is that an awful lot of possible tax cuts will do more than offset growing costs for higher earners.”
Even though it would be a pleasant lift for them, it could entail driving prices even higher, which could put us all in a worse financial position.
“Despite the focus on tax throughout the presidential campaign, all pronouncements are of course open to new ideas when definitive plans are written up,” said Sian Steele, head of tax at investment managers Evelyn Partners. “Despite the focus on tax during the leadership campaign.”
It is possible that some of the policies that are currently scheduled to be implemented will be delayed or scrapped entirely as our new prime minister works to address the economic crisis.
“to give everyone else a fighting possibility of keeping the lighting system on this winter,” Heidi Chow, executive director of the campaigning organization Debt Justice, called for an economic boom of tax on electricity generated in order to freeze energy prices and pay off households’ energy debts. These goals would be accomplished by increasing the tax on energy producers.