Biden And Truss At Odds On Economics Ahead Of Summit

Liz Truss says a possible free trade deal between the UK and US is years away

- Adam Forrest

Liz Truss appeared to be on a collision course with Joe Biden over fiscal policy ahead of a meeting at the United Nations summit in New York today, after the US president lashed out at "trickle-down economics".

Ms Truss admitted yesterday that her own tax-cutting plans will initially benefit the rich more than the rest of Britain - insisting that economic growth would "benefit everybody" in the long run. This came as Mr Biden said that he was "sick and tired" of the right-wing economic theory that cutting taxes for businesses and the wealthy will see benefits "trickle down" into the pockets of the least well-off.

But No 10 dismissed suggestions that Mr Biden's words were directed at the new premier. Her official spokesperson said: "Any suggestion that it's in some way a direct criticism of UK policy would be ludicrous. No two countries' economies are structured in the same way - each have unique challenges."

Meanwhile, the PM also appeared to suggest her government was willing to lift the cap on bankers' bonuses in the City of London, despite widespread outrage among MPs, unions and economists at the proposal.

Asked in New York about the fairness of her own tax plans, the PM told Sky News: "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." Asked by the BBC about allowing bankers bigger bonuses, and whether people were entitled to wonder "whose side" she was on, the PM did not knock down the idea that the cap on bonuses introduced in the wake of the 2008 financial crash could be scrapped. "What I want to see is a growing economy," she said.