Joe Biden calls Liz Truss tax cuts a ‘mistake’ as political fallout continues

Joe Biden has called Liz Truss’s abandoned economic plan that sent financial markets into chaos and caused a sharp drop in the value of the pound a “mistake” as criticism of her approach continued. The US president hinted that other world leaders felt the same way about her disastrous mini-budget saying he “wasn’t the only one” who had concerns over the lack of “sound policy” in other countries. Biden said it was “predictable” that the new British prime minister was forced on Friday to backtrack on plans to aggressively cut taxes without saying how they would be paid for, after Truss’s proposal caused turmoil in global financial markets.

His comments on Sunday to reporters at an ice-cream parlour in Oregon marked a highly unusual intervention by a US president into the domestic policy decisions of one of its closest allies. “I wasn’t the only one that thought it was a mistake,” Biden said. “I think that the idea of cutting taxes on the super-wealthy at a time when … I disagree with the policy, but it’s up to Britain to make that judgement, not me.

” Labour immediately leapt on the US president’s remarks. The shadow foreign secretary, David Lammy, said: “As well as crashing the economy, Liz Truss’s humiliating U-turns have made Britain’s economy an international punchline. “President Biden knows the dangerous folly of trickle-down economics .

His comments confirm the hit our reputation has taken thanks to the Conservatives. ” Biden has repeatedly poured scorn on so-called trickle down economics and ahead of his first bilateral talks with Truss in New York last month tweeted that he was “sick and tired” of the approach, which he claimed had never worked. Sign up to First Edition Free daily newsletter Archie Bland and Nimo Omer take you through the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties.

For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. Mini-budget went ‘too far, too fast’, says Jeremy Hunt Read more Biden’s comments came after weeks of White House officials declining to criticise Truss’s plans, though they emphasised they were monitoring the economic fallout closely.

The US president was speaking to reporters at an Oregon ice-cream shop during an unannounced campaign stop for the Democratic candidate for governor, Tina Kotek. Democrats face a tough US political environment amid Republican criticism of their handling of the economy. Biden said he was not concerned about the strength of the dollar – it set a new record against sterling in recent weeks, which benefits imports but makes US exports more expensive to the rest of the world.

He claimed the US economy was “strong as hell” but added: “I’m concerned about the rest of the world. The problem is the lack of economic growth and sound policy in other countries. It’s worldwide inflation, that’s consequential.

” Truss’s own new chancellor, Jeremy Hunt, has said Truss and his predecessor Kwasi Kwarteng’s mini-budget went “too far, too fast” as he effectively signalled the demise of the prime minister’s economic vision. “We have to be honest with people and we are going to have to take some very difficult decisions both on spending and on tax to get debt falling, but at the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people. ” Hunt is expected to announce that plans to reduce the basic rate of income tax next April will be pushed back by a year.

The cut to 19% will now take effect at the time previously proposed by Rishi Sunak, the former chancellor, who was Truss’s main leadership rival. .