Will Liz Truss's economic plans make us richer?

With the death of Queen Elizabeth II, Liz Truss has faced an unprecedented challenge in her first month in the job.

Just as testing will be her pledge for a "bold plan to grow the economy".

On Friday, the Chancellor, Kwasi Kwarteng, will outline a mini-Budget to deliver promises made by Ms Truss during her Tory leadership campaign to cut taxes.

The mini-Budget is expected to reverse a 1.25% rise in National Insurance and scrap a 6% increase in corporation tax at a cost of ?30bn. A cut in the basic rate of income tax may, it's reported, be on the cards.

The announcement comes at a crucial time. Living standards are dropping at their fastest rate in decades and a recession may be imminent.

And on average, we have been underperforming against major economies over the past 15 years, while income inequality has widened.

All prime ministers promise to make us better off, but they differ in how they intend to do it.

All change?
Ms Truss's pitch echoes the small state mantra of those on the right of her party: "Cut taxes to reward hard work and boost business-led growth and investment."

The theory is that by allowing businesses and workers to retain more cash, they should spend and invest more which, in turn, should bring in more tax revenue. Cut red tape, and they have the freedom and incentive to do even more - what's termed supply-side reforms.

One of the chancellor's first moves was to sack the Treasury's top senior servant, Tom Scholar, who helped mastermind the UK's response to the 2008 financial crisis. It sent a stark message; Kwasi Kwarteng and his boss are plotting a new course, doing things differently.

But they'll face challenges.

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Mr Kwarteng is said to want the UK economy to grow by 2.5% per year on average. That scale of growth has eluded many chancellors, whatever they've wished for, particularly since the financial crisis.

Cutting taxes marks a definitive break from the Conservative's austerity era. But many economists query if that will substantially revive growth. Analysts at Oxford Economics, using a model that mimics that of the Treasury, say that they would add just 0.1% to the level of output of GDP by 2025. History says tax cuts rarely pay for themselves.

They could, however, risk inflation - and so perhaps interest rates - staying higher for longer.