Tax cuts could turbocharge Scotland's economy - Liz Truss

Liz Truss has urged Nicola Sturgeon to follow her lead with tax cuts that could "turbocharge" Scotland's economy.

The prime minister suggested measures outlined in her mini-budget - which have prompted market turmoil - should be replicated at Holyrood.

She also backed an increase in nuclear power plants in Scotland and upping North Sea fossil fuel production to fight the energy crisis.

The first minister said Ms Truss should axe her "abhorrent" financial policies.

Westminster's tax plans, which include scrapping the 45p income tax band for top earners, have not been adopted at Holyrood, where income tax powers are devolved.

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Ms Truss said "global economies" were facing similar pressures due to Russia's war in Ukraine. She insisted her government was taking "decisive action" to combat the "economic slowdown".

In an interview with BBC Scotland, ahead of the Conservative party conference, the prime minister said she was "very keen" to work with Nicola Sturgeon on growing the Scotland's 's economy.

She said: "I'm keen to use more of the resources in the North Sea, also see more nuclear power stations built across the country, including in Scotland.

"And I'm very keen to talk to Nicola Sturgeon about that because I think it will help us make sure we have long-term energy security, that alongside wind power in Scotland we have nuclear energy in Scotland."

Nicola Sturgeon has condemned the prime minister's tax cuts

Ms Truss added: "Scotland is a country that has fantastic entrepreneurs, fantastic exports.

"I believe that by improving infrastructure, by reducing taxes we can really turbocharge the Scottish economy. I'm keen to work with Nicola Sturgeon on that."

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The UK government's £45bn mini-budget, funded by more public borrowing, has caused the pound to plummet and led to a spike in borrowing costs.

The Bank of England has stepped in and buy £65bn of government debt to stop some pension funds collapsing.

The International Monetary Fund (IMF) also warned the proposal was likely to increase inequality and add to pressures pushing up prices.

Offering to work with Nicola Sturgeon sounds more conciliatory than Liz Truss was prepared to be during the Conservative leadership campaign.

Then: she suggested the first minister was an attention seeker, best ignored - at least on demands for an independence referendum.

Now: the emphasis is on cooperation.

No doubt there is plenty of room for close working between the UK and Scottish governments in the current crisis.

However, if you look at the specific areas the prime minister has identified, these include several where there is already substantial disagreement.

On cutting taxes, boosting North Sea oil and gas production and building new nuclear power stations Holyrood and Westminster do not see eye to eye.

So Ms Truss's talk of teaming up is as much a challenge to Ms Sturgeon to embrace the UK government's economic agenda as it is any kind of olive branch.

Amid criticism of her tax plans, Ms Truss said it was the "right thing to do".

She also pointed to her government's move to limit a typical household's energy bill to about £2,500 per year.

"It is right that because of the really difficult economic circumstances we face, and the world faces, that we're doing all we can to support people," the prime minister told BBC Scotland.

"That does mean extra borrowing this winter. The chancellor will be setting out in November how we're going to get borrowing down as a proportion of GDP over time.

"But what would have been completely wrong is for people to face those huge energy bills and people to face tax rises just at a time when we are in this very, very difficult economic situation."

The Bank of England intervened following the UK government's mini-budget

The first minister has said the income tax cuts will not be replicated in Scotland.

She told MSPs on Thursday: "People are terrified about the cost of living, about their mortgages, about the ability to heat their homes, about the security of their pensions.

"And all of that has come from a UK government decision to borrow vast amounts of money to give enormous tax cuts to the very richest in our society.

"It is morally abhorrent and economically disastrous."

In response to the prime minister, Ms Sturgeon's spokesperson said: "We will always look to work constructively with the UK government, where possible, in Scotland's best interests.

"But the urgent and essential priority for the PM is to reverse her government's catastrophic tax policies that have sent the pound plummeting and have left millions of households in fear of what comes next."