Chancellor Nadhim Zahawi plans to help businesses facing bankruptcy by implementing a multibillion-pound package of tax cuts. The Times reports Mr Zahawi said ministers could learn the “lesson from Covid” and bring in targeted reductions in VAT and business rates to aid the retail and hospitality sectors.
Mr Zahawi is believed to have discussed his plans with the favourite to win the Tory leadership contest, Liz Truss, and is in line for a senior job in her cabinet should she be victorious, although he is not expected to be chancellor after Monday's poll outcome. He said that failing to act could result in economic "scarring" and bankruptcies.
Mr Zahawi said Ms Truss would ensure that the Government acted to mitigate the effect of the energy price hike on families next month, as well as a further anticipated increase in January. He said: “My responsibility is to make sure I share with her where I think the pressure is on families, on households and on business, then give her the options as to what we can do.
“The one thing she has said is that help is coming and I am confident that Liz means what she says. She will deliver that help." He added that his “very strong advice” to people was not to “feel panicked or nervous”.
He also insisted a prime role of the next chancellor would be to help businesses. “If we don’t support businesses I worry about the longer-term scarring of the economy," he said.
"I had an example given to me the other day from EDF. One of their clients, their bills have gone from £25 million a year to £75 million. This is a perfectly viable business. We have to make sure we support businesses as well as households.
“The lesson from Covid is that actually there are some levers like VAT, like business rates. Targeting particular sectors of the economy, whether it’s hospitality or high-energy use sectors, can be done very effectively, but as I say there are no easy options."
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