Prime Minister Nadhim Zahawi prepares billions of pounds in tax cuts for businesses through energy crisis | Business newsletter
The Prime Minister is preparing a multibillion-pound package of tax cuts to help businesses struggling with rising energy costs.
Nadhim Zahawi is drawing up emergency plans to save companies on the brink of collapse for the incoming prime minister, who will be named on Monday.
According to The Times, the prime minister believes the government can learn from the pandemic and introduce targeted reductions in VAT and business tax rates to protect the retail and hospitality sectors.
Over a million to get £326 payout today – latest cost of living
Mr. Zahawi warned lawmakers that failure to act could lead to a wave of bankruptcy and economic scarring.
The Prime Minister can also reduce taxes for energy-intensive industries such as steel, paper, glass, ceramics and cement manufacturers.
He also advised people not to “panic” over inflation and the worsening cost of living crisis.
Liz Truss is the forerunner to win the Conservative Party leadership election and the outgoing prime minister is deemed fit for a top job if she wins.
He stressed that Ms Truss, if elected, would “help” families and businesses that are struggling, according to The Times.
The foreign minister has been criticized by politicians around the world for failing to outline any specific policies she would enact to tackle the energy crisis if she becomes prime minister.
Small companies are standing on the brink of collapse as energy prices continue to soar, according to the Federation of Small Businesses (FSB).
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According to an FSB poll, nearly 15% of small and medium-sized businesses think they may be forced to close or downsize due to rising energy bills.
Mr Zahawi told The Times: “The lesson from COVID is that there are actually some levers like VAT, like business tax rates.
“Targeting specific sectors of the economy, whether it’s hotels or energy-intensive sectors, can be done very effectively. But like I said, there’s no choice. Which is easy.”
At the same time, households across the country said they were planning to stop paying their energy bills in October.
At least 1.7 million households plan to cancel their energy direct debit when next price limit increase startsaccording to research published this week by Opinium.
