The Chancellor is preparing a multibillion-pound package of tax cuts to help businesses struggling with soaring energy costs.
Nadhim Zahawi is drawing up contingency plans to save businesses on the verge of bankruptcy for the new prime minister, who will be appointed on Monday.
According to the Times, the Chancellor believes the government can learn from the pandemic and introduce targeted reductions in VAT and business rates to protect the retail and hospitality sectors.
Over a million to get £326 government payout today – latest cost of living
Failure to act, Mr. Zahawi warned lawmakers, could lead to a wave of bankruptcies and economic scarring.
The chancellor could also give tax breaks to energy-intensive industries such as steel, paper, glass, ceramics and cement producers.
He also reportedly urged people not to “panic” over inflation and the worsening cost of living crisis.
Liz Truss is the favourite to win the Conservative leadership election, and the incumbent Chancellor would be in contention for a top job if she wins.
He insisted that Ms Truss, if elected, would “bring help” to families and businesses in need, according to the Times.
The foreign minister has come under fire from politicians across the board for failing to outline the specific policies she would adopt to tackle the energy crisis if she becomes prime minister.
Small businesses are on the verge of collapse as energy prices continue to soar, according to the Federation of Small Businesses (FSB).
Care provider faces energy bills 11 times higher – and may have to shut down homes
UK expects to enter recession this year
According to an FSB survey, nearly 15% of small and medium-sized businesses expect to be forced to close or downsize as a direct result of spiraling energy bills.
Mr Zahawi told The Times: “The lesson of COVID is that there are actually levers like VAT, like business tariffs.
“Targeting particular sectors of the economy, whether it’s hospitality or energy-intensive sectors, can be done very effectively. But like I said, there are no easy options.”
Meanwhile, households across the country say they plan to stop paying their energy bills in October.
At least 1.7 million households are considering canceling their energy direct debits when the next price cap increase takes effectaccording to a study published by Opinium this week.
. chancellor Nadhim Zahawi prepares for tax cuts several billions books for the companies who resist crisis energy News economic