New chancellor Nadhim Zahawi has promised to cut taxes, potentially reversing the impending increase in corporation tax teed up by his predecessor.
The multi-millionaire Zahawi, a rival to Rishi Sunak’s as “the richest person in government”, has vowed to “get inflation under control and be fiscally responsible”.
But his ability to make an impact is slim, with the UK facing the worst growth performance of any economy in the developed world this year and next, according to international forecasters.
Zahawi’s resolve could be put to the test in the coming weeks if the prime minister calls an emergency summer Budget.
On the cards are demands to temporarily cut VAT to boost spending, slash fuel duty further, and bring forward Sunak’s pledge to cut income tax by 1p in 2024 – a likely election year. That is alongside hints that the planned increase to the corporation tax from 19% to 25% due in April 2023 will be cancelled.
“Nothing is off the table,” Zahawi has said.
