We now know that Liz Truss is the new leader of the Tory party and will today become the Prime Minister.
Truss has already said that she will introduce immediate measures to protect businesses and families from the exponential increases in energy costs and, whilst these are to be welcomed, only time will tell if those measures are sufficient to deal with the current predictions of 300% increases in fuel bills.
But this is just the tip of a very large iceberg. Other items on the taxation wish-list are:
- A reversal of the increase in National Insurance contributions and the removal of the Health and Social Care levy, but in a way that retains the enhanced funding for the NHS.
- A reversal of the anticipated increase in corporation tax to 25% from 1 April 2023 as this is a barrier to growth for businesses.
- An extension to the super deduction available at the rate of 130% on qualifying capital expenditure or, at the very least, an extension to the Annual Investment Allowance on expenditure up to £1,000,000.
- Reductions in the rate of VAT on certain types of expenditure – particularly business energy costs.
For me, the biggest challenge is, however, for her to show definitive and decisive leadership at a time when we need it most – the leadership vacuum of the last six weeks of the leadership contest has seen the country revert to the expectation of interest rates of up to 7% and inflationary pressures of up to 22%. Only a safe and firm pair of hands will see the Economy deal with this as a temporary blip, rather than a hardwired long-term problem.
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