Boris Johnson’s announcement that he is stepping down as Conservative leader and Prime Minister has sparked a new leadership contest. But what does that mean for business?
There are now two candidates left in the running to be the next Conservative leader and prime minister: Liz Truss, the current foreign secretary, and Rishi Sunak, the former chancellor.
Sunak and Truss have gone head-to-head in heated clashes in recent televised debates over issues such as inflation, immigration, taxes and China.
Truss plans to cut taxes from day one and borrow money to boost the economy. Sunak, on the other hand, plans to continue with planned tax increases until inflation is under control and then cut taxes.
We take a closer look at their policies and what they mean for UK business.
This article was updated on 27 July to reflect the latest announcements.
She wrote: “I would reverse the National Insurance increase that came in during April, make sure we keep corporation tax competitive so we can attract business and investment into Britain, and put the Covid debt on a longer term footing.”
Truss has pledged to scrap plans to increase corporation tax to 25 per cent, and reverse Boris Johnson's 1.25 per cent increase to National Insurance designed to pay for the NHS and social care.
Experts have said fiscal plans would cost the Treasury £30billion but she has insisted they will not impact public spending, because she will increase borrowing, Mail Online reports.
“My plan will secure our future by focusing on economic growth, and getting us back on track towards becoming a high-growth and high-productivity powerhouse. It is built on a clear and long-standing Conservative philosophy, including bold supply-side reform,” she wrote.
While many rivals have pledged tax cuts, Sunak said he would only deliver tax cuts once inflation had been tamed.
He told The Telegraph: “We will cut taxes and we will do it responsibly. That’s my economic approach. I would describe it as common-sense Thatcherism. I believe that’s what she would have done.”
In Monday’s leadership debate, he claimed Truss would plunge “millions of people into misery” by cutting taxes now, a move he claimed would see a big spike in interest rates and crash the economy, the Financial Times reports.
“In a combative performance, in which he repeatedly interrupted his rival, Sunak said Truss wanted to put £40bn of extra borrowing on the country’s credit card,” the report said.
Sunak has vowed to cut VAT on energy bills. On Tuesday, he announced that the 5% VAT rate on household energy would be scrapped for one year from October, if the price cap on bills rises above £3,000 for the typical household, the BBC reports.
He said he plans to boost the economy through investment, training and innovation.
The Guardian reports that she would slash VAT on fuel at the pumps by half on day one and would raise income tax thresholds for basic and middle earners in line with inflation. Mordaunt has not ruled out an early general election.
Mordaunt confirmed her monetary policy will be on controlling inflation and that supply side reforms will yield a Brexit dividend on investment, infrastructure, incentives and innovation.
Braverman has pledged to remove VAT from energy bills and has promised to cut public spending by tackling inefficiencies, not cutting services, the Evening Standard reports.
She also said the government needs to introduce much more rigour and incentive to get people into work.
“I think there are too many people in this country, for example, who are of working age, of good health and who are choosing not to work full time and they are taking benefits,” she said.
She dubbed the Net Zero climate target “unilateral economic disarmament” and vowed to axe it if elected, The Independent reports.
“The Right has lost its confidence and courage and ability to defend the free market as the fairest way of helping people prosper,” she said in her launch speech.
“It's been undermined by retreating in the face of the Ben & Jerry’s tendency, those who say a business's main priority is social justice, not productivity and profits.”
Badenoch has said she is committed to reducing corporate taxes.
He further vowed to unlock £100 billion of “dead money” by scrapping EU finance rules, criticising the last government for not moving far enough or fast enough.
“Of course, we know fuel bills are high, so I will pause VAT and the green levies for two years while still keeping an eye on making sure we meet net zero targets by 2050,” Zahawi said.
You may have spotted UKBF’s very own Richard Osborne commenting on Zahawi’s pitch to fix the cost of living crisis in this week’s Metro. Here’s what he had to say:
“For the sake of small British businesses – the backbone of our economy – we need to put the infighting aside and focus on helping business owners, practically and realistically, through current import and export challenges, and spiralling costs and inflation.”
“By choosing me, the Conservative Party is sending a signal to those voters that we have listened to your concerns and we have changed. That is the most important thing we need to do now. It is to restore trust,” he told The Telegraph.
Hunt told The Telegraph that he would keep the rise in National Insurance and also proposed a cutting corporation tax to 15%, while removing business rates for five years for the most in-need communities.
@sarky agreed: “Scrap VAT, reduce and simplify taxes, and change the benefit system to encourage working. Once that's done, leave us alone.”
However, @japancool questioned where all the money was coming from for tax cuts. He posted:
“Well, it seems all the candidates (apart from Rishi) are falling over themselves to offer tax cuts. Good in some ways, bad in others. It's all very well offering tax cuts, but where's the money going to come from? And how are they going to bring the deficit down?”
@Newchodge added: “I think the best quote I have heard from any of the contenders so far was from Tugendhat who has said he won't discuss income tax, NI, VAT, corporation tax rises, reductions until he has a proper 10 year economic plan.”
What do you want from the next Conservative leader? And who do you think it’s going to be? Get involved in the discussion thread now.
There are now two candidates left in the running to be the next Conservative leader and prime minister: Liz Truss, the current foreign secretary, and Rishi Sunak, the former chancellor.
Sunak and Truss have gone head-to-head in heated clashes in recent televised debates over issues such as inflation, immigration, taxes and China.
Truss plans to cut taxes from day one and borrow money to boost the economy. Sunak, on the other hand, plans to continue with planned tax increases until inflation is under control and then cut taxes.
We take a closer look at their policies and what they mean for UK business.
This article was updated on 27 July to reflect the latest announcements.
Liz Truss
The current foreign secretary is known for her libertarian views on economics and trade. Truss, 46, is viewed as being on the right of the Conservative party.Leadership pitch
Writing in the Daily Telegraph, Truss confirmed that she would “start cutting taxes from day one” to help people deal with the cost of living.She wrote: “I would reverse the National Insurance increase that came in during April, make sure we keep corporation tax competitive so we can attract business and investment into Britain, and put the Covid debt on a longer term footing.”
Truss has pledged to scrap plans to increase corporation tax to 25 per cent, and reverse Boris Johnson's 1.25 per cent increase to National Insurance designed to pay for the NHS and social care.
Experts have said fiscal plans would cost the Treasury £30billion but she has insisted they will not impact public spending, because she will increase borrowing, Mail Online reports.
Offer to business
Truss intends to get the private sector growing faster than the public sector, with a “long-term plan to bring down the size of the state and the tax burden”.“My plan will secure our future by focusing on economic growth, and getting us back on track towards becoming a high-growth and high-productivity powerhouse. It is built on a clear and long-standing Conservative philosophy, including bold supply-side reform,” she wrote.
Rishi Sunak
The former chancellor is seen as a being on the centre-left of the Conservative party. Sunak, 42, has been criticised by some in the party for presiding over a series of tax rises.Leadership pitch
In a video to launch his candidacy, Sunak billed himself as a serious candidate for serious times. He promised to be a unifying figure in politics.While many rivals have pledged tax cuts, Sunak said he would only deliver tax cuts once inflation had been tamed.
He told The Telegraph: “We will cut taxes and we will do it responsibly. That’s my economic approach. I would describe it as common-sense Thatcherism. I believe that’s what she would have done.”
In Monday’s leadership debate, he claimed Truss would plunge “millions of people into misery” by cutting taxes now, a move he claimed would see a big spike in interest rates and crash the economy, the Financial Times reports.
“In a combative performance, in which he repeatedly interrupted his rival, Sunak said Truss wanted to put £40bn of extra borrowing on the country’s credit card,” the report said.
Sunak has vowed to cut VAT on energy bills. On Tuesday, he announced that the 5% VAT rate on household energy would be scrapped for one year from October, if the price cap on bills rises above £3,000 for the typical household, the BBC reports.
Offer to business
Sunak has pledged business tax reform to boost investment and innovation. He also promised to use the “new freedoms of Brexit” to reform the “mass of regulations, bureaucracy and constraints that too often get in the way”.He said he plans to boost the economy through investment, training and innovation.
Penny Mordaunt – out of the running
The current international trade minister appeals to several wings of the Conservative party. Mordaunt, 49, was a prominent figure in the Vote Leave campaign but is considered socially liberal on certain issues.Leadership pitch
Mordaunt said her ethos was small state and personal responsibility. Her main fiscal rule is that debt as a proportion of GDP should fall over time.The Guardian reports that she would slash VAT on fuel at the pumps by half on day one and would raise income tax thresholds for basic and middle earners in line with inflation. Mordaunt has not ruled out an early general election.
Mordaunt confirmed her monetary policy will be on controlling inflation and that supply side reforms will yield a Brexit dividend on investment, infrastructure, incentives and innovation.
Offer to business
Mordaunt wants to align government planning cycles with the business and charity sectors, which are already aligned. Her pledge to cut fuel VAT will also chime with many business owners.Suella Braverman – out of the running
The former QC barrister and current attorney general is considered a right-wing conservative. Braverman, 42, is seen by many as an “anti-woke” candidate.Leadership pitch
The Guardian summarises Braverman as “a culture warrior who promises to destroy a ‘rights culture’ that has ‘spun out of control’, slash regulations and lead the country out of an ‘identity politics rabbit-hole’”.Braverman has pledged to remove VAT from energy bills and has promised to cut public spending by tackling inefficiencies, not cutting services, the Evening Standard reports.
Offer to business
Braverman has pledged to cut VAT and Corporation tax, the Telegraph reports, and is considering reversing the National Insurance increase.She also said the government needs to introduce much more rigour and incentive to get people into work.
“I think there are too many people in this country, for example, who are of working age, of good health and who are choosing not to work full time and they are taking benefits,” she said.
Kemi Badenoch – out of the running
The former levelling up and equalities minister is considered a right-wing conservative. Badenoch, 42, is also seen as a free speech advocate.Leadership pitch
Badenoch has said she would not enter into a tax cut bidding war with other candidates, as tackling inflation was a key part of her pledge.She dubbed the Net Zero climate target “unilateral economic disarmament” and vowed to axe it if elected, The Independent reports.
Offer to business
Badenoch is a staunch defender of the free market. In her launch speech, she hit out at companies that focus on “social justice” at the expense of profits, The Telegraph reports.“The Right has lost its confidence and courage and ability to defend the free market as the fairest way of helping people prosper,” she said in her launch speech.
“It's been undermined by retreating in the face of the Ben & Jerry’s tendency, those who say a business's main priority is social justice, not productivity and profits.”
Badenoch has said she is committed to reducing corporate taxes.
Tom Tugendhat – out of the running
Tugendhat, 49, is the only candidate with no ministerial experience. The former soldier and current chairman of the commons foreign affairs committee is considered a centre-left Conservative, arguably the most left-leaning candidate.Leadership pitch
Tugendhat has pitched himself as the cost-of-living candidate who will cut taxes, restore trust and heal divisions in politics. He has pledged to cut fuel duty by 10p per litre and reverse the National Insurance rise to help families struggling with rising bills, The Telegraph reports.Offer to business
Tugendhat has promised to cut business taxes to make the UK the most attractive advanced economy in the world for investment within five years. He’s also pledged to carry on the levelling up agenda by setting up institutes of technology in every major UK town and city, The Telegraph reports.He further vowed to unlock £100 billion of “dead money” by scrapping EU finance rules, criticising the last government for not moving far enough or fast enough.
Nadhim Zahawi – out of the running
The newly-appointed chancellor is viewed as a right-wing conservative.Leadership pitch
Zahawi’s pitch centred around reducing taxes. Speaking to LBC, Zahawi made five pledges as part of his leadership pitch:- Cut taxes to reduce the cost of living
- Lower energy bills
- Increase defence spending
- Review Euro bureaucracy to help businesses
- Get tough on crime
Offer to business
Zahawi told Sky News that he would reverse the corporation tax rise and would bring forward the proposed cut to the basic rate of income tax from 20 to 19 pence in the pound.“Of course, we know fuel bills are high, so I will pause VAT and the green levies for two years while still keeping an eye on making sure we meet net zero targets by 2050,” Zahawi said.
You may have spotted UKBF’s very own Richard Osborne commenting on Zahawi’s pitch to fix the cost of living crisis in this week’s Metro. Here’s what he had to say:
“For the sake of small British businesses – the backbone of our economy – we need to put the infighting aside and focus on helping business owners, practically and realistically, through current import and export challenges, and spiralling costs and inflation.”
Jeremy Hunt – out of the running
The former health secretary and current backbench MP is viewed as a liberal conservative. Hunt, 55, is seen by many as having right-wing views on economics, however.Leadership pitch
A big part of Hunt’s pitch was that he is the only major candidate who has not served in Boris Johnson’s government.“By choosing me, the Conservative Party is sending a signal to those voters that we have listened to your concerns and we have changed. That is the most important thing we need to do now. It is to restore trust,” he told The Telegraph.
Offer to business
Hunt promised the lowest rate of business taxes in the western world, the Guardian reports.Hunt told The Telegraph that he would keep the rise in National Insurance and also proposed a cutting corporation tax to 15%, while removing business rates for five years for the most in-need communities.
Thoughts from the UKBF community
UKBF members have had a lot to say on the Conservative leadership contest on the What do you want from Boris Johnson's successor? thread.“Cutting business taxes would be welcomed”
@MOIC said reducing VAT would be welcomed, despite it being a “tough ask”.@sarky agreed: “Scrap VAT, reduce and simplify taxes, and change the benefit system to encourage working. Once that's done, leave us alone.”
However, @japancool questioned where all the money was coming from for tax cuts. He posted:
“Well, it seems all the candidates (apart from Rishi) are falling over themselves to offer tax cuts. Good in some ways, bad in others. It's all very well offering tax cuts, but where's the money going to come from? And how are they going to bring the deficit down?”
@Newchodge added: “I think the best quote I have heard from any of the contenders so far was from Tugendhat who has said he won't discuss income tax, NI, VAT, corporation tax rises, reductions until he has a proper 10 year economic plan.”
“Give apprenticeships the same value as degrees”
@MBE2017 said they would like the next Tory leader to boost apprenticeship schemes and give them the same value as a degree. They added that the retirement age should be reduced to 60 so more jobs were available to younger people.“Scrap Net Zero”
@Elliott Coleman posted that the government should ditch the Net Zero climate change policy and start fracking. He added that National Insurance for the NHS should be optional if people wanted to pay for private healthcare.What do you want from the next Conservative leader? And who do you think it’s going to be? Get involved in the discussion thread now.
