Rishi Sunak is set to become Britain's 57th Prime Minister and the first of Asian descent. Here’s a look at what UK business owners can expect from the new PM.
Business leaders have broadly welcomed the news that Rishi Sunak will become the next Prime Minister – but warned that he must end the political and economic uncertainty.
Financial markets rallied sharply following Monday’s announcement that Sunak would succeed Prime Minister Liz Truss, whose brief premiership plunged the UK into economic turmoil.
In the wake of the news, the British Chamber of Commerce (BCC) called on Sunak to set out fully costed plans to deal with the big issues facing businesses; soaring energy bills, labour shortages, spiralling inflation and climbing interest rates.
“We cannot afford to see any more flip-flopping on policies – the UK’s businesses need a sustainable, long-term economic plan they can believe in,” said Shevaun Haviland, director general of the BCC.
Kate Nicholls, chief executive of UKHospitality, urged Sunak to extend business rates relief, reform the entire business rates system in the longer term and lower the current rate of VAT.
In his victory speech, Sunak said the UK faced a “profound economic challenge”:
"We now need stability and unity, and I will make it my utmost priority to bring our party and our country together”.
According to his website, Sunak co-founded a large investment firm, working with companies from Silicon Valley to Bangalore. He then used that experience to help British companies grow successfully.
The government is due to make a fiscal announcement on 17th November (this was expected on 31st October but has since been delayed) setting out the new administration’s plans. Here’s a round-up of what we might expect.
Sunak pledged to drop the bottom rate of income tax from 20% to 16% but insisted he would only do so prudently, meaning it would not happen until the end of the next parliament, The Telegraph reports.
The Times reports that Sunak might reverse Truss’s cut to national insurance and go back to his original plan to increase the tax by 1.25%. Income tax thresholds will stay frozen and Sunak will probably extend the windfall tax on oil and gas producers to other energy firms who have benefited from high prices.
It’s not yet clear what business support Sunak will set out.
The BCC said he “must provide more certainty on the energy support package for businesses and quickly communicate how the system will work from April”, adding that firms need to know what support to expect in the medium and long term.
In August, Sunak promised to "keep Brexit safe" and set up a new governmental unit to review EU regulations that still apply in British law. He also refused to rule out Britain's withdrawal from the European Court of Human Rights, Reuters reports.
On planning, Sunak pledged to make it harder for developers to build on greenfield sites if they had land for housing they were yet to build on and said he would review planning laws to stop local authorities from requesting changes to greenbelt boundaries. Sunak is also likely to revisit the investment zones.
Business leaders have broadly welcomed the news that Rishi Sunak will become the next Prime Minister – but warned that he must end the political and economic uncertainty.
Financial markets rallied sharply following Monday’s announcement that Sunak would succeed Prime Minister Liz Truss, whose brief premiership plunged the UK into economic turmoil.
In the wake of the news, the British Chamber of Commerce (BCC) called on Sunak to set out fully costed plans to deal with the big issues facing businesses; soaring energy bills, labour shortages, spiralling inflation and climbing interest rates.
“We cannot afford to see any more flip-flopping on policies – the UK’s businesses need a sustainable, long-term economic plan they can believe in,” said Shevaun Haviland, director general of the BCC.
Kate Nicholls, chief executive of UKHospitality, urged Sunak to extend business rates relief, reform the entire business rates system in the longer term and lower the current rate of VAT.
In his victory speech, Sunak said the UK faced a “profound economic challenge”:
"We now need stability and unity, and I will make it my utmost priority to bring our party and our country together”.
What does Sunak mean for UK business?
Sunak had a successful career in business and finance before entering into politics and is respected in the business world.According to his website, Sunak co-founded a large investment firm, working with companies from Silicon Valley to Bangalore. He then used that experience to help British companies grow successfully.
The government is due to make a fiscal announcement on 17th November (this was expected on 31st October but has since been delayed) setting out the new administration’s plans. Here’s a round-up of what we might expect.
Tax agenda
During the leadership race, Sunak presented himself as a traditional low-tax Tory. However, he was much more cautious than Liz Truss and said he would only cut taxes once inflation was under control.Sunak pledged to drop the bottom rate of income tax from 20% to 16% but insisted he would only do so prudently, meaning it would not happen until the end of the next parliament, The Telegraph reports.
The Times reports that Sunak might reverse Truss’s cut to national insurance and go back to his original plan to increase the tax by 1.25%. Income tax thresholds will stay frozen and Sunak will probably extend the windfall tax on oil and gas producers to other energy firms who have benefited from high prices.
Cost of living crisis
Truss announced that businesses would get support with their energy bills for six months. There is now nervousness about whether the new administration will extend help beyond April 2023, The Guardian reports.It’s not yet clear what business support Sunak will set out.
The BCC said he “must provide more certainty on the energy support package for businesses and quickly communicate how the system will work from April”, adding that firms need to know what support to expect in the medium and long term.
Brexit
Sunak voted to leave the European Union in the Brexit referendum and committed to “scrapping all EU laws that hold the economy back” in his leadership campaign.In August, Sunak promised to "keep Brexit safe" and set up a new governmental unit to review EU regulations that still apply in British law. He also refused to rule out Britain's withdrawal from the European Court of Human Rights, Reuters reports.
Kickstarting growth
Truss’s growth tactics included ending the fracking ban, relaxing planning rules, scrapping some environmental protections and creating new investment zones.On planning, Sunak pledged to make it harder for developers to build on greenfield sites if they had land for housing they were yet to build on and said he would review planning laws to stop local authorities from requesting changes to greenbelt boundaries. Sunak is also likely to revisit the investment zones.
