London Daily

Focus on the big picture.
Sunday, Apr 05, 2026

Rishi Sunak vows to cut taxes for business to tackle cost of living crisis

Rishi Sunak vows to cut taxes for business to tackle cost of living crisis

Chancellor to urge investment in innovation at CBI speech as UK inflation soars to 9%

Rishi Sunak has vowed to cut taxes for business in his autumn budget, as the Treasury continues to weigh up interventions to tackle the cost of living.

With MPs from across the Tory party urging him to take emergency action to help struggling families after inflation hit a 40-year high of 9%, Sunak will tell business leaders at the CBI dinner, “never, ever doubt we are on your side”.

During the speech on Wednesday night, he will call for more investment in innovation to grow the economy – and say the government will cut taxes to enable business to do so.

“We need you to invest more, train more and innovate more,” the chancellor will say. “In the autumn budget we will cut your taxes to encourage you to do all those things. That is the path to higher productivity, higher living standards and a more prosperous and secure future.”

The CBI has been calling for more generous allowances, to allow companies to write off more of the cost of investment against their tax bill.

Sunak introduced a “super deduction” to incentivise investment, but that is due to end in April next year, just as the corporation tax rate is due to increase, from 19% to 23%.

The chancellor is expected to say that the government will act to tackle inflation as well as supporting people into better paid jobs, setting out a three-point plan on the cost of living, boosting growth and investment.

Boris Johnson came under pressure from the Labour leader, Keir Starmer, at prime minister’s questions on Wednesday about the government’s failure to do more to help hard-pressed consumers.

Urging the prime minister to impose a windfall tax on energy companies, Starmer said, “He just doesn’t get it, does he? He doesn’t actually understand what working families are going through in this country, struggling about how they are going to pay their bills.

Starmer went on: “He’s on the side of excess profits for oil and gas companies. We’re on the side of working people. And there you have it.”


Johnson and Sunak have held a series of meetings aimed at thrashing out a package of measures to ease the cost of living crisis.

Options under consideration include a 1p income tax cut from the autumn or a potential VAT cut, but new measures to help with the cost-of-living could come sooner, including an increase in the warm homes discount for the poorest families.

The scheme operates via energy companies, and saw bills cut by £140 last winter. The Treasury could broaden the number of households covered, and boost its value, perhaps by up to £500, as energy bills surge again in October.

In his speech, Sunak will stress that the government cannot wholly offset the sharp increase in prices, which has been driven by household fuel bills, but also the rising cost of goods including food.

“I cannot pretend this will be easy. As I told the House of Commons yesterday: there is no measure any government could take, no law we could pass, that can make these global forces disappear overnight. The next few months will be tough,” he will say.

He is expected to stress measures the government has already taken, including the fuel duty cut, council tax discounts and the change to the universal credit taper rate as well as the national minimum wage increase.

“As the situation evolves our response will evolve. I have always been clear, we stand ready to do more,” he will say.

The Treasury said the comments would flesh out pledges in Sunak’s Mais lecture, where he said the priority for tax cuts would be on business investment. He said the overall tax treatment of capital investment was much less generous than the OECD average.

“It is unclear that cutting the headline corporation tax rate did lead to a step change in business investment; we need our future tax policy to be targeted and strategic,” he said at the lecture. “So as I develop a business tax strategy for the years ahead, it seems likely to me that a priority will be to cut taxes on business investment.”

Last year the government announced its intention to increase the headline rate of corporation tax, the tax businesses pay on their profits. That is scheduled to rise to 25% for company profits over £250,000 from April 2023 – though it was announced alongside investment incentives.

MPs told the Commons on Tuesday that some of their constituents were turning to shoplifting for essentials, while another warned that he had heard of cases of attempted suicide among those who could not afford to make ends meet.

As MPs continued to debate the Queen’s speech on Tuesday, Conservatives from across the party called for more action on the cost of living. Bernard Jenkin, who chairs the Commons liaison committee, laid out what he said was a £13.5bn package of policies, including restoring the £20 uplift in universal credit made during the pandemic.

“A summer package to rescue the most vulnerable households is needed to avoid real financial distress and personal anguish and to support economic demand of the most vulnerable households, or we are creating possibly a worse recession than is already expected,” he said.

Newsletter

Related Articles

0:00
0:00
Close
UK Food Halls Defy Hospitality Slowdown, Emerging as Bright Spot in Challenging Market
UK Sets Firm Conditions for Military Action, Insisting on Legal Mandate and Clear Strategy
UK Medicines Regulator Launches Probe into Peptide Clinics Over Health Claims
New North Sea Drilling Unlikely to Significantly Cut UK Gas Imports, Analysis Finds
Woman Linked to UK’s First All-Female Terror Plot Faces Deportation
Downed US Aircraft Over Iran Linked to Operations from UK Airfield
Two Men and Teen Detained in UK Following Attack on Jewish Charity Ambulance
UK Police Launch Inquiry After Firearms Left Unattended Outside Mayor’s Residence
Giuffre Family Calls on King Charles to Meet Epstein Survivors During US Visit
Amber Wind Warning Issued as Storm Dave Approaches Parts of the United Kingdom
Prince Harry and Meghan’s Australia Visit Set to Draw Heightened Global Attention
UK Considers Entry Fees for Overseas Visitors at Major Museums Ahead of 2026 Travel Season
UK Prime Minister and Kuwait Crown Prince Coordinate Security Response After Regional Escalation
Calls Grow to Expand Fully Paid Maternity Leave for UK Teachers Amid Workforce Pressures
UK Secures Tariff-Free Access to US Market in Landmark Pharmaceuticals Agreement
Trump Projects Strength in Critique of UK Leadership and Naval Readiness
UK FinTech Setback as VibePay and Smartlayer Cease Operations Amid Funding Pressures
UK Leads Global Coalition of Over Forty Nations to Address Strait of Hormuz Crisis
UK Firms Urged to Accelerate Preparation as New Sustainability Reporting Rules Take Shape
UK Moves Rapid Sentry Air Defence System to Kuwait After Drone Strike Escalation
Transatlantic Relations Tested as UK Seeks Balance While Trump Reshapes Strategic Approach
Trump’s Strategic Pressure on UK Seen as Push for Stronger Alignment and Fairer Terms
UK Focuses on Trade Finance to Secure Critical Materials for Defence and Energy Sectors
Majority of UK Businesses Hit by Middle East Conflict While Confidence Holds Firm
UK Royal Navy Faces Renewed Scrutiny as Debate Intensifies Over Capability and Readiness
Reform UK Faces Mounting Distractions as Policy Agenda Struggles to Gain Traction
Investigation Launched Into Northern Cyprus IVF Clinics After UK Families Receive Incorrect Sperm
International Meeting Issues Unified Call to Safeguard Navigation Through Strait of Hormuz
Potential Strait of Hormuz Closure Raises Concerns Over UK Food and Medicine Supply Chains
UK Leads Coalition of Over Forty Nations Urging Iran to Reopen Strait of Hormuz
UK Secures Tariff-Free Access for Medicines in Landmark US Pharma Trade Agreement
King Charles III Invited to Address Joint Session of U.S. Congress in Rare Diplomatic Honor
Debate Grows Over Whether Expanded North Sea Drilling Can Reduce UK Energy Bills
UK Faces Heightened Risk of Jet Fuel Shortages, Airline Chief Warns
UK Ends Police Investigations into Lawful Social Media Posts After Review Finds Overreach
Abramovich Moves to Establish Charity for Frozen Chelsea Sale Proceeds Amid UK Dispute
Starmer Reaffirms NATO Commitment While Responding to Trump’s Strategic Critique
UK Aid Reductions Raise Fears of Severe Human Impact Across Parts of Africa
UK Signals Renewed Push for EU Cooperation as Iran Conflict Reshapes Security Landscape
Bank of England Signals Caution as Bailey Advises Markets Against Expecting Rate Hikes
UK to Convene Global Coalition to Restore Shipping Through Strait of Hormuz
Trump Signals Possible NATO Reassessment, Emphasizes Stronger U.S. Strategic Autonomy
Australia Joins British-Led Efforts to Reopen Strait of Hormuz Amid Escalating Tensions
King Charles Plans US State Visit as UK Strengthens Ties with Trump Leadership
UK Regulator Launches Investigation Into Microsoft’s Business Software Practices
Kanye West Set for High-Profile Return to UK Stage at Wireless Festival
Trump Presses Europe to Strengthen Commitment as Iran Conflict Escalates
UK to Deploy Additional Troops to Middle East Amid Rising Regional Tensions
UK Authorities Face Claims of Heavy-Handed Measures in Monitoring Released Pro-Palestine Activists
Trump Calls on UK to Secure Its Own Energy as Iran Conflict Intensifies
×