London Daily

Focus on the big picture.
Monday, Sep 07, 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
University of Bristol Opens £500 Million Innovation Campus
Families Give Evidence to Independent Review of Sussex Maternity Failures
Sweden Confirms Deportation of 458 British Citizens Over Post-Brexit Residency Rules
UK Launches £3 Million Challenge for Long-Duration Energy Storage
Reform UK Proposes £100 Billion in Spending Cuts and Brownfield Deregulation
Andy Burnham Warns Macron That EU Procurement Rules Could Hurt British Steel
Andy Burnham Faces Major Decision on Future North Sea Oil and Gas Drilling
SEND Support in England Projected to Reach One in 10 Pupils
England’s Housing Courts Struggle With Surge in No-Fault Eviction Cases
Violent Clashes Erupt in Portsmouth During Protest Against Asylum Processing
Three-Quarters of NHS Emergency Staff Report Regular Violence or Aggression
UK Considers Converting Female Prison Space for Male Inmates as Overcrowding Worsens
UK House Prices Record First Annual Decline in Nearly Three Years
UK Government Reassesses Policy Toward Israel Amid Calls for Diplomatic Shift
Reform UK Faces Police Scrutiny Over Alleged Foreign Donations Scheme
University of Bristol Opens £500 Million Temple Quarter Enterprise Campus
Online Bookmakers Accused of Privacy Breaches Through Cookie Consent Practices
Health Campaigners Urge UK Government to Abandon U.S. Pharmaceutical Agreement
Three-Quarters of UK A&E Staff Report Regular Violence or Aggression
Far-Right Demonstrations Target Portsmouth as Small-Boat Crossings Fuel Tensions
UK Records Hottest Summer on Record After Severe Heatwaves
UK Travellers Face Renewed EU Border Delays as Temporary Flexibility Ends
UK Rejects Calls to Pause AI Data Centre Expansion Despite Energy Concerns
UK Defence Figures Push for 3% Spending Target Amid Falklands Concerns
England Faces Rising Financial Pressure as Special Educational Needs Plans Surge
Metropolitan Police Consider Reform UK Probe Over Overseas Donations
Keir Starmer to Leave Parliament, Triggering By-Election
UK Treasury Weighs Windfall Taxes on Banks and Oil Companies Amid Bond Market Turmoil
Jaguar Land Rover to Cut Thousands of Jobs as UK Government Rules Out Bailout
OpenAI Unveils GPT-6 and Says: "We May Already Have Reached AGI"
Congressman Accused Andrew of Sex Crimes in the United States
Donald Trump: "I'm Glad Harry and Meghan Left the United States"
Spicy Food Is Linked to Lower Death Risk — but It Is Not a Miracle Cure
AfD Enters Saxony-Anhalt Election at 41% in Historic Test for German Politics
Gen Z Turns to Investing as America's First-Home Dream Moves Further Out of Reach
Thousands Join London March Calling for Tighter Abortion Restrictions
Institute of Directors Says Tax and Regulatory Uncertainty Still Weighs on UK Investment
Bank of England Faces Rate Dilemma as Weak Growth and Persistent Inflation Raise Stagflation Risks
Masked Anti-Immigration Protesters Block Roads to Port of Dover
Prime Minister Andy Burnham Sets Out Devolution and Re-Industrialisation Agenda
British Chambers of Commerce Forecasts UK Growth of Just 1% Through 2027
UK Government Advances Bill to Tighten Rules on Overseas Political Donations
Nigel Farage Faces Scrutiny Over Alleged Reform UK Donation-Law Evasion
Thousands Join Anti-Abortion March Through Central London
UK Beekeepers Call for Nationwide Tracking as Asian Hornet Sightings Increase
England Sees Sharp Rise in Property Subsidence Claims After Record Summer Heat
House of Lords Advances Financial Services Reform Bill
House of Lords Begins Detailed Scrutiny of Railways Bill and Great British Railways Plan
UK Treasury Cuts Green Book Discount Rate to Support More Regional Infrastructure Projects
Reform UK Suspends Two Senior Aides After Undercover Report on Foreign Donation Rules
×