London Daily

Focus on the big picture.
Saturday, Jan 24, 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
Starmer Breaks Diplomatic Restraint With Firm Rebuke of Trump, Seizing Chance to Advocate for Europe
UK Finance Minister Reeves to Join Starmer on China Visit to Bolster Trade and Economic Ties
Prince Harry Says Sacrifices of NATO Forces in Afghanistan Deserve ‘Respect’ After Trump Remarks
Barron Trump Emerges as Key Remote Witness in UK Assault and Rape Trial
Boston Dynamics Atlas humanoid robot and LG CLOiD home robot: the platform lock-in fight to control Physical AI
United States under President Donald Trump completes withdrawal from the World Health Organization: health sovereignty versus global outbreak early-warning access
FBI and U.S. prosecutors vs Ryan Wedding’s transnational cocaine-smuggling network: the fight over witness-killing and cross-border enforcement
Trump Administration’s Iran Military Buildup and Sanctions Campaign Puts Deterrence Credibility on the Line
Apple and OpenAI Chase Screenless AI Wearables as the Post-iPhone Interface Battle Heats Up
Tech Brief: AI Compute, Chips, and Platform Power Moves Driving Today’s Market Narrative
NATO’s Stress Test Under Trump: Alliance Credibility, Burden-Sharing, and the Fight Over Strategic Territory
OpenAI’s Money Problem: Explosive Growth, Even Faster Costs, and a Race to Stay Ahead
Trump Reverses Course and Criticises UK-Mauritius Chagos Islands Agreement
Elizabeth Hurley Tells UK Court of ‘Brutal’ Invasion of Privacy in Phone Hacking Case
UK Bond Yields Climb as Report Fuels Speculation Over Andy Burnham’s Return to Parliament
America’s Venezuela Oil Grip Meets China’s Demand: Market Power, Legal Shockwaves, and the New Rules of Energy Leverage
TikTok’s U.S. Escape Plan: National Security Firewall or Political Theater With a Price Tag?
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
Trump’s Board of Peace: Breakthrough Diplomacy or a Hostile Takeover of Global Order?
The Greenland Gambit: Economic Genius or Political Farce?
The Greenland Gambit: Economic Genius or Political Farce?
The Greenland Gambit: Economic Genius or Political Farce?
Will AI Finally Make Blue-Collar Workers Rich—or Is This Just Elite Tech Spin?
Prince William to Make Official Visit to Saudi Arabia in February
Prince Harry Breaks Down in London Court, Says UK Tabloids Have Made Meghan Markle’s Life ‘Absolute Misery’
Malin + Goetz UK Business Enters Administration, All Stores Close
EU and UK Reject Trump’s Greenland-Linked Tariff Threats and Pledge Unified Response
UK Deepfake Crackdown Puts Intense Pressure on Musk’s Grok AI After Surge in Non-Consensual Explicit Images
Prince Harry Becomes Emotional in London Court, Invokes Memory of Princess Diana in Testimony Against UK Tabloids
UK Inflation Rises Unexpectedly but Interest Rate Cuts Still Seen as Likely
AI vs Work: The Battle Over Who Controls the Future of Labor
Buying an Ally’s Territory: Strategic Genius or Geopolitical Breakdown?
AI Everywhere: Power, Money, War, and the Race to Control the Future
Trump vs the World Order: Disruption Genius or Global Arsonist?
Trump vs the World Order: Disruption Genius or Global Arsonist?
Trump vs the World Order: Disruption Genius or Global Arsonist?
Trump vs the World Order: Disruption Genius or Global Arsonist?
Arctic Power Grab: Security Chessboard or Climate Crime Scene?
Starmer Steps Back from Trump’s ‘Board of Peace’ Amid Strained US–UK Relations
Prince Harry’s Lawyer Tells UK Court Daily Mail Was Complicit in Unlawful Privacy Invasions
UK Government Approves China’s ‘Mega Embassy’ in London Amid Debate Over Security and Diplomacy
Trump Cites UK’s Chagos Islands Sovereignty Shift as Justification for Pursuing Greenland Acquisition
UK Government Weighs Australia-Style Social Media Ban for Under-Sixteens Amid Rising Concern Over Online Harm
Trump Aides Say U.S. Has Discussed Offering Asylum to British Jews Amid Growing Antisemitism Concerns
UK Seeks Diplomatic De-escalation with Trump Over Greenland Tariff Threat
Prince Harry Returns to London as High Court Trial Begins Over Alleged Illegal Tabloid Snooping
High-Speed Train Collision in Southern Spain Kills at Least Twenty-One and Injures Scores
Meghan Markle May Return to the U.K. This Summer as Security Review Advances
Trump’s Greenland Tariff Threat Sparks EU Response and Risks Deep Transatlantic Rift
Prince Harry’s High Court Battle With Daily Mail Publisher Begins in London
×