Since the resignation of Boris Johnson, the Conservative Party is in the process of selecting their new leader and with that our next Prime Minister.
MPs have now narrowed down the list of leadership hopefuls to two candidates. And while the new leader of the Conservative Party will also become the next Prime Minister, it will be the grassroots Conservative Party members who will decide.
The winner will be announced on 5 September, which is when we will find out who our new Prime Minister will be. But which of the two candidates will support small businesses?
Will The Next Prime Minister Be Good News For Small Businesses?
With the economy posing big challenges to the next Prime Minister, it is important how the two candidates plan to tackle inflation and boost the UK economy. But will either of the two leadership hopefuls give much-needed support to small businesses?
What Businesses Can Expect From Rishi Sunak As Prime Minister
Small businesses can already judge the former Chancellor by the policies he has introduced while in office. While he has promised to reduce taxes, he first wants to bring inflation under control.
My message is simple: I have a plan to steer our country through these headwinds. Once we have gripped inflation, I will get the tax burden down. It is a question of ‘when’, not ‘if’.Rishi Sunak, Conservative Leadership Candidate
With this strategy, he positioned himself as the “fiscally responsible” candidate. Emphasising that the government debt, which has increased during Covid-19, needs to be paid back without borrowing any more money.
Therefore, he would not reverse any of the policies that he has announced or introduced during his time as chancellor:
- 1.25% increase in National Insurance Contribution will stay in place
- the planned rise in corporation tax from 19% to 25% in 2023 will go ahead (small businesses with profits lower than £50,000 will continue to pay 19%)
- a 1p income tax cut will come in 2024
- introduction of 10 UK freeports, which will have simple taxes and receive import and export tax reliefs
He has also set out a plan to bring the country back on course after the upheaval of the pandemic, should he become our next Prime Minister. The following policies aim to help small businesses:
- promises to reduce taxes, once inflation is under control – he made a pledge to cut income taxes before the end of the next Parliament
- said he wanted to reform the way businesses are taxed, but has not given any details
- having campaigned to leave the EU, he wants to recommend 2,400 EU laws to be scrapped that he claims are hindering businesses
- he has also said he will look at replacing the current GDPR rules to make it easier for UK technology companies to innovate
Rishi Sunak has also committed to the net zero target to reduce emissions by 2050, but has warned that the UK has to be careful not to go too fast, as it would risk alienating people.
How Small Businesses Would Fare Under Liz Truss As The Next Prime Minister
Unlike her rival, Liz Truss is still foreign secretary after she has supported Boris Johnson. She positions herself as the change in leadership the country needs.
I have a plan to make Britain a high-growth economy through bold supply-side reform.Liz Truss, Conservative Leadership Candidate
In contrast to Mr Sunak, Ms Truss advocates cutting taxes and believes that the Government’s Covid debts should be paid back over a longer period of time to avoid damaging economic growth.
If she will be our next Prime Minister, her plans for the UK include:
- reversing the recent rise in National Insurance Contributions that the former Chancellor has brought in
- scrapping the planned rise in corporation tax, which is planned to take effect in 2023
- suspending the “green levy”, which is a levy on people’s energy bills that pays for green projects and helps poorer families with their heating bills
- introducing tax changes, so it is easier for people to stay at home to care for children or relatives
- creating new “low-tax and low-regulation zones” throughout the country as hubs for innovation and enterprise
To pay for all the tax cuts she is proposing, which are said to cost the Treasury billions, she wants to pay back Covid debts over a longer period.
Although Ms Truss has campaigned to remain in the EU, she claims that she can be trusted with Brexit. As foreign secretary she has been responsible for introducing changes to the Northern Ireland Protocol, which are still hotly debated.
While she has also committed to the net zero target set by the current Government, she too is cautious. Emphasising that the country needs to find a better way to meet the target without harming people and businesses.
Whoever will be our next Prime Minister will face a wide range of challenges in terms of the economy, cost-of-living crisis, the climate and Brexit.
While both candidates want to boost the economy and reduce taxes, Mr Sunak’s approach seems more cautious than Ms Truss’. But we will only really know how small businesses fare under the next Prime Minister, when we see actions rather than words.