UK markets closed
  • NIKKEI 225

    +165.67 (+0.50%)

    +49.44 (+0.29%)

    -1.97 (-2.53%)

    -6.50 (-0.31%)
  • DOW

    +240.22 (+0.68%)
  • Bitcoin GBP

    -44.55 (-0.15%)
  • CMC Crypto 200

    -3.70 (-0.47%)
  • NASDAQ Composite

    -113.72 (-0.80%)
  • UK FTSE All Share

    +5.91 (+0.15%)

Truss must take ‘decisive action’ to help firms over inflation, trade bodies say

Business groups have called for “decisive action” from the next prime minister Liz Truss to avoid company failures as they tackle rocketing energy bills.

Ms Truss promised supporters a “bold plan” to cut taxes and deal with the energy crisis after winning the Tory leadership race ahead of Rishi Sunak on Monday.

The new leader of the Conservative Party, who will meet the Queen on Tuesday for her formal handover to become prime minister, has previously outlined plans to scrap Mr Sunak’s proposed corporation tax and implement other tax reductions for firms.

On Monday, numerous business groups congratulated the current Foreign Secretary on her appointment but demanded urgent action to help UK industry amid spiralling inflation and waning spending power among consumers.

Stephen Phipson, chief executive officer of manufacturers’ body Make UK, said: “We congratulate Liz Truss on her appointment and look forward to discussing the critical importance of manufacturing, a sector that delivers millions of well-paid, highly-skilled jobs across the whole of the UK.

“But industry at this time needs decisive action from the new government to help it through a prolonged period of unprecedented hikes in energy bills, rising cost of raw materials and critical labour shortages in order to keep Britain’s place as a leader of innovation on the world stage.”

Earlier on Monday, the latest monthly S&P Global/CIPS UK services PMI survey suggested a worse-than-expected performance by country’s service sector last month.

Firms reported the slowest pace of growth for a year and a half as the rising cost-of-living weighed on customers.

Kate Nicholls, chief executive officer of UKHospitality, said the trade group is keen to work closely with Ms Truss and her cabinet “as we strive to save the hospitality industry”.

The trade group boss said: “The new government must act quickly and decisively to address the soaring energy bills that are facing consumers and businesses.

“With the right package of support – including a reduction in the headline rate of VAT for the sector to 12.5%, a business rates holiday, the deferral of all environmental levies, the reinstatement of a HMRC Time to Pay scheme and the reintroduction of a trade credit insurance scheme for energy – the sector will be well-placed to aid growth through generating jobs and local investment.”

During her acceptance speech, the new leader said she would cut taxes in a bid to grow the UK economy over the coming years.

It comes despite the latest projections from the Bank of England warning that the UK could face a recession over five successive quarters.

Elsewhere, the British Retail Consortium (BRC) called for Ms Truss and her cabinet for action on business rates, the property tax facing high street businesses.

“Businesses need clarity on the government’s intentions as soon as possible so they can understand the inflationary impact of any policy decisions,” Helen Dickinson, chief executive of the BRC, said.

“One immediate way the Government can help retailers support their customers is to freeze the business rates multiplier for all retail businesses for the next financial year, protecting the industry from rates increases linked to inflation, and giving greater scope to hold down prices, protect jobs, and support the economy.”