New Chancellor Nadhim Zahawi has said he will review UK Government plans to hike corporation tax next year.
The former Education Secretary posed for photographers outside the door to his new office on 1 Horse Guards Road after Rishi Sunak's shock resignation yesterday evening.
He said “everything is on the table” when questioned over the tax increase.
The corporation tax rate is set to increase from 19p to 25p in April as part of a move designed to raise around £17bn each year for Treasury coffers.
However, it is thought this could now be reassessed as the Prime Minister’s future comes under pressure from ministers.
Boris Johnson could call on the new Chancellor to cut taxes or roll back the planned increase to win back votes, despite potential repercussions for the Treasury finances.
Zahawi told Times Radio: “The responsible thing to do is make sure we have fiscal discipline because we need to keep inflation under control.
“But nothing is off the table – I will look at everything.
“When boards invest they invest for the long-term and they do compare corporation tax rates, so I will look at everything.”
In Sunak’s resignation letter, he said he could not agree an economic strategy with Johnson because their stances are “fundamentally too different”.
It comes after the Office for National Statistics reported a rise in Consumer Price Index inflation to 9.1% in May, with predictions this will increase as high as 11% later this year.
“I have to make sure I deliver for those who are hard-pressed today and of course bring inflation under control,” former education secretary Zahawi said.
“Inflation is deeply damaging if it gets out of control.”
Speaking on BBC Radio 4's Today programme this morning, Zahawi countered talk of tax increases by stating: “We’ve had £407bn input to help the economy and people’s livelihoods and life to get through the pandemic.
“We’ve just come out of the equivalent of a world war, we have to rebuild the economy and return to growth.
“We are determined to do that, as was my predecessor – he was determined to do that on personal taxation, and of course on other taxes as well.”
He told the programme that his task is to rebuild the economy and return to growth.
“But 2023 is going to be really hard for us. I described that in my earlier remarks. But of course I will continue to share that evidence. I want to make sure we bear down on inflation,” he said.
Who is Nadhim Zahawi?
Born in Iraq to a Kurdish family, Zahawi came to the UK as a nine-year-old when his parents fled the regime of Saddam Hussein.
Believed to now be one of the richest politicians in the House of Commons, he helped found polling company YouGov after studying chemical engineering at University College London.
He has often said that his own personal backstory has deeply influenced his view of Britain and he recently spoke of the debt he owed poet Philip Larkin as he improved his English as a teenager.
Seen as a “safe pair of hands”, he came to the Education Secretary role following the sacking of Gavin Williamson, who had become unpopular with the public over the exams fiasco during the pandemic.
Zahawi's tenure in the role has not been without difficulty and in recent weeks he had been attempting to see off potential strike action by teachers, which he has labelled “unforgivable” months after children returned to school following the disruption of the pandemic.
He became a junior education minister under Theresa May, but his loyalty to Boris Johnson has never seriously wavered.
Johnson has insisted he will not leave No 10, despite a mounting revolt against his leadership.
Ministers and aides have continued to submit their resignations, while support is ebbing away from the Prime Minister among previously-loyal MPs.
But Johnson is understood to have told allies that he is “not going anywhere” and his critics should “calm down”.
On Wednesday morning, Robin Walker resigned as schools standards minister, telling the Prime Minister the “great achievements” of the government have become “overshadowed by mistakes and questions about integrity”.
Will Quince quit as children and families minister, saying he could not accept being sent out to defend the Prime Minister on television with inaccurate information over the Chris Pincher row.
Treasury economic secretary John Glen quit, telling the Prime Minister he could not reconcile staying in the job with “the complete lack of confidence I have in your continuing leadership of our country”.
Victoria Atkins resigned as a minister in the Ministry of Justice, telling Johnson: “I can no longer pirouette around our fractured values. We can and must do better than this.”
Laura Trott resigned as a ministerial aide, saying “trust in politics is – and must always be – of the utmost importance, but sadly in recent months this has been lost”, while Felicity Buchan also stood down as a parliamentary private secretary, calling for “fresh leadership”.
Their resignations followed a string of departures from the government on Tuesday evening, led by Rishi Sunak and Sajid Javid, who delivered broadsides at Johnson as they quit their Cabinet posts.
Former health secretary Javid is expected to add to Johnson’s problems with a personal statement in the Commons on Wednesday.
Education Select Committee chairman Rob Halfon, one of those who will question the Prime Minister, said he would back a change in leadership, criticising not only a “real loss of integrity” but also “a failure of policy”.
But Johnson told friends he will continue to “smash on and deliver for the people who gave us a massive mandate”, the Daily Mail reported.
“Everyone just needs to calm down, stop bickering and let us get on with the job in hand.”
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