Nadhim Zahawi is set to scrap Rishi Sunak’s corporation tax increases in bid to boost the economy 

• The new Chancellor may reverse Rishi Sunak’s  six per cent corporation tax rise
• A source says that Nadhim Zahawi is set to cut taxes to boost the economy
• In an interview he said taxes will have to go up and next year will be ‘really hard’

Nadhim Zahawi is planning to reverse Rishi Sunak’s corporation tax rises, sources said tonight.

The new Chancellor vowed to cut taxes and boost the economy in his first day in the job after being promoted from education secretary.

It is understood that Mr Zahawi is drawing up a new economic strategy with Andrew Griffith, the head of the PM’s Policy Unit, with a big economic reset speech likely as soon as tomorrow that could promise to cut taxes, as well as deregulation, to turbocharge the economy.

The PM’s parliamentary aide James Duddridge last night said there would be ‘tax cuts next week’ as part of the new plan.

Mr Zahawi, 55, was put in charge of the Treasury late on Tuesday night after Mr Sunak’s shock resignation. By early this morning he was already setting out his priorities.

New Chancellor Nadhim Zahawi (pictured outside the Treasury) is set to scrap Rishi Sunak’s corporation tax rises to help the economy, a sources said

Nadhim Zahawi took his place next to Boris Johnson during Prime Minister’s Questions today, but Rishi Sunak was not present

Asked what his plans were for corporation tax – which is levied on businesses’ profits and is due to rise from 19 per cent to 25 per cent next year under his predecessor’s plan – Mr Zahawi replied: ‘There’s nothing off the table. I want to be one of the most competitive countries in the world for investment.

‘When boards around the world make investment decisions… the one tax they can compare globally is corporation tax.

‘I want to make sure that we are as competitive as we can be whilst maintaining fiscal discipline.’ He told Sky News: ‘My task is to rebuild and grow the economy. I will look at everything to make sure we continue to be on the side of people.’

Mr Zahawi’s first day in No 11 also coincided with a rise in the threshold at which workers start paying National Insurance, amounting to a tax cut for millions.

But he admitted taxes will have to go up – and that next year will be ‘really hard’ as attempts to recover from the pandemic are buffeted by rising energy and food prices worsened by the war in Ukraine.

Denying he had been given the job just to deliver tax cuts, he told BBC Radio 4’s Today programme: ‘I’ve been appointed because I will be evidence-led and my focus is to rebuild the economy and then return to growth.’

He promised: ‘I’ll come back on your programme and happily talk about where I think we can do more on taxes. We are determined to do that, as was my predecessor.’

Mr Zahawi also denied that he threatened to resign in order to secure his promotion to Chancellor.

Asked if Foreign Secretary Liz Truss had been in line for the job until he said he would step down, Mr Zahawi told Sky News: ‘That is not true.’

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