British Chancellor of the Exchequer Nadim Al-Zahawi said he is working on additional measures to help families and businesses increase their energy bills.
Zahawi said in an interview with Bloomberg TV on Monday that the proposals would help the country’s next prime minister “escape” after the ruling party leadership vote ends next week. He said small businesses, in particular, are likely to need help due to the energy crisis gripping the UK and other European countries.
Zahawi’s comments come as economic headwinds mount against the UK, with the Bank of England predicting a recession lasting more than a year amid rising inflation. In addition to the gloom, regulator Ofgem said Friday that the ceiling on household energy bills will rise in October to nearly triple the level of last winter, adding to the misery of Britons already grappling with the cost of living crisis.
Al-Zahawi is facing obstacles in what he can do to help consumers due to the government’s promise not to make big tax decisions as a leadership contest is being held to determine who will succeed Boris Johnson as prime minister next month. He is working on the political choices that the two remaining contenders, Liz Truss or Rishi Sunak, could apply if they seize power.
Truss, the favorite, has promised to cut taxes and collect green fees from energy bills, but so far she hasn’t detailed how she will help low-income people and retirees who will benefit less from her plans. Meanwhile, Sunak has pledged more support for those groups, but has yet to say to what extent.
Zahawi, who supports Truss, could end up being one of Britain’s longest-standing advisers, even if the foreign secretary emerges victorious. This is because Business Secretary Kwasi Quarting is highly recommended by Conservative Party insiders as an advisor to Truss. Al-Zahawi took office only in July after Sunak left his post, helping trigger a series of ministerial resignations that led to the downfall of the prime minister himself.
Asked whether higher government spending to help with the energy crisis would exacerbate inflation, Al-Zahawi said the UK had room for additional capital spending and would maintain fiscal discipline. It also supported the Bank of England’s efforts to tame rates.
“I am confident that the governor has the tools at his disposal to be able to contain inflation as well,” the minister said, also noting that the bank is independent.
The winner of the driving contest will be announced on September 5 and Johnson will take charge the following day.
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