As the former chancellor of the exchequer Rishi Sunak and current Foreign Minister Liz Truss campaign for Conservative members’ votes, sole traders, the self-employed and business owners are wondering which one is the most business friendly? That is of course if they abide by their policy statements – and we must remember they are politicians.

Some of the headline differences do not have a particular bearing on business such as trans rights, immigration via boats in the English Channel or to a certain extent Chinese military expansion. Both are committed to supporting Ukraine in the war against Russia which is in line with the Boris Johnson administration. The war has had a big effect on European economies in the main but there is a knock-on effect to the UK but not as big as say to Germany where decades long policies have been torn up as Putin turns off the gas supplies.

The main difference between Rishi and Liz has been over tax cuts with the Foreign Secretary stating that tax cuts are vital now due to the rise in the cost of living. Reversing the increase in National Insurance and the rise in Corporation Tax will certainly help the economy in the short term as will cutting VAT on energy bills. That is one policy now adopted by Rishi Sunak who has said he would bring in tax cuts when inflation was under control.

Under Truss the economy would get a boost which would compensate for the high rate of inflation which is widely believed to be around 10% and growing. Inflation is what has sparked a wave of industrial action as workers see their wages cut in real terms. Cutting taxes would restore wage packets – but her critics say will also stoke inflation. Businesses do not like inflation in a highly competitive market as it squeezes profits hikes overheads and material costs and damages their customer base as clients look for cheaper alternatives. If Sunak’s plans to increase interest rates works by cutting inflation that would be welcomed by businesses but at what cost? As people cut spending due to interest rates going up and leaving them worse off that too would hit business. It’s a question of ‘you pays your money and makes your choice.’

On balance most financial directors would go with Sunak since he’s been the chancellor for some time and has gone through the books. He’s also being candid about the financial situation the country is in and is concerned about the huge cost to the exchequer of borrowing our way out of recession. That can lead to long term costs which puts the brakes on an economy. Critics will say that Truss’s Keynesian friendly policies will boost the economy and the increase in revenue will bring dividends.  

In short and in general employees, sole traders and the self-employed would prefer Truss’s policies while small, medium and larger businesses would welcome the more cautious Sunak as PM. Who ever wins will be on a short lease as the election is less than two years away with Labour enjoying a consistent lead in the polls.

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk