Zahawi, who took over as chancellor eight weeks ago and is likely to be replaced if, as widely expected, Liz Truss is revealed as the next Conservative leader, will also discuss the Ukraine war and financial services cooperation. He said he wanted to “work closely with my allies on the shared challenges we face to build a fairer and more resilient economy at home and abroad” during the visit to New York and then to Washington. But Zahawi will at most be able to gather ideas for possible future policies potentially implemented by a new chancellor, who is widely thought to be Kwasi Kwarteng, the business secretary, if Truss takes over from Boris Johnson. The result of the Conservative leadership contest will be announced next Monday, with the winner expected to officially take over as prime minister a day later. While Johnson has vowed not to make major decisions that would tie his successor’s hands, the lack of action amid the leadership showdown, which has seen the prime minister take two holidays, has led to criticism that ministers have disappeared ahead of a looming national crisis on energy bills. Labor argued that Zahawi’s visit to the US would change little. James Murray, the shadow Chancellor of the Exchequer, said: “Families across the country are desperately worried about the massive rise in energy bills that is on the way, but we are stuck with this do-nothing Tory government. Now we find out that the chancellor is flying on an international chinwag.’ Labor is seeking to put pressure on Truss over what it says is a vague and often contradictory set of proposals from his camp to tackle energy bills, which are expected to rise by 80% in October, with another sharp rise to due in January. Truss did not rule out immediate help for households with their energy bills, but declined to specify what it might include and has repeatedly stressed that her priority is tax cuts, not what she called “handouts”. He has pledged to suspend green levies on energy bills and reverse the recent rise in national insurance, with a view to funding clearing the backlog of the NHS post-Covid and reforming social care. It was reported at the weekend that it could also cut VAT by 5% or more as a way of saving people money or even cutting income tax. But critics have pointed out that cuts to income tax or national insurance would disproportionately benefit the highest paid and would not help those relying on pensions or benefits, while essentials such as food have a zero rate of VAT. Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Paul Johnson, director of the Institute for Fiscal Studies, said an approach based on tax cuts is simplistic and risks raising borrowing costs. “Clearly you can’t do all this without completely collapsing the public finances,” he told the Times. “This simplistic mantra that you cut taxes and the economy grows more, that you cut taxes when you have a big deficit and high inflation and you don’t do it with any other part of the plan, is quite troubling.” Pat McFadden, the shadow chief secretary to the Treasury, said the lack of clarity from Truss was causing people extra concern. “The more different ideas spill out of the Tory leadership contest, the clearer it becomes that none of the candidates have a plan to tackle the cost of living crisis,” he said. “It is energy prices that are driving this crisis. Energy prices are what drive people to despair as they worry how to make ends meet. This flip-flop from Liz Truss, floating one policy idea after another, is causing the country to needlessly worry about its bills.”
