Portsmouth businesses say suggested energy bill freeze and tax cuts from new prime minister Liz Truss would make 'a massive difference'

The incoming prime minister delivered her first speech in office outside the door of No 10 Downing Street, where she pledged to prioritise the economic crises gripping the nation.

Shortly afterwards, Ms Truss formed the core team of her government, appointing Fareham MP Suella Braverman as the new home secretary, while James Cleverly was made foreign secretary, Therese Coffey was given the post of health secretary, and Kwasi Kwarteng was given the role of chancellor.

Liz Truss said that the country faced ‘global headwinds’ caused by the war in Ukraine, but she had a ‘bold’ plan to grow the economy through tax cuts and reform.

She said: ‘I will cut taxes to reward hard work and boost business led growth and investment.’

She added that she will take action ‘this week’ to tackle energy bills and ‘secure’ the country’s energy supply for the future.

Speaking from Downing Street, she said: ‘I am confident that – together – we can ride out the storm.’

While nothing has been officially revealed yet, sources suggest that the prime minister plans to freeze the average household energy bill at current levels, skipping the 80 per cent rise that is set for winter.

On Tuesday a Government source confirmed a report in the Times that suggested that bills will be capped at £2,500 and the £400 will still be taken off.

It comes ahead of the planned rise in Ofgem’s household energy price cap which is set to rise from £1,971 to £3,549 per year for the average household from October.

The cost of the policy is expected to be around £100 billion and come out of general taxation - rather than coming off energy bills.

Michele Di Lorio, who has run the Aroma Caffè Bar, in Havant Road, Drayton for the last two years, said that his business could survive with its current energy bill of £890 being frozen.

He said: ‘If that is true, it’s manageable – that’s what we have learned to live with.’

His partner Kim said cutting taxes would make a ‘big difference’ and could help the business expand.

She said: ‘We want to grow. We are not doing badly but we have never had any help for growth.

‘Our longevity does depend on prices at the moment. It’s getting harder and harder.’

Alex Vernal, landlord for four years at The British Queen, in Queen’s Road, Fratton, agreed, calling for taxes on specific goods to be cut.

He said: ‘Fuel, beer, and VAT – it’s those hidden taxes that cause the main problems.

‘But income tax – I don’t think that should be played with.’

The landlord said action needs to address changing consumer habits, which have been left cautious after the uncertainty of the pandemic and the cost of living crisis.

He said: ‘We have one customer who used to be here four days a week. A real pub man. Now he comes down once a week. People need more confidence to spend again.’

But the new prime minister failed to mention other issues plaguing business, according to Portsmouth City Council leader Gerald Vernon-Jackson.

The Liberal Democrat politician said: ‘I don’t think she said a great deal. I think everybody would be supportive of growing the economy – but the issue is we cannot find people to fill jobs. There’s a real problem with the workforce. I am absolutely hearing that from everybody – they cannot recruit.

‘If the energy bills are frozen where they are now, it’s still really difficult for people. People in the restaurant trade are really hurting – their costs are going through the roof.’

Regarding tax cuts, he warned: ‘Offering a cut to corporation tax for big companies will go down very, very badly.

‘There’s been talk of cancelling the increase in National Insurance – that money still needs to go into health and social care. We have to address the problems in the health service.’