Boris Johnson today defended his decision to postpone a planned further cut to corporation tax as he urged business leaders to stick with the Tories and warned Jeremy Corbyn would lead the UK to ‘economic disaster’.
The current rate of corporation tax is 19 per cent and it was due to fall to 17 per cent next year but Mr Johnson said pausing the shift would free up £6 billion to spend on public services like the NHS.
In contrast, Labour’s election pitch for power contains a pledge to hike corporation tax to 26 per cent – a move Mr Johnson suggested would wreak havoc with businesses.
The Prime Minister announced his decision to freeze corporation tax at its current level at a CBI summit of business leaders in London today.
He insisted it was the ‘fiscally responsible thing to do’ as he then compared the Tories’ policy to that of Labour.
‘We have already cut it from 28 to 19 per cent, the lowest of any major economy, and the alternative is Corbyn – who would whack it straight back up to the highest levels in Europe,’ he said.
Mr Johnson said a Labour government led by Mr Corbyn ‘would be an economic disaster for this country’.
Labour claimed the decision by Mr Johnson represented a ‘temporary pause in the Tories’ race to the bottom on corporation tax’.
The CBI gave the move a cautious welcome but director general Carolyn Fairbairn said the PM would have to help businesses in other areas.
She said in a statement: ‘Postponing further cuts to corporation tax to invest in public services could work for the country if it is backed by further efforts to the costs of doing business and promote growth.’
Mr Johnson had targeted the annual CBI gathering as an election opportunity to reset his relationship with the business community.
Relations between the Tories and business were rocked by comments Mr Johnson reportedly made in 2018 when it was claimed he said in response to business concerns about Brexit: ‘F*** business’.
Today he set out four proposed tax cuts in a bid to win them over:
- A business rates cut following a major review.
- A cut to employers’ National Insurance contributions.
- Increased relief for new buildings that businesses need.
- Increased funding and help to boost research and development.
Boris Johnson told a CBI event in London that he wanted to postpone a planned cut in corporation tax
Corporation tax was due to fall from 19 per cent to 17 per cent next year. But Mr Johnson said postponing the shift now was the ‘fiscally responsible’ thing to do
Mr Johnson also used his address at the CBI summit to announce four planned business tax cuts
Mr Johnson also used his address to launch a savage attack on MPs who failed to support his Brexit deal as he claimed the UK is being ‘held back’ by its politicians.
He said the Tories only need to gain nine seats on December 12 in order to make sure they ‘can and will’ get Brexit resolved ‘in a matter of weeks’ and by the January 31 deadline.
He likened his divorce accord to a Pot Noodle as he said it could be implemented incredibly quickly: ‘Just add hot water, stir in pot, it’s there.’
Jeremy Corbyn tries to calm business fear of a Labour government
Jeremy Corbyn attempted to calm business fears about a Labour government today, insisting they had ‘much to gain’ if he takes power in December.
The opposition leader said it was ‘complete nonsense’ to say that he was anti-business as he addressed the CBI annual conference in London this morning.
His address came the day after the trade organisation’s director general Dame Carolyn Fairbairn had warned that his election plans would ‘crack the foundations of our economy’.
Labour has outlined to nationalise key industries, including broadband, water, railways and the Royal Mail.
Labour announced plans to nationalise broadband last week, pledging to take parts of BT into public ownership.
The party costed the policy at £20billion – but the chief executive of BT said it would cost taxpayers at least £100billion.
Mr Corbyn told assembled captains of industry: ‘It’s not anti-business to be against poverty pay.
‘It’s not anti-business to say the largest corporations should pay their taxes just as smaller companies do.
‘It’s not anti-business to want prosperity in every part of our country and not only the City of London.
‘And I say this to business too: if a Labour government is elected on 12th December you’re going to see more investment than you ever dreamt of.’
In a bid to win over his critics and restore the Tories’ reputation as the party of business Mr Johnson set out a handful of new initiatives designed to reduce the burden on companies in the UK.
The most eye-catching is a plan to cut employers’ National Insurance contributions.
He also signalled his intention to reduce business rates, increase tax credits on research and development from 12 per cent to 13 per cent and boost tax relief on the purchase, building or leasing of a premises from two per cent to three per cent.
In his address to the Confederation of British Industry (CBI) annual conference, Mr Johnson said: ‘Let’s not beat around the bush, big business didn’t want Brexit.
‘You made that clear in 2016 and this body said it louder than any other.
‘But what is also clear is that what you want now – and have wanted for some time – is certainty.
‘So that you can plan and invest, so you can grow and expand, so that you can create jobs and drive prosperity.’
He added: ‘Whilst you didn’t want it, the people did vote for it. And so it was for politicians to deliver it.’
Setting out his plans to reduce taxes on businesses, he said the next Tory government would cut business rates, launching a fundamental review at their first Budget.
The party said they will increase the employment allowance from £3,000 to £4,000, providing a cut in National Insurance of up to £1,000 for more than half a million businesses.
Under the plans, the R&D tax credit rate will increase from 12 per cent to 13 per cent, which the Tories say will boost manufacturing and the professional, scientific and technical services sectors in particular.
Boris Johnson vows to keep Sajid Javid as his Chancellor
Boris Johnson today guaranteed that Sajid Javid will remain as Chancellor if the Tories form the next government.
There has been growing speculation of a rift between the two men.
But Mr Johnson today committed to keeping Mr Javid in the post.
Asked about Mr Javid’s future, the Prime Minister said following his CBI speech: ‘I’m going to give you an absolutely categorical assurance that I will keep Sajid Javid as my chancellor. How about that?
‘I think he’s a great guy and I think he is doing a fantastic job and I’m proud to count him as a colleague.
‘I’d be grateful however if… we could not have endless questions about the personnel at the top of the Tory Party, I don’t think I want to answer exhaustively about everybody.’
They have also promised to increase the structures and buildings allowance (SBA) from two per cent to three per cent.
The Conservatives said the cumulative benefit to businesses of the changes to the employment allowance, SBA and R&D tax credits will be approximately £1 billion by 2022-23.
Mike Cherry, chairman of the Federation of Small Businesses, said: ‘These measures lay down a gauntlet to other parties, and we hope there will be more to come at this election.
‘Actions to reduce the cost of employment and fix business rates should be complemented with clear commitments to tackle the scourge of late payments and help ensure the Government is helping the self-employed.
‘For example, through introducing a ‘self-employment legislative lock’ and measures to help the self-employed have better access to maternity, paternity and adoption support, and mortgages and pensions.’
Jeremy Corbyn, pictured addressing the CBI after Mr Johnson, said he would not be making ‘any apologies’ for Labour’s nationalisation plans
Carolyn Fairbairn yesterday warned Mr Corbyn’s business policies could ‘crack the foundations of our economy’
Labour ‘set to shelve 2030 carbon neutral target’
Jeremy Corbyn is poised to water down a Labour target to make the UK carbon neutral by 2030 after opposition from union bosses.
Motions were adopted by Labour delegates at the party’s annual conference back in September which committed to working towards a ‘path to net zero carbon emissions by 2030’.
The Labour leadership has made much of its green credentials as it seeks to dominate the climate change issue ahead of the general election on December 12.
But the 2030 target has apparently been shelved amid concern from some in the Labour movement that setting a firm commitment would set the party up to fail should it win the election.
The Telegraph reported that the party’s election manifesto, due to be published later this week, will not include a cast iron guarantee that the 2030 date will be stuck to.
It will instead say that a Labour government will make ‘substantial progress’ towards the UK becoming carbon neutral by that date.
The policy is believed to have been watered down on Saturday as Labour chiefs met to hammer out the details of the party’s election manifesto.
Tim Roache, the head of the GMB union, reportedly demanded the existing wording be changed from ‘overwhelming progress’ to ‘substantial’.
Mr Corbyn also addressed the CBI conference this morning after Ms Fairbairn said Labour’s nationalisation plans would ‘freeze investment’ in the UK.
Ms Fairbairn told Sky News’ Sophy Ridge On Sunday programme: ‘We look at the policies on the table and we have real concerns that they are going to crack the foundations of our economy.’
Speaking at the event this morning, Mr Corbyn said he was ‘not making any apologies’ for pledging to bring some key services into public ownership.
He said: ‘It’s not an attack on the foundations of a modern economy, it’s the very opposite. It’s the norm in many European countries.
‘It’s taking the essential steps to build a genuinely mixed economy for the 21st century.’
Mr Corbyn added: ‘So I understand your caution about some of our plans but your businesses, your workers, your consumers have been failed by rip-off energy bills and very poor rail and bus services in many parts of the country, and I think many of you know that because you know things can’t go on as they are.’
Labour has pledged to nationalise water and energy companies, train firms and Royal Mail. Last week the party announced plans to partially nationalise the UK’s broadband network.
Mr Corbyn also dismissed as ‘nonsense’ claims he is ‘anti-business’, and instead said a Labour government would bring ‘more investment’ to businesses than they have ‘ever dreamt of’.