BBC.- Planned cuts to corporation tax next April are to be put on hold, Boris Johnson has told business leaders, with the money being spent on the NHS. The rate paid by firms on their profits was due to fall from 19% to 17%.
But the PM told the CBI conference the move could cost the Treasury £6bn and the cash would be better spent on the “nation’s priority”.
Labour had opposed the tax cut and said the rate should rise to 26%, where it was in 2011.
Leader Jeremy Corbyn will also address senior business figures later, as he makes his own election pitch to employers and entrepreneurs.
And Liberal Democrat leader Jo Swinson will say hers is the “natural party of business” because it wants to cancel Brexit.
In his remarks, Mr Johnson said business helped fund the nation’s number one priority by “creating the wealth that actually pays for the NHS”.
He said his party “believe emphatically in fiscal prudence” and had decided against going ahead with a further cut in corporation tax, a step first proposed by Chancellor George Osborne in 2016 to boost business in the wake of the Brexit referendum.
But many economists said the move would be unnecessary and potentially counter-productive, with a study based on HMRC data last year suggested the cut could cost the exchequer £6bn a year in lost revenues.
Announcing his decision on Monday, Mr Johnson said the UK already had the lowest rate of corporation tax of “any major economy”, the Conservatives having reduced it from 28% since 2010.
“Before you storm the stage, let me remind you that this saves £6bn that we can put into the priorities of the British people including the NHS,” he told business leaders.
He insisted it was the “fiscally responsible” thing to do and did not mean the Conservatives were “averse to reducing taxes on business”.
The Conservatives are committed to giving the NHS an extra £20bn a year for its day-to-day operations by 2023 as well as an extra £1.8bn in capital expenditure for new buildings and IT.
Labour has said raising corporation tax to 26% will raise billions to be spent on its priorities, including extra spending on health and education.
Mr Johnson is hoping to win a parliamentary majority on 12 December, get his Brexit deal taking the UK out of the EU into law by 31 January, and begin talks with Brussels on a permanent trading relationship.
The Conservative leader told the CBI conference: “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.”
Mr Johnson also announced policies to help businesses “make the most of Brexit”, including a review of business rates in England, with the aim of reducing the overall burden of the tax.
The Conservatives also say they plan a cut in National Insurance contributions for employers, who already benefit from a reduction known as the employment allowance.
They would increase this from £3,000 to £4,000. They say this would amount to a tax cut of up to £1,000 for more than half a million businesses.
They would also increase the Research and Development tax credit rate from 12% to 13%, which the party says will boost manufacturing and the professional, scientific and technical services sectors.
The party also proposes tax relief for landlords and builders, and higher tax credits for companies that are involved in research.
“With a Conservative majority government you can be sure we will get Brexit done and leave with the new deal that is already agreed – ending the uncertainty and confusion that has paralysed our economy,” Mr Johnson said.
Labour wants to tear up Mr Johnson’s Brexit agreement and negotiate a new deal with Brussels, including a customs union and a closer relationship with the EU single market, which it would then put to a public vote.
Jeremy Corbyn will set out Labour plans to train 80,000 people a year, as part of a “climate apprenticeship” programme, in his speech to the CBI, which is the UK’s largest business lobby group.
“Labour’s Green Industrial Revolution will be a central motor of the party’s plans to transform our country and economy, using public investment to create good, clean jobs, tackle the climate emergency and rebuild held back towns, cities and communities,” he is expected to say.
Labour’s plan would see 320,000 apprentices trained in jobs such as construction, manufacturing and design within renewable energy, transport, sustainable agriculture and forestry, all during its first term in office.
It will be funded by diverting 25% of the funds that employers already set aside through the Apprenticeship Levy and topped up by any dividends over the cap paid into Labour’s Inclusive Ownership Funds – the party’s plan to give workers a 10% stake in their employers.
The party said it also wanted to give employers more choice over how they spend Apprenticeship Levy Funds.
Lib Dem leader Jo Swinson will tell business leaders that her party is the “natural party of business” as part of her case for the UK staying in the EU.
She will attack the other two parties’ plans to spend on big infrastructure projects, according to remarks circulated before the conference.
“Both the Conservatives and Labour will have to scramble around for projects to pour money into just to keep their word – regardless of whether they’re good projects and good use of public funds,” she will say.
The CBI said it wanted business rates – a tax on business premises collected by councils – to be reformed, as part of a number of recommendations it would like the parties to adopt.
It also wants stalled programmes such as the HS2 high-speed rail link between London and the north of England, and Heathrow’s third runway to be finished.
Its director Carolyn Fairbairn told the BBC’s Today programme that big business had been left feeling ignored by politicians in recent times.
“There have been so many other issues around, in terms of sovereignty and issues that aren’t really business issues, which is why I think today is really important as we’ll have 1,500 businesses from around the country being addressed by all three political leaders,” she said.
“That says something important. It’s a moment for us to hear a lot more about business in this election.”
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