CBI 2019: What are the parties offering business?
Boris Johnson, Jeremy Corbyn and Jo Swinson all attended the CBI Conference today in an attempt to win over business leaders with their proposals in the lead up to the General Election on 12 December.
Prime Minister Boris Johnson has promised to end Brexit “uncertainty and confusion” while Jeremy Corbyn unveiled Labour’s plans for 320,000 apprenticeships in England. The Liberal Democrats say that, as the party of Remain, they are the “party of business”.
Here is what the parties plan to do if they win the General Election:
– What are the Conservatives proposing?
Johnson has said planned cuts to corporation tax next April will be put on hold if the Conservatives get back into power, with the money instead to be spent on the NHS.
Corporation tax, the rate paid by firms on their profits, was due to fall from 19% to 17% in 2020.
The Prime Minister said the move would have cost the Government about £6 billion a year.
Johnson also said he plans to cut National Insurance contributions for employers, who already benefit from a reduction known as the employment allowance.
The party said its plans to increase the employment allowance from £3,000 to £4,000 will provide a cut in National Insurance of up to £1,000 for more than half a million businesses.
Johnson has also promised to increase the Research and Development tax credit rate from 12% to 13%, which the Tories say will boost manufacturing along with the scientific, technical and professional service sectors.
– What is the Labour Party’s plan?
Corbyn has promised to create a climate apprenticeship programme which will train an average of 80,000 people per year.
Under the plans, Labour said it would deliver 320,000 apprenticeships in England during its first term in government, with 886,000 apprenticeships being created through the scheme by 2030.
Labour said the programme will be funded by diverting 25% of the funds employers already set aside through the Apprenticeship Levy, and topped up by any dividends over the cap paid into Labour’s Inclusive Ownership Funds, which the party said is expected to be £700 million by 2024.
Labour also plans to reform the Apprenticeship Levy to better meet the needs of workers and employers, and to also tackle the climate emergency.
– What do the Liberal Democrats say?
The Lib Dems say they are the “natural party of business” by campaigning to remain within the EU.
Jo Swinson has also pledged to scrap business rates, which disproportionately hit bricks & mortar retailers, and replace them with a commercial landlord levy.
Swinson said the "innovative and bold" policy would save the beleaguered high street, though she recognised that in this scenario some landlords would seek to pass some costs on to tenants.
Elsewhere Swinson revealed plans for a general duty of care for the environment and human rights for all companies and public sector agencies, as well as for companies with over 250 employees to have at least one employee representative on the board.
– What do businesses think of the parties’ policies?
Responding to Johnson’s speech, Dame Carolyn Fairbairn, Director General of the CBI, the UK’s largest business lobby group, said business welcomes the Prime Minister’s increased investment in education, infrastructure and technology.
However, she warned that his words must become “firm commitments” in the Conservatives’ manifesto.
In response to Labour’s plans, Dame Carolyn showed support for the party’s proposal of greater flexibility on the Apprenticeship Levy and plans for vocational training for school leavers and those switching careers.
However, she raised concerns that “false instincts for mass nationalisations and forcing inclusive ownership schemes onto thriving businesses does little more than frighten off investors from backing the UK”.
Dame Carolyn said of Swinson's proposals: "The Liberal Democrats recognise the broken business rates system needs fundamental reform. But moving to a land value tax is mired in complexity, and it remains unclear how it would cut overall costs or provide a level playing field. Much more detail will be needed."
She added that the recognised employee engagement was "hugely important", but said "there were numerous ways to ensure staff views are represented at the highest levels rather than simply asking employees to sit on boards."
– What was the reaction to plans to postpone corporation tax cuts?
In his speech at the CBI Conference, Johnson said the Government would postpone cuts to corporation tax to pay for a £6 billion investment in public services.
Shadow chancellor John McDonnell said Johnson’s plans to pause cuts to corporation tax “cannot compensate for the lives that have been lost and will not repair the damage done to our communities to pay for the Conservatives’ handouts to big business since 2010”.
John O’Connell, chief executive of the TaxPayers’ Alliance, said it is “disappointing” to see a slowdown to cuts in corporation tax.
He added that in order to boost the economy, pay for first-class public services and put more money into the pockets of taxpayers, the parties should be “committing to cutting the tax burden immediately”.
- What do businesses want?
Dame Carolyn said that whichever party wins the General Election must prioritise working with business to provide “bolder, better and fairer” answers to the challenges facing the UK.
Fairbairn has also accused politicians of ignoring the interests of businesses in recent times.
In the business group’s manifesto for political parties, which outlines the steps the next government should take to help businesses, the CBI calls for business rates to be reformed, the “broken” Apprenticeship Levy to be fixed, and for vital infrastructure projects like HS2 and the Heathrow expansion to be completed.
The CBI has also called for a new immigration system which provides access to labour and skills, focuses on contribution, not numbers, and gives business time to adapt.