Money

Boris Johnson postpones plan to cut corporation tax


How the parties now stand on corporation tax

Torsten Bell, chief executive of think tank the Resolution Foundation, has shared this graph over both major parties’ plans for corporation tax.

He said: “The gap between Labour and the Tories on corporation tax just got quite a bit smaller – but it’s still on the pretty huge side.”

Corbyn: ‘Nonsense’ to say I am anti-business

More from Jim Pickard at the CBI:

Jeremy Corbyn has insisted that Labour’s manifesto will not represent an assault on the business world, despite the party’s plans for mass nationalisations and big tax hikes on executives and large companies.

“It is sometimes claimed that I am anti-business. This is nonsense,” he said in his speech to the conference.

It is not anti-business to be anti-poverty pay…it is not anti-business to want prosperity in every part of our country, not just the financial centres of the City of London.

The Labour leader tried to play up elements of his party’s plans for greater borrowing to improve Britain’s infrastructure and skills. Under Labour the government would neither try to “do everything” but nor would it sit back and leave everything to markets either, he argued.

You’re going to see more investment than you’ve ever dreamed of….world-leading infrastructure…the fast reliable transport links you’ve always wanted….the certainty of a customs union and access to the single market….you and your business have so much to gain from a Labour government.

That did not amount to an attack on the foundations of a modern economy, he said.

CBI boss Carolyn Fairbairn said it was “an incredibly good thing” that Mr Corbyn was prepared to come and address business leaders, despite some of their differences on policy.

FT poll tracker update

As Jeremy Corbyn begins his own address to the CBI, a reminder that the pound is trading at two-week highs today as traders react to polling which shows the Tories extending their polling lead over Labour.

Today’s FT poll tracker has just been published. It shows the Conservatives now hold a 13-point lead over Labour.

Our tracker combines all voting intention surveys published by major British pollsters. The trend line uses only the most recent poll from each pollster and weights them according to when they were conducted.

FT analysis: Tory tax pledge

The Conservative party has always insisted that cutting corporation tax should ultimately lead to bigger tax receipts because of the Laffer curve, Jim Pickard reports.

Economist Arthur Laffer theorised that a cut in tax rates will eventually increase tax revenue due to the positive impact on economic output.

Today’s comments from Boris Johnson, that keeping corporation tax at 19p will lead to £6bn of extra public spending, flies in the face of those previous comments.

Kate Andrews, associate director at the Institute of Economic Affairs, a free market think tank, called the announcement a “mistake”.

Corporation tax is a stealth tax on workers. Not to mention bad for competition, innovation and attracting business and investment from all over the world.

The response to the corporation tax decision has been fairly muted – at least from today’s hosts.

Carolyn Fairbairn, director-general of the CBI, said: “Postponing further cuts to corporation tax to invest in public services could work for the country if it is backed by further efforts to (address) the costs of doing business and promote growth.”

She added that “action at home must be accompanied by the right type of Brexit certainty”. “That means a new relationship with the EU that maintains frictionless trade, keeps close regulatory alignment and supports our services sector.”

EmoticonTories scrap plan to cut corporation tax

Jim Pickard reports:

Boris Johnson has just announced that Tory plans to cut corporation tax further to 17 per cent have been postponed in order to prioritise public spending instead. He says that this will free up “£6bn that we can put into the priorities of the British people including the NHS”.

The prime minister points out that corporation tax has already fallen from 28p to 19p in the pound since 2010.

“The alternative is Jeremy Corbyn who would whack it back up to the highest levels in Europe,” he says.

Johnson promises business leaders a ‘tidal wave of investment’

Jim Pickard, the FT’s chief political correspondent, reports:

Boris Johnson, speaking at the CBI conference at the Millennium Dome, told delegates that a majority Tory government would “get Brexit done”, clearing the way for a “pent-up tidal wave of investment” into the UK.

Mr Johnson insisted that his deal would give complete certainty in terms of the UK’s relationship with the EU, playing down concerns that Britain faces a cliff-edge if it is unable to reach a fresh trade deal with Brussels by the end of next year.

All we need is nine more seats and we can deliver Brexit in January…and then unleash the potential of the whole country and get on with our One Nation agenda

The prime minister told the conference that his post-university ambition was to be an industrialist making “beautiful hand-made kitchen tiles”, only for the idea to fall at the first hurdle.

I’m lost in admiration for all those who have made a success of their businesses.

He told delegates that he did not want an election in December but saw it as the only way to clear a path through the blockage of parliament, dubbing it a “Dyno-Rod election”.

The alternative would be a Corbyn-Sturgeon Labour-SNP coalition that would enable further uncertainty through two more referendums, he said. “Is he (Corbyn) for Leave? Is he for Remain? It’s a mystery.”

EmoticonCBI warns both parties over ‘extreme ideology’

Carolyn Fairbairn, the CBI’s director-general, has told both major parties that confidence in Britain is faltering ahead of the election as she called for a return to evidence based policy-making.

Dame Carolyn opened her group’s annual conference with a thinly veiled warning to both the Conservative and Labour parties, as she said “extreme ideology” is a “danger that could get in the way of a bright future”.

On the right, she said a preference for a no-deal Brexit is driven by a “zeal” for the wholesale deregulation of the UK economy which is not what business wants.

[British firms] accept Brexit and will do all they can to make it work. But when no-deal becomes an ideology of its own, seemingly intent on ignoring the impact on jobs and livelihoods, then we have a problem.

Dame Carolyn said Labour’s plans to renationalise swathes of British industry are “at least as damaging”.

Its most recent proposed nationalisation of part of BT was a bolt from the blue and has sent a chill through boardrooms at home and abroad.

“These ideologies from both sides are causing great harm to our economy,” she said.

And with that grim warning, over to Boris Johnson who is now speaking…

Big business and the Tory party

Boris Johnson’s notorious use of the phrase “f*ck business” in response to corporate concerns about a no-deal Brexit became a symbol of the strains between business leaders and the Conservative party last year.

The prime minister has since sought to bury the hatchet with senior executives, and later this morning will seek to woo big business at the CBI’s annual conference with a pledge to reduce business rates and provide a series of tax breaks worth around £1bn a year.

Still, his speech comes less than a day after business groups, including the CBI itself, expressed concerns over Conservative party plans to cut immigration if they win the election.

The CBI yesterday said the Tory plans could lead to skills shortages in key industries.

Carolyn Fairbairn, the business group’s director-general, told Sky News that certain sectors including construction needed access to workers at “all” skill levels.

We need people to come and help us renew our economy. It’s not just brightest and best, it’s people at all skill levels across our economy that we need.

The Brexit disruptors: beyond left and right

Political insurgents like Rory Stewart, Chuka Umunna and Claire Fox are trying to shake up the UK’s general election and tempt people away from the two main political parties.

The FT’s Miranda Green weighs up whether they can transform traditional politics

Papers lead on interview with Prince Andrew over Epstein

An interview with Prince Andrew on BBC’s Newsnight, broadcast over the weekend, leads the papers this morning. The Times headlined the story: Defiant duke stands by ‘car crash’ TV interview. The paper adds that the prince insists the questioning over friendship with Jeffrey Epstein, the late financier and paedophile, was a success despite the backlash. The Guardian went with: Apologise to Epstein’s victims now, prince told.

The arch Conservative broadsheet Daily Telegraph says Prince Andrew is under fire from Buckingham Palace, adding that the Queen did not give her blessing to the interview, citing royal sources.

The Financial Times leads with violence in Hong Kong and Saudi Aramco trimming its fundraising goal in the latest hitch for Saudi Arabia’s state oil flotation.

The Guardian says leading scientists and former government advisers have condemned the Conservatives’ record on tackling the climate crisis. Sir David King, the government’s special representative for climate change from 2013-2017, said he would give the Tories three or four out of 10 for their record, the paper reports.

The Times has a story that initiation rituals put students off university sport.

Boris to trigger a Brexit boom, says the Express, as it reports on the £1bn a year business tax cuts the prime minister has announced that will “turbocharge” the economy. The splash is next to a picture of Boris Johnson with the headline: PM keeps calm and curries on, a reference to Mr Johnson’s visit to a Sikh temple in south London at the weekend.

Boris Johnson will struggle to pledge big UK tax cuts, say experts

The FT’s economics editor Chris Giles writes that the prime minister risks breaching his new budgetary rules with large election giveaways.

Boris Johnson will struggle to promise big tax cuts in the Conservative party election manifesto if he wants to live within new Tory budgetary rules, according to public finance experts.

A combination of little existing budgetary leeway, recent spending increases and future pressure on public services left limited room for tax cuts, said the experts.

Their views conflict with thinking inside the Treasury, where officials believe it is possible to fund some but far from all of the prime minister’s favoured tax cuts while still running a surplus on the current budget — the difference between government tax receipts and day-to-day public spending.

Chancellor Sajid Javid announced new fiscal rules this month under which he would seek to balance the current budget by 2022-23.

Read Chris’s full story here.

Why markets like the current polling

Many investors and analysts suggest that a Tory majority would boost the pound as it would at least offer a clear way ahead over Brexit, and remove the chance of a no-deal exit. Any other result throws open the chance of a market-friendly softer or cancelled Brexit, but would come with considerable uncertainty.

“The scale of the Tories lead in the polls and with current momentum moving in their favour, it is making market participants more confident that they will be able to form a majority government after the election and pass Boris’ Brexit deal,” said Lee Hardman, a currency analyst at MUFG.

“An end to the Brexit deadlock which has dogged parliament would open the door for cable to rise back above 1.3000 and towards the mid-1.3000’s.”

Sterling hits two-week highs

The pound rose to its highest level in more than two weeks on Monday morning, as opinion polls showed the Tory party has widened its lead over Labour.

“Weekend opinion polls show the Tories extending their lead over Labour to the 15-17% range – which is giving the pound a boost in early Europe,” said ING’s foreign exchange strategists.

A fresh poll released on Monday morning by Survation showed the Conservatives held a 14-point lead on 42 per cent, with Labour on 28 per cent.

The Tory strategy to squeeze the Brexit party has been startlingly effective, with Nigel Farage’s party polling just 5 per cent.

Labour to push on with ‘shares for workers’ scheme

Jim Pickard and Laura Hughes report:

Labour’s election manifesto will include plans to force companies to hand 10 per cent of their shares to workers over 10 years despite a business backlash, according to people familiar with the document.

The manifesto, due to be unveiled on Thursday, will also include a windfall tax on oil companies as part of its attempts to shift the UK towards a low-carbon economy, the Financial Times has established.

It highlights how Labour leader Jeremy Corbyn has devised what is expected to be the most leftwing party manifesto in a generation.

Labour is seeking to shift the election debate away from Brexit, where its position — offering a second referendum — has failed to resonate with most Leave and Remain voters.

Read the full story here.

Focus on business

Corporate Britain has often felt ignored during the last three and a half years as British politics fixates on Brexit, but this morning a trio of party leaders are lining up to woo big business.

Prime minister Boris Johnson, Labour leader Jeremy Corbyn and the leader of the Liberal Democrats Jo Swinson will all address the CBI’s annual conference in London.

• The employers’ organisation has fired repeated warnings over the damage stalling progress in the economy over the past three years, an issue which Mr Johnson is expected to address head on.

• Outlining a range of tax breaks, Mr Johnson will tell the CBI: “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.”

• Mr Corbyn will use his own speech to the CBI conference to outline reforms to the apprenticeship levy to help tackle climate change.

• Ms Swinson will pitch the Lib Dems as the “natural party of business” because they want to stop Brexit.

Weekend catchup

The Conservatives focused on immigration over the weekend, including a promise to introduce a points-based system and remove the preferential treatment of EU migrants over welfare and charging for access to healthcare. The party refused to set an annual target for immigration numbers, but said it would create an “equal system”. Business groups expressed concerns.

Labour leader Jeremy Corbyn said the party would not “turn its back” on migration, and still expected a large amount of movement between the UK and EU after Brexit.

With one weekend poll showing the Tories have opened up a 17-point lead, Mr Corbyn will be hoping to reset the narrative this week in the election’s first TV debate, and his party’s subsequent manifesto launch.

The FT reported yesterday that Labour has devised what is expected to be the most leftwing party manifesto in a generation.

But of course, only one story really cut through this weekend, as Prince Andrew’s attempt to clear his name over abuse allegations spectacularly backfired.

Welcome along

Good morning and welcome to Monday’s coverage of the general election. We will have news, analysis and comment from the FT’s team throughout the day.

The economy is in focus today, with Jeremy Corbyn and Boris Johnson both due to address business leaders at the CBI’s annual conference in London. Full coverage to come.

As ever, do let us know your thoughts and anything you would like us to cover in the comments section below.





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