In a speech to the Confederation of British Industry annual conference the Prime Minister will promise to slash a series of levies of firms by a total of £1billion a year to spur economic growth. Business rates and National Insurance contributions will both be cut while tax relief on investments in new premises and research and development will be increased, he will say. His promise comes after a CBI chief warned that Labour’s hard-Left plan for the country could “crack the foundations of our economy.”
Mr Johnson’s speech to the CBI will seek to assure his audience that the Tories remain firmly on the side of business despite misgivings among some company bosses about Brexit.
Acknowledging their concerns as well as the CBI’s opposition to the Leave campaign during the 2016 EU referendum, the Tory leader is expected to say: “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.
“Whilst you didn’t want it, the people did vote for it and so it was for politicians to deliver it.
“It has been politicians in a broken parliament – not you – that have failed in this and in some cases actively tried to sabotage the democratic will of the people.
Boris Johnson promised £1bn tax cuts to fuel Brexit boom (Image: Getty)
“This is why we had to have this election; our hung and broken Parliament was set on prolonging this delay.”
Mr Johnson will say the Brexit crisis has left the country “stuck in gridlock and our economy stuck in first gear”.
Repeated Brexit delays have been “marching business up to the top of the hill, only to march them down again,” he is expected to add.
Turning his fire on Labour leader Jeremy Corbyn, the Prime Minister will tell the CBI: “This is Corbyn’s plan at this election – the chaos and division of two more referendums, continued paralysis continued uncertainty.
“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.
“We can then focus on the people’s priorities – investing in the NHS, cutting crime and making sure our children get a world class education.
“And you can focus on what you do best – spurring innovation, creating jobs, stimulating growth.”
Jeremy Corbyn would cause ‘chaos and division’, says Mr Johnson (Image: Getty)
Mr Johnson’s package of tax cut election pledges for businesses will include:
- A wide-ranging review of business rates to be announced in the first Budget of a Tory majority government to overhaul the system and reduce the overall burden of the levy on firms.
- Raising the annual Employment Allowance threshold at which employers begin paying Class 1 National Insurance contributions on their employees earnings from £3,000 to £4,000. Employers pay Class 1 National Insurance Contributions on their employees’ earnings. Tory officials claim the move will cut the taxes paid by more than half a million businesses by £1,000 a year, equating to a £500million tax cut for small business.
- Increasing the Structures and Buildings Allowance – a tax relief on buying, purchasing or leasing buildings – from 2% to 3%. The Tories say the move will help firms of all sizes, particularly in the agricultural sector.
- Raising the Research and Development Tax credit rate from 12% to 13%. Around 7,000 claims for the relief are made every year. The Tories say the hike will boost the manufacturing and professional, scientific and technical services sectors.
In total, the Tories estimate the four proposed tax cuts will save businesses more than £1billion a year by 2022/23.
Mr Johnson’s proposals are expected to be welcomed by many at the CBI conference in London today.
In contrast, Labour leader Jeremy Corbyn could face difficult questions about his hard-Left plans for the economy.
CBI director-general Carolyn Fairbairn yesterday warned Labour’s election proposals could “crack the foundations of our economy”.
Speaking on the Sophy Ridge on Sunday show on Sky News, Ms Fairbairn said: “We really understand the questions that Labour are asking, but we look at the policies on the table and we have real concerns that they are going to crack the foundations of our economy.
“You look at something like the nationalisation programme, the biggest on record, the fact that we now have a bolt from the blue in terms of BT nationalisation; that will freeze investment.
“I have talked to businesses who are already sitting there thinking maybe we’re next so we do say again to Labour, work with business, work out different answers to these problems but this programme that is appearing to value none of the contribution that business makes will simply shut investment out of our country.”
She also cautioned both parties against “excessive spending pledges”.
Ms Fairbairn said: “We do need investment, that’s absolutely right. We don’t want to get back to a place where we are over-spending so again the partnership with business.”
In a message to all party leaders, she said: “Be very careful about excessive spending pledges.”
Turning to Brexit, she added: “I think it has been a challenging period in terms of business working with government, I think we can’t deny that.”
The Tories last night seized on Ms Fairbairn’s warning about Labour’s threat to the economy.
Chancellor Sajid Javid said: “Jeremy Corbyn’s Labour would spend recklessly, damage our economy and hit people in the pocket. He will put up taxes by £2400 a year for everyone to fund his spending spree.
Sajid Javid has criticised Mr Corbyn’s financial plan, saying it would hit people in the pocket (Image: Getty)
“Corbyn’s Labour would also subject us to another two referendums causing more uncertainty and delay.
“A vote for the Conservatives is a vote to get Brexit done and to keep our economy strong.”
In his speech to the CBI today, Mr Corbyn will announce Labour plans to launch a “climate apprenticeship programme” offering green training posts for 320,000 youngsters.
A Labour-led government would overhaul and extend the existing apprenticeship levy on firms to fund the training in offshore wind, electric vehicles and making homes energy efficient.
Mr Corbyn is expected to tell the CBI conference: “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.
“Climate Apprenticeships will offer training to school leavers and workers looking to change jobs mid-career, creating the engineers, technicians and construction workers we need to transition to a green economy.
“This election is our last chance to tackle the climate emergency. The Tories have failed to invest in our economy, failed to deliver apprenticeships and failed to face up to the climate emergency. Labour will deliver real change.”
Mr Johnson’s proposals to reduce the financial burdens on firms were welcomed by the Federation of Small Businesses last night.
Mike Cherry, national chairman of the FSB, said: “Cutting the jobs tax is a strong, pro-small business move, as it will help half a million small firms raise wages and keep more people in work.”
He added: “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.”
