Johnson shelves Tories’ tax cuts

Boris Johnson will delay any Tory tax cuts for business, in a shock move that has angered his core support base.

British Prime Minister Boris Johnson speaking to the Confederation of British Industry in London on Monday. Picture: AP

Boris Johnson will delay any Tory tax cuts for business, in a shock move that has angered his core support base.

The British Prime Minister told a meeting of business leaders in London on Monday that he would postpone the planned cuts to corporation tax from 19 to 17 per cent so that he could invest in domestic priorities such as the National Health Service.

With the polls showing the Conservatives are ahead of ­Labour with its big-spending charter and nationalisation program, Mr Johnson took a calculated risk that he could upset big and small businesses and opt to plough more into social services if he won the December 12 general election.

He told the meeting of peak business group the Confederation of British Industry (CBI) that ­delaying the cut to corporation tax would save £6bn ($11.4bn), stressing it was the sensible fiscal plan and was necessary ­because the Tories ­believed in fiscal prudence.

“I hope you don’t mind if I ­announce that we are postponing further cuts in corporation tax,’’ he said. “And before you storm the stage and protest let me remind you that this saves £6bn, which can be put to the ­priorities of the British people, including the NHS.’’

But the abandonment of the tax cuts appears to have been a secretly guarded last-minute plan, with a copy of Mr Johnson’s speech overnight saying the Tories were cutting business rates.

Only hours before, Business Secretary Andrea Leadsom was promoting the business rate cuts as stimulating for business growth and saying previous cuts had led to increased revenue for the Exchequer.

In his election pitch to the CBI, Labour leader Jeremy Corbyn offered a ­revamp of the ­apprenticeship levy as the centrepiece of his business platform.

Mr Corbyn promised companies more flexibility in how the levy operated. He will seek to soften the blow of moves to make companies put 10 per cent of their equity into ­“inclusive ownership funds” by pledging a portion of the £700m raised in dividends would be used to train apprentices.

CBI director-general Carolyn Fairbairn said that some of ­Labour’s policies, including a pledge to nationalise the bulk of Britain’s broadband network, threatened to “crack the foundations of our economy”.

Asked if Mr Corbyn was a friend to business, she said the CBI “really understand the questions that Labour are asking. They are asking questions about inequality, they are asking questions about public services. These are the right ones.

“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.”

Referring to “bolt from the blue” renationalisation plans, specifically for British Telecom, she said: “That will freeze investment. I have talked to businesses who are already sitting there thinking ‘maybe we’re next’.”

She later issued a general warning that as politicians ­exploited declining faith in business “ideologies from both the left and right have emerged to fill the gap, pushing debate to extremes and offering superficial fixes to complex problems”.

“We simply cannot ­afford ­another wasted year of political paralysis, indecision and distraction while productivity and ­investment suffer,’’ she said.

Additional reporting: The Times