Johnson unveils £6bn U-turn on tax cuts for business

Tom BelgerFinance and policy reporter

Prime minister Boris Johnson has announced a major U-turn on planned tax cuts in front of business leaders, urging them not to “storm the stage and protest.”

The Conservative leader said delaying the government’s plans to slash corporation tax from 19% to 17% by the end of the decade would raise £6bn for public services.

Speaking at the Confederation of British Industry (CBI) annual conference, he said the decision “doesn’t mean we are in any way averse to reducing taxes on business.”

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He also told business leaders his Brexit deal was the “best thing” for the UK economy and promised to hand firms a separate £1bn giveaway in other tax cuts.

Johnson said Britain could benefit from a “pent-up tidal wave of investment” after Brexit that had been held back by politics at Westminster.

More than 1,000 business leaders listened as Johnson set out his pitch to business, with Labour leader Jeremy Corbyn and Liberal Democrat leader Jo Swinson also lined up to speak on Monday.

READ MORE: Ex-Tory minister says Johnson victory means a ‘disastrous’ no-deal Brexit

The Conservative leader also used his speech to hit out at his Labour rival, warning “Corbynomics means higher taxes for everyone” and calling Labour’s Brexit position “positively mind-boggling.”

He said his party backed ordinary people running their own firms: “We don’t sneer at them, we cheer for them.”

The Labour party’s plans meant “yet another toxic and divisive referendum campaign,” as well as “month if not years of dither, delay, division,” according to Johnson.

“The worst thing now is the continuing economic uncertainty, people waiting to take on new staff, or invest in property, or just to invest in this country,” he said.

He admitted the economy was “only firing on half its cylinders,” but blamed parliament for failing to deliver Brexit.

READ MORE: Pound rises as Tories’ lead grows in latest poll

Firms welcomed his pledge to cut business rates, but one business leader said Conservative plans to hold another government review of the property tax was “going over old ground.”

Johnson also admitted the huge scale of business alarm over Brexit, saying big business “didn’t want Brexit” but promising certainty through his deal with Brussels.

He said his party would end the “uncertainty and confusion,” helping firms to plan, invest and grow.

“Whilst you didn’t want it, the people did vote for it. And so it was for politicians to deliver it,” he said.

The speech ahead of the election next month also saw Johnson promise to cut national insurance bills for more than half a million firms by raising the ‘employment allowance’ from £3,000 to £4,000.

READ MORE: Tory lead over Labour grows in latest UK election poll

Johnson’s claim his deal is the “best thing” for the economy comes after a leading business leader told the same crowd it does not leave a long enough transition period to negotiate a future trade deal.

Carolyn Fairbairn of the CBI had warned earlier on Monday there was a “real possibility” of Britain failing to secure a trade deal before the deadline at the end of 2020.

“Let’s not box ourselves in and create yet another cliff-edge that will involve all of that pain, all of that stockpiling, all of that slowdown, let’s keep our options open,” she said in her own speech to the conference.

Johnson’s claim also comes in spite of a recent study which warned his proposed free trade deal would wipe £70bn ($90.1bn) off Britain’s long-term economic growth compared to staying in the EU.

The National Institute of Economic and Social Research said the damage to EU trade would more than outweigh any gains from reduced uncertainty, lower EU budget payments and other new trade deals elsewhere.

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