Boris Johnson has announced he intends to ditch plans to cut cooperation tax if the Conservatives win the election.
The Prime Minister pledged to spend the £6 billion generated by the taxation on the NHS and other public services.
During Johnson’s speech at the Confederation of British Industry’s annual conference he urged business leaders to show understanding despite his failure to deliver on the party’s promise to reduce the tax to 17% by 2020.
The announcement by the Prime Minister has been met with mixed reactions from the business community.
It does precisely nothing except defer a tax cut. It's not *new* money, just a (temporary) alternative for spending existing tax receipts. It's jiggery pokery.
— Simon Deane-Johns (@sdjohns) November 18, 2019
I've long argued that once we got down to 20% further cuts to corporation tax had diminishing benefits – there are plenty of better other uses of the money to support growth or social priorities https://t.co/A2nsiYEqaR
— Rupert Harrison (@rbrharrison) November 18, 2019
The Director General of the CBI, Carolyn Fairbairn 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 the costs of doing business and promote growth.”
The commitment to further reduce corporation tax was made by former Chancellor of the Exchequer, George Osbourne, during his Budget back in 2016. The rate has fallen from 28% to 19% since 2010 and the next proposed cut would’ve seen it drop to 17%.
- Labour manifesto to be released Thursday
- General Election 2019: Party promises
- Tories promise to slash business rates
Political commentators were quick to point out how other cabinet members were defending the cuts and its benefit to the economy.
Tories: Cutting corporation tax increases revenues.
Also Tories: We're delaying corporation tax cut to save money.#Cbi2019
— Ben Wright (@_BenWright_) November 18, 2019
Will be tricky for Tories to ever again make the argument that reducing corporation tax leads to higher revenues. Unless they're now saying that 19 per cent is the sweet spot.
— Christian May (@ChristianJMay) November 18, 2019
Boris Johnson tells CBI he’s “postponing” further cuts in corporation tax (from 19% to 17%) because this will save £6bn to spend on public services. Yet only this morning his Business Secretary was telling the BBC that previous cuts in CT had generated MORE revenues.
— Andrew Neil (@afneil) November 18, 2019
Business secretary, Andrea Leadsom, appeared on BBC Radio 4’s Today Programme only hours earlier claiming HMRC’s tax intake had increased to “something like 45 percent” since the reduction began.
Her response was mocked on Twitter. Even by presenter Nick Robinson.
When I asked @andrealeadsom how the Conservatives would pay to cut business rates she replied "You're assuming that money comes from somewhere." Well, yes …
— Nick Robinson (@bbcnickrobinson) November 18, 2019
Words: Dan Taylor | Featured Image: Dianna Bonner