Plans to slash corporation tax have been shelved by the Prime Minister, who said it would save £6 billion to spend on public services.
Speaking at the Confederation of British Industry (CBI) conference this morning he said he will put an end to Brexit ‘uncertainty and confusion’ if the Tories are returned to power after the December 12 General Election.
Boris Johnson vowed to cut business rates and National Insurance contributions paid by businesses but rowed back on a pledge made this month to slash corporation tax from 19 to 17 per cent.
He said: ‘Before you storm the stage and protest, before you storm the stage, let me remind you this saves us £6 billion that we can put into the priorities of the British people, including the NHS.
‘I hope you understand that it is the fiscally responsible thing to do. It doesn’t mean that we are in anyway we are averse to reducing taxes on businesses.’
Johnson has faced questions about how he would pay for the extra public spending that he has promised, without ramping up borrowing sharply.
In September, Chancellor Sajid Javid announced the biggest increase in day-to-day spending in 15 years in what was widely seen as an attempt to counter the Labour Party’s promises.
Speaking to delegates this morning in Greenwhich, southeast London, he added: ‘The alternative is Jeremy Corbyn who would whack it back up to the highest levels in Europe.’
Labour have said they want to gradually increase corporation tax back to 26 per cent – which would be two per cent lower than the rate when Gordon Brown left office in 2010.
The Conservative Party plan to increase the employment allowance from £3,000 to £4,000, reducing National Insurance contributions by up to £1,000 for more than half a million businesses.
They also hope an R&D tax credit rate will rise from 12 per cent to 13 per cent, which they say will boost manufacturing along with the professional, scientific and technical service sectors.
Johnson tried to extend an olive branch to industry leaders, many of whom are anxious about the fallout of the UK leaving the European Union.
He says he knows big business ‘didn’t want Brexit’ but that one thing they are crying out for is economic certainty.
The PM said that promptly withdrawing from the European Union at this point would be the ‘best thing’ for the economy.
He added: ‘We have to get Brexit done because it is the best thing for our national mood, and the best thing to take our country forward.
‘And by the way it’s the best thing for the economy because 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.’
Johnson spoke of ‘uniting and levelling up the country’ as he referred to parts of the country who are seriously lagging behind London.