The old joke used to be that the Church of England was the Conservative Party at prayer. Almost as true, the Confederation of British Industry (CBI) was once the Conservative Party at work. No longer: “Theresa May’s Conservatives” – the manifesto’s brand – has retreated from business. The party’s proposals include:
- A corporation tax rate of 17% in 2020 (already in legislation).
- A simplification of the tax system which “…remains too complicated”.
- “…longer-term reforms” to, and “a full review”, of, the business rates system, including an exploration of “self-assessments in the valuation process”.
- Action “to ensure that the interests of employees on traditional contracts, the self-employed and those people working in the gig economy are all properly protected”.
- Giving the Pensions Regulator “the right to scrutinise, clear with conditions or in extreme cases stop mergers and, takeovers or large financial commitments…” There will also be an “update (to) the rules that govern mergers and takeovers, with a focus on overseas takeovers.
- Executive pay packages will be “subject to strict annual votes by shareholders and listed companies will have to publish the ratio of executive pay to broader UK workforce pay”.
- A doubling of the Immigration Skills Charge to £2,000 a year, alongside widespread tightening of immigration controls. The CBI labels the immigration approach as the manifesto’s “Achilles’ heel”.
Labour’s business proposals are more immigration-friendly, but other aspects are not:
- A staged increase in corporation tax to 26% (21% small profits rate) by 2020/21.
- An “efficiency review” of corporation tax reliefs, expected to yield £3.8 billion a year.
- “A package of reforms to business rates…exempting new investment in plant and machinery”. Longer term, there would be a review of “the entire business rates system” and possibly a land value tax.
- A new “Ministry of Labour”, the strengthening workers’ rights and empowerment of their trade unions.
- Amending the takeover rules “to ensure that businesses identified as being systemically important have a clear plan in place to protect workers and pensioners” on takeover.
- Introducing an “Excessive Pay Levy”, payable by employers, on total compensation exceeding £330,000.
The Liberal Democrats’ proposals are a blend of the other two parties’ ideas, including:
- Corporation tax would rise to 20%, backed up with “tough action against corporate tax evasion and avoidance”.
- A review of business rates and their possible replacement with a Land Value Tax.
- “Modernise employment rights to make them fit for the age of the ‘gig economy’.
- A requirement for “binding and public votes of board members on executive pay policies”.
If all that sounds unappetising from a business viewpoint, then remember, another truism: businesses do not have a vote…