UK business unease over Labour's election plan

British business leaders have expressed disappointment at many of the proposals in the Labour Party's manifesto for next month's general election.

city of London skyscape
Jeremy Corbyn, the Labour party leader, vowed to "go after the tax dodgers, the bad bosses" as he launched the manifesto on Thursday.Proposals included a rise in corporation tax from 19 to 26% by 2022, cuts in R&D funding and corporate tax reliefs, the imposition of a new tax on multinationals and an extension of the financial transactions tax.

Freedom of movement for EU27 nationals

The manifesto also abandoned a plan to continue freedom of movement for EU27 nationals after Brexit. Instead, Labour said the subject would form part of its negotiations with Brussels on a new Brexit deal, which the party said could be agreed within six months and then put to a second referendum.Although business groups applauded plans to spend billions on infrastructure projects, there were concerns about the party's ambitions to bring rail, mail, water and energy back into public ownership, and to deliver free, full-fibre broadband to everyone in the country through a nationalised service.

BCC: excessive intervention in business and sweeping tax rises would smother growth

Adam Marshall, director-general of the British Chambers of Commerce, commented, “No government can deliver the prosperity that people and public services depend on, or achieve net-zero, without a true partnership with business. When business thrives, people and communities thrive too.“Millions of business people care deeply about their employees and their communities and they need the next government to take decisive action to restore business confidence and unleash business investment and growth."Businesses will welcome proposals to reform skills funding, upgrade our failing infrastructure and review business rates. With more firms struggling to recruit, a more open and flexible approach to immigration would also be good news for the economy.“But command and control isn’t the way. Excessive intervention in business governance and sweeping tax rises would suppress innovation and smother growth.”

IoD: most business leaders behind plans to tackle climate change

Edwin Morgan, director of policy at the Institute of Directors, said most business leaders were behind the party's plans to tackle climate change and to inject dynamism to all parts of the country."The next government must tap this resource, not alienate it. While new investment in infrastructure and the green economy is welcome, taken as a whole, Labour's measures on business risk being too much stick and not enough carrot," he said."Labour's plans to boost prosperity nationwide by improving local support for growing enterprises, expanding the apprenticeship levy, and removing quarterly reporting requirements for small firms will sit well with business leaders."But he added that many directors will have reservations that Labour's "state-first" plans for the economy, which could ease out private enterprise involvement. "Labour's approach on corporate governance is frequently insightful but almost always one sided," he said.

Corporation tax hikes "disappointing , but not surprising"

The TaxPayers' Alliance, a pressure group campaigning for a low tax society, described the proposed tax increases as a "war on business" that would end up punishing employees.John O'Connell, chief executive of the group Alliance, said: "Hiking taxes and seizing property will mean abject misery for millions of British families and businesses - if some of these plans are implemented, we can kiss goodbye to the investment we need for post-Brexit prosperity."Enterprise and innovation create jobs and prosperity. Everyday families should see through the cruel punishment taxes on offer."Tax expert Genevieve Morris, a partner at accounting and tax advisory firm Blick Rothenberg, said the corporation tax hike was "really disappointing, but not surprising"."They don't seem to appreciate how beneficial the attractive corporation tax rate has been to encourage inward investment into the UK, which then creates jobs and contributes through employers' national insurance," she said.

Read more news and views from David Sapstead

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