Frances Ball 26 Nov 2019 09:38am

Conservative manifesto “could go further”, businesses respond

Although some measures have been welcomed by the business sector, Conservative manifesto pledges have found a mixed response among lobby groups

The CBI welcomed the “pro-enterprise vision”, but looked for a more ambitious approach on access to skills, and on reaching net zero. The current government target is net zero carbon emissions by 2050.

Inevitably, one central promise is that the Conservative party will take the UK out of the EU by early 2020 if they win a majority.

For the CBI, an “inconvenient truth” remains. “Sustainable economic growth will be risked if there is a needless rush for a bare bones Brexit deal that would slow down our domestic progress for a generation,” the CBI said.

“On Brexit, firms need the certainty of a closely aligned, frictionless relationship with the EU. The stability provided by transition is a vital first step, but it cannot be a Trojan horse for a bad deal. Supporting growth and funding public spending requires a comprehensive trade agreement for goods and services, and an end to damaging, politically driven cliff edges that have blighted our economy. Whoever is in Government must take the time needed to get this right,” the business group added.

The BCC echoed this, condemning the decision to categorically reject the possibility of a longer transition period as the UK leaves the EU.

Like many business lobby groups, the BCC looks for more reassurance from the manifesto.

“There are some welcome proposals in the Conservative manifesto on real-world business issues such as training, road maintenance and childcare,”, the BCC said, “but businesses still need much more clarity on big-ticket items like HS2, how the UK’s future immigration system will work in practice, and how real power will be devolved to our towns and cities”.

The BCC added, “Big pledges to increase spending and freeze personal tax rates cannot be paid for on the backs of hard-pressed businesses. Higher business taxes or costs would undermine confidence and investment at precisely the time that it is needed most”.

Among its promises is a triple tax lock, committing not to raise income tax, national insurance, or VAT. For the IFS, this is “perhaps the biggest, and least welcome, announcement”.

The IFS said the tax lock plays a part in an overall “fundamentally damaging narrative – that we can have the public services we want, with more money for health and pensions and schools – without paying for them. We can’t.”

An ICAEW spokesperson said, "This is a cautious and measured set of policy proposals, but with less detail than we would have hoped for on some of the big challenges faced by the nation, in particular sustainability, technology and the public finances. We welcome the commitment to stability that underlines this manifesto, but the risk with deferring decisions in these key areas is that they may end up being more costly in the long-run."