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Company bosses back Tories on tax Company bosses back Tories on tax
(30 minutes later)
A group of senior business leaders has come out in favour of Conservative plans to scrap part of the government's planned National Insurance rise.A group of senior business leaders has come out in favour of Conservative plans to scrap part of the government's planned National Insurance rise.
The 23 top executives, including the bosses of Marks & Spencer, Sainsbury's and Next, "welcomed" the Tory pledge in a letter to the Daily Telegraph.The 23 top executives, including the bosses of Marks & Spencer, Sainsbury's and Next, "welcomed" the Tory pledge in a letter to the Daily Telegraph.
They said the 1% NI increase, due in April 2011, was a "tax on jobs" and would come at "exactly the wrong time".They said the 1% NI increase, due in April 2011, was a "tax on jobs" and would come at "exactly the wrong time".
Labour has said the Tories' position is "irresponsible" and an economic risk. In response, Labour said the Tory plan amounted to an "unfunded promise".
They argue that the tax-cutting pledge contradicts the opposition's long-standing position that reducing the budget deficit should be the number one priority for the next government. Ministers have argued that the tax-cutting pledge contradicts the opposition's long-standing position that reducing the huge budget deficit should be the number one priority for the next government.
'Wrong time''Wrong time'
On Monday, the Conservatives outlined plans, if they win the election, to scrap the tax rise for anyone earning less than £45,400 a year - which they say would save people £150 a year. If they win the election, the Conservatives plan to scrap the tax rise for anyone earning less than £45,400 a year - which they say would save people £150 a year and also reduce the tax burden on firms.
The endorsement of their position comes from a group of high-profile businessmen, including Marks & Spencer chief executive Sir Stuart Rose and Sainsbury's boss Justin Rose.The endorsement of their position comes from a group of high-profile businessmen, including Marks & Spencer chief executive Sir Stuart Rose and Sainsbury's boss Justin Rose.
Writing to the Telegraph, the business leaders said the proposed NI increase was an "additional tax on jobs" and would come into effect "at exactly the wrong time in the economic cycle".Writing to the Telegraph, the business leaders said the proposed NI increase was an "additional tax on jobs" and would come into effect "at exactly the wrong time in the economic cycle".
Cutting government waste won't endanger the recovery - but putting up national insurance will Letter to the Daily Telegraph Cutting government waste won't endanger the recovery, but putting up national insurance will Letter to the Daily Telegraph
In addition, they also support the Conservatives' plan to pay for the reversal by removing £6bn of government waste and bureaucracy in 2010-11 - an aspiration which other parties say is totally unrealistic. In addition, they also support the Conservatives' plan to pay for the reversal by cutting £6bn of government waste and bureaucracy in 2010-11 - an aspiration which the Lib Dems say is totally unrealistic.
In the letter, the company bosses said they were responsible for ensuring their firms came through the recession in "good shape" and that the NI rise would be counter-productive.
"In the last two years, businesses across the country have cut their costs without undermining the service they provide," the letter says. "It is time for the government to do the same.""In the last two years, businesses across the country have cut their costs without undermining the service they provide," the letter says. "It is time for the government to do the same."
It adds: "Cutting government waste won't endanger the recovery - but putting up national insurance will." It adds: "As taxpayers we would welcome more efficiency in government. As businessmen we know that stopping the national insurance rise will protect jobs and support the recovery.
"Cutting government waste won't endanger the recovery, but putting up national insurance will."
Reacting to the letter, Chief Secretary to the Treasury Liam Byrne questioned the Tories' ability to pay for the tax cut.
"We are already making the efficiency gains that the Tories claim will pay for their tax cuts," he said. "Britain needs a serious deficit reduction plan not Tory double-counting."
InterventionIntervention
The intervention comes just days before the likely start of the general election campaign, in which the twin tasks of sustaining the economic recovery and reducing government debt will be a defining issue. The intervention of the business leaders comes just days before the likely start of the general election campaign, in which the twin tasks of sustaining the economic recovery and reducing government debt will be a defining issue.
Sir Stuart and another signatory, Diageo boss Paul Walsh, sit on the prime minister's business council and Sir Stuart is due to attend a business breakfast with the prime minister on Thursday. BBC political correspondent Ross Hawkins said the businessmen - two of sit on the prime minister's business council - have an obvious incentive in opposing a tax rise which will cost their companies money.
BBC political correspondent Ross Hawkins said the endorsement by such a group of prominent businessmen would be a boost for the Tories, and its shadow chancellor George Osborne, as they seek to demonstrate the credibility of the party's economic plans. However, he added that their endorsement would be a boost for the Tories, and its shadow chancellor George Osborne, as they seek to demonstrate the credibility of the party's economic plans.
In a three-way debate on Monday with Chancellor Alistair Darling and his Lib Dem counterpart Vince Cable, Mr Osborne said the National Insurance rise was "the wrong priority" and would penalise both businesses and families. Britain needs a serious deficit reduction plan not Tory double-counting Liam Byrne, Chief Secretary to the Treasury
In a three-way debate on Monday with Chancellor Alistair Darling and his Lib Dem counterpart Vince Cable, Mr Osborne said the National Insurance rise was "the wrong priority" and would penalise companies.
But Mr Darling said the tax cut would take a "terrible risk" with the recovery while Mr Cable said the Tories' sums did not add up.But Mr Darling said the tax cut would take a "terrible risk" with the recovery while Mr Cable said the Tories' sums did not add up.
The 1p NI rise - applying to those earning more than £20,000 - is part of a £19bn tax-raising package which Labour says is necessary to meet its commitment to halving borrowing within four years.The 1p NI rise - applying to those earning more than £20,000 - is part of a £19bn tax-raising package which Labour says is necessary to meet its commitment to halving borrowing within four years.
The Conservatives have said they will go further and faster in tackling the deficit but have been accused of being vague about what this means and the degree of public spending cuts required.The Conservatives have said they will go further and faster in tackling the deficit but have been accused of being vague about what this means and the degree of public spending cuts required.
The full list of signatories of the letter: Sir Anthony Bamford (JCB); Bill Bolsover (Aggregates Industries); Dominic Burke (Jardine Lloyd Thompson); Ian Cheshire (Kingfisher); Neil Clifford (Kurt Geiger); Mick Davis (Xstrata); Aidan Harvey (Tullow Oil); Lord Harris (Carpetright); Justin King (Sainsbury's); Sir Chris Gent (GlaxoSmithKline); Ben Gordon (Mothercare); John Lovering (Mitchells and Butler); Graham Mackay (SAB Miller); Alistair McGeorge (Matalan); Nicolas Moreau (Axa UK); Stephen Murphy (Virgin Group); Alan Parker (Whitbread); Sir Stuart Rose (Marks and Spencer); Paul Walsh (Diageo); Joseph Wan (Harvey Nichols); Simon Wolfson (Next); Zameer Choudrey (Bestway Cash and Carry); Sir Stelios Haji-Ioannou (easyGroup)The full list of signatories of the letter: Sir Anthony Bamford (JCB); Bill Bolsover (Aggregates Industries); Dominic Burke (Jardine Lloyd Thompson); Ian Cheshire (Kingfisher); Neil Clifford (Kurt Geiger); Mick Davis (Xstrata); Aidan Harvey (Tullow Oil); Lord Harris (Carpetright); Justin King (Sainsbury's); Sir Chris Gent (GlaxoSmithKline); Ben Gordon (Mothercare); John Lovering (Mitchells and Butler); Graham Mackay (SAB Miller); Alistair McGeorge (Matalan); Nicolas Moreau (Axa UK); Stephen Murphy (Virgin Group); Alan Parker (Whitbread); Sir Stuart Rose (Marks and Spencer); Paul Walsh (Diageo); Joseph Wan (Harvey Nichols); Simon Wolfson (Next); Zameer Choudrey (Bestway Cash and Carry); Sir Stelios Haji-Ioannou (easyGroup)