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Company bosses back Tories on tax Company bosses back Tories on tax
(about 1 hour later)
Bosses of some of the UK's biggest firms have backed Conservative plans to scrap part of a planned National Insurance rise if they win power.Bosses of some of the UK's biggest firms have backed Conservative plans to scrap part of a planned National Insurance rise if they win power.
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 "endanger" economic recovery.They said the 1% NI increase, due in April 2011, was a "tax on jobs" and would "endanger" economic recovery.
In response, Labour said the Tory plan amounted to an "unfunded promise". Labour said the Tory plan amounted to an "unfunded promise".
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. Ministers have argued that the tax-cutting pledge contradicts the opposition's long-standing position that reducing the UK's budget deficit should be the number one priority for the next government.
'Wrong time''Wrong time'
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. If they win the election, the Conservatives plan to scrap the National Insurance rise for anyone earning less than £45,400 a year, which they say would save people £150 a year on average and also reduce the tax burden on firms.
Cutting government waste won't endanger the recovery, but putting up national insurance will Letter to the Daily TelegraphCutting government waste won't endanger the recovery, but putting up national insurance will Letter to the Daily Telegraph
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 King. The endorsement of their position comes from a group of high-profile businessmen, including Marks & Spencer chief executive Sir Stuart Rose, Sainsbury's boss Justin King and easyGroup's Sir Stelios Haji-Ioannou.
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".
'Counter-productive''Counter-productive'
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 addition, they also support the Conservatives' plan to pay for the move by cutting £6bn of government waste and bureaucracy in 2010-11 instead - an aspiration 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 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."
Britain needs a serious deficit reduction plan not Tory double-counting Liam Byrne, Chief Secretary to the Treasury Britain needs a serious deficit reduction plan, not Tory double-counting Liam Byrne, Chief Secretary to the Treasury
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. 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." "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.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." "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."
Liberal Democrat Treasury spokesman Vince Cable said "of course" it would be desirable to avoid a rise in National Insurance, but said the "problem is how to pay for it". Liberal Democrat Treasury spokesman Vince Cable said "of course" it would be desirable to avoid a rise in National Insurance, but added the problem was how to pay for it.
Mr Cable added: "What is utterly unconvincing about the Tories' proposals is that they rely on efficiency savings they themselves have ridiculed."Mr Cable added: "What is utterly unconvincing about the Tories' proposals is that they rely on efficiency savings they themselves have ridiculed."
TV debateTV debate
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.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.
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 businessmen - two of whom sit on the prime minister's business council - have an obvious incentive in opposing a tax rise that will cost their companies money.
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.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 Mr Cable, Mr Osborne said the National Insurance rise was "the wrong priority" and would penalise companies.In a three-way debate on Monday with Chancellor Alistair Darling and Mr 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 Tory 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)