Labour lacks the ambition to boost the City’s potential
While Labour will raise businesses taxes, only the Conservatives understand that it’s entrepreneurs that create growth, wealth and opportunity, says Bim Afolami
Elections are about a choice informed by a reflection on the past to make a crucial judgement about our future.
Over the past 14 years, the UK, with London at its heart, has faced several major global challenges, such as the aftermath of a once-in-a-century pandemic and a massive energy shock triggered by Putin’s illegal war in Ukraine,
But despite this, the Conservatives never stopped believing that our country and our capital, London, could continue to grow – and that London could continue to be resilient with a fast-paced, vibrant economy.
Since 2010, the UK economy has created nearly 800 jobs every single day, grown faster than any large European economy, and attracted substantial greenfield investment, second only to the US and China.
The IMF now projects that the UK will grow faster than France, Germany, Italy, or Japan over the next six years.
While some of this is due to the government’s tough decisions, make no mistake: It is businesses and entrepreneurs, like the readers of City PM, who spurred that growth.
You create wealth and opportunity in this city, and having a Government that continues to be on your side has never been more important.
That is what the Conservative Party can promise.
Sure, while both Labour and Conservatives agree on the need for economic growth, only the Conservatives have a plan to achieve it.
To grow the economy, businesses must have the fertile ground needed in which to grow.
That’s one of the reasons we cut National Insurance contributions, a pro-growth tax cut that the OBR said would bring 200,000 people back into the workplace.
We also implemented full expensing for capital investment, which has transformed Britain’s low business investment levels.
This went hand-in-hand with the super deduction and those policies have propelled the UK to lead the G7 in business investment since 2020, second only to Italy.
And we are going further.
Our commitments to back business are clear. Unlike Labour, we will not raise corporation tax or increase Capital Gains Tax.
By the end of the next parliament, we plan to have abolished the main rate of National Insurance, taking 93 per cent of self-employed people out of National Insurance altogether.
Furthermore, we are cutting taxes for 2m self-employed people, the backbone of small businesses. From April this year, the main rate of Class 4 NICs has been cut, bringing taxes down by £650 for an average self-employed worker earning £28,000 a year.
We’re also putting up the Employment Allowance for National Insurance Contributions, which will take 40 per cent of businesses out of paying NICs altogether.
We know some businesses need support with business rates, and that’s why we extended relief to retail, hospitality, and leisure businesses. We’re bringing in a £2.4bn business rate cut, with a fifth-year extension of the 75 per cent business rate relief for eligible properties.
It benefits 230,000 properties across the UK, and here in London, it’ll really make an impact as it includes independent pubs. It will save an average pub over £13,000 a year.
That goes together with the current Small Business Rates Relief we introduced, exempting over 700,000 businesses from paying business rates entirely.
Our plan is working, and that’s why we are committed to supporting small businesses even more over the next five years. A £4.3bn package freezes the small business multiplier on business rates for the fourth consecutive year—a saving of £1,650 on average.
Partner this with the raising of the VAT threshold from £85,000 to £90,000, the simplification of reporting requirements and the Growth Guarantee Fund (which has helped 11,000 small businesses access the necessary finance for investment and growth) we have since more than 1.1m new business set up in this country since 2010.
But there is more to be done.
As we look towards the future, the choice is clear.
Labour’s lack the ambition and coherent strategy necessary to boost our city’s extraordinary potential.
By contrast, the Conservative vision is one of lower taxes and enhanced public services, backed by a dynamic, vibrant private sector.
We will get the public sector to achieve two per cent productivity efficiencies annually, meaning we can maintain fiscal discipline while investing in growth.
This approach starkly contrasts Labour, which has not addressed how to fund necessary increases in public spending without hiking up everyone’s taxes.
London and the UK’s economy are brimming with opportunities and with a Conservative government committed to making tough decisions, we can ensure a prosperous future for businesses and entrepreneurs.
Investing in the UK is a great opportunity right now, but it requires a government with the vision and resolve to seize it.
Bim Afolami is Conservative candidate for Hitchin and former Economic Secretary to the Treasury