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Johnson Offers Business an Olive Branch as U.K. Election Revs Up

Robert Hutton and Lucy Meakin
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Johnson Offers Business an Olive Branch as U.K. Election Revs Up

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British Prime Minister Boris Johnson will try to win business leaders to his side with an offer of tax cuts at the start of a crucial week in the U.K. general election campaign.

Britain goes to the polls on Dec. 12 in a vote that could determine how -- or whether -- the country leaves the European Union. A slew of opinion polls in Sunday’s newspapers all put Johnson’s Conservatives well ahead of the opposition Labour Party.

But the week ahead features several potential landmines for the premier: He’ll take on Labour leader Jeremy Corbyn head-to-head on Tuesday, and the two men will appear separately taking questions from a TV audience on Friday.

The week will start with the prime minister addressing the the annual conference of the U.K.’s main business lobby group, the Confederation of British Industry. It could be a tense moment, given the history of animosity between the CBI and the U.K.’s pro-Brexit campaign, which Johnson led.

“Let’s not beat around the bush, big business didn’t want Brexit,” Johnson will say, according to speech extracts released in advance. “You made that clear in 2016, and this body said it louder than any other. But what is also clear is that what you want now -- and have wanted for some time -- is certainty.”

Before he became prime minister, Johnson reportedly dismissed the concerns of industry over Brexit with a four-letter epithet. Now his pitch is certainty. Having been the lead campaigner to get Britain out of the European Union, and one of the lead rebels who stopped a Brexit deal getting through Parliament, Johnson is pitching himself as the man best-placed to lead the country on.

‘Fundamental Review’

In the wider election campaign, he continues to face questions on a series of issues: There’s a report into Russian election interference that his office suppressed; and his American entrepreneur friend Jennifer Arcuri, caught up in a controversy involving the prime minister, has given an interview to ITV saying she wishes Johnson had declared their relationship as a potential conflict of interest when he was London mayor. In an interview broadcast Sunday evening, she said Johnson had cast her aside “like I am some gremlin.”

Then there’s the completely unforeseeable. Prince Andrew’s interview about his relationship with the the pedophile financier Jeffrey Epstein is still dominating the headlines, and could yet have impacts beyond the Royal family.

At the CBI, aiming to persuade business he has their best interests at heart, Johnson will say a Conservative government victory at the Dec. 12 election will mean:

a “fundamental review” of business rates, the tax on propertyan increase in the threshold at which firms start paying employment taxes to 4,000 pounds ($5,170) from 3,000 poundsan increase in the tax relief on buildings to 3% from 2%an increase in tax relief on research and development to 13% from 12%

The party said these measures, combined, would cost the government 1 billion pounds a year.

The other side of Johnson’s case to business will be represented by Corbyn, who will address the CBI conference after the premier. Labour has already promised tax rises both for business and for the wealthy -- a group that will include most of his audience. On Friday, the party shocked industry by announcing that if it won the election, it would take the U.K.’s broadband infrastructure into public ownership.

‘Maybe We’re Next’

Carolyn Fairbairn, director-general of the CBI, said Sunday that Labour’s announcement had come as a “bolt from the blue” and left her members worried. “I have talked to businesses who are already sitting there thinking maybe we’re next,” she told Sky News. Corbyn would struggle to portray himself as a friend of the corporate world, but will try to argue that a government he leads can still be an ally. He’ll promise Labour would train 80,000 apprentice technicians and engineers a year.

“Climate Apprenticeships will offer training to school leavers and workers looking to change jobs mid-career, creating the engineers, technicians and construction workers we need to transition to a green economy,” Corbyn will say. “The Tories have failed to invest in our economy.”

But his audience are likely to worry about what else he has up his sleeve. Labour on Saturday signed off its policy platform for the election, and while it won’t be unveiled until Thursday, according to the Mail on Sunday its policies include:

A “Right to Food Act” introducing price controlsA windfall tax on oil companiesAn expansion of the sugar taxDropping a plan to allow private tenants to buy their homes

Tories On Side

Johnson on Sunday revealed something that gives credibility to his claim he can break the Brexit deadlock: every Conservative candidate has signed a pledge to vote for his deal if elected.

But while that could get his deal through Parliament, what’s not covered by the pledge is how Conservatives will vote on subsequent issues in the Brexit process. Johnson is currently promising that the Brexit transition period, in which he aims to negotiate a free trade agreement with the EU, will end in December 2020. If that proves ambitious -- most deals take years to negotiate -- he’ll need members of Parliament to agree to a delay. If he wants a close relationship with the EU, it could be harder to get Tory support.

Foreign Secretary Dominic Raab, questioned about the plan for a trade agreement, admitted that it will necessarily be a compromise. But he said there’s an opportunity to reach a “win-win” that is “great for the U.K., but also good for our European friends.” Asked if the U.K. could leave the EU without a deal, Raab said, “no, it’s not what we want to do.” He clarified: “I don’t think it’s remotely likely.”

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net;Lucy Meakin in London at lmeakin1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Robert Jameson

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