Katy Balls Katy Balls

Labour woos business with a corporation tax pledge

Rachel Reeves speaking at the Oval (Credit: Getty images)

One of the big changes in the Labour party since Keir Starmer took over from Jeremy Corbyn is the approach to business. Rachel Reeves, Starmer’s shadow chancellor, made wooing the business community a top priority. Today, Starmer and Reeves went further with the ‘Labour Business Conference 2024’ held at The Oval, where Reeves said that a Labour government would not raise corporation tax in its first term. Instead, she told the audience of FTSE 100 chief executives that a Labour government would keep the current cap of 25 per cent. This, she said, would provide certainty to business.

Reeves went further still, adding that she would keep open the possibility of cutting corporation tax in the event that other countries reduced their rates, which could lead to the UK looking uncompetitive.

The announcement at The Oval today (where tickets reportedly sold out in just a few hours) is meant to do two things. First, further flesh out why Labour believes the UK could benefit from a ‘stability premium’ if they get into government. Reeves attacked the Tories for multiple changes to the rate and general tinkering that has meant business has often lacked certainty. Labour, therefore, would be best placed to fix this, she argued.

Second, Reeves is trying to neutralise areas where the Tories are likely to attack during an election. The Conservatives are already running an aggressive campaign criticising Labour’s supposed plan to borrow £28 billion. In a sign that it is having some effect, the Q&A today was dominated by questions on the floundering green spending pledge (read my column in this week’s magazine for the conversations taking place privately across the Labour party on this issue). The Tories plan to expand their attacks to suggest Labour are bound to raise taxes more generally. By making this commitment today, Reeves will be hoping that will be harder to do.





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