In a campaign which hasn’t involved many attention-grabbing announcements thus far, yesterday’s speech by the Prime Minister to the CBI was a rare headline-maker. Normally, the format for these big third-party events – the WI convention, the Police Federation, the CBI, IoD and FSB conferences – is pretty set: politician stands up, politician delivers speech, politician seeks some approval, politician hopes not to incur audible or visible wrath of audience. Sometimes it works, sometimes it doesn’t, but that’s basically it.
Or at least that used to be it. The reason Boris Johnson’s CBI speech was so striking was that it turned that idea on its head – instead of a supplicant, come to beg for their favour, Johnson used the CBI conference as a stage on which to distance himself from…the CBI. Using that particular setting to announce the postponement of Corporation Tax cuts was a canny piece of comms, which effectively made the event an opportunity to signal the Prime Minister’s values, a message strengthened by being at the expense of his host and audience.
And it is about broadcasting the Government’s values, above all else: rather than simply announce more spending on public services and try to downplay or simply separate out cancelled tax cuts, they actively chose to link the two. The CBI were told:
“We are postponing further cuts in corporation tax. And before you storm the stage and protest let me remind you that this saves £6 billion that we can put into the priorities of the British people including the NHS.”
There are obvious resonances between this tactic and the Vote Leave campaign. The money for the NHS touchstone, the amplifying of the message by behaving counterintuitively, and, of course, the hijacking of the CBI’s conference in order to do it. It isn’t just trolling for amusement (though I’d be surprised if there wasn’t some laughter about the idea when it was first proposed), it’s done for effect.
It’s a political rather than simply economic shift in policy. The Prime Minister himself has said – rightly – that lowering Corporation Tax has increased revenues in recent years. You might argue that the Laffer Curve is a curve, and therefore that such dynamic returns might diminish as the tax rate goes lower and lower, but notably Johnson did not do so. Such arguments might be right or wrong, but what’s notable is they don’t seem to enter the calculation.
Instead, there appear to be three reasons why he feels it necessary and worthwhile to pursue the policy.
First, it offers a very visible answer to the Labour critique that the Conservatives prioritise business ahead of public services.
Second, it provides a clear and understandable answer as to where some of the fiscal wriggle room might come from to finance spending on infrastructure – £6 billion by Johnson’s account.
Third, Labour have created the space for a Conservative Prime Minister to be a bit less generous to business and yet still be the safer option. The prospect of arbitrary nationalisations at unknown prices, share hijacks, forced delisting of companies who fail to fulfil as-yet secret targets, and goodness knows what other measures all sound a lot more painful than simply continuing to pay the current rate of tax.
There will be plenty of Conservatives – including, I confess, me – who dislike this step as an economic and fiscal decision. But the fact is we aren’t the target audience. Where, after all, are we going to go?
Instead, Johnson was speaking directly to the voters he is seeking to win over in December. Contrary to stereotype, that conversation isn’t just about Brexit, it’s about far more. About public services, about opportunity, about security (economic at least as much as military), and about fairness.
His audience don’t hate business, even big business. They don’t thirst to see it bashed for the sake of it. They understand that a massive tax raid on their employers would not be good news for employees, jobseekers or, ultimately, schools and hospitals.
But they believe in fairness, very strongly. And if they are unlikely to be enthusiastic about business-bashing taxation, they are equally unlikely to prioritise large businesses for further help. They feel their families and communities are in more pressing need than the people who own and run large businesses. They want measures that will affect their lives directly, and a sense that their priorities are being considered.
Yesterday we saw Johnson very publicly state that the NHS is a higher priority for him than the members of the CBI. I wouldn’t be at all surprised to see him go on to target new business measures at small enterprises, in a further finessing of the message towards the enterprises that his desired voters are more likely to be keen on, or to run. The boardrooms of the City, it seems, will have to wait their turn.