Johnson pledges to scrap corporation tax cut in u-turn

Prime Minister Boris Johnson on Monday said he would scrap a planned cut in corporation tax and spend the revenue on the National Health Service.

Johnson told delegates at the Confederation of British Industry's annual conference the decision was the "fiscally sensible thing to do”. The planned cut would reduce the rate to 17% from 19%.

The move marked a serious u-turn for the prime minister, who has been adamant in the past that tax cuts actually raise revenues.

As recently as this year's Conservative Party leadership contest Johnson said: “Every time corporation tax has been cut in this country it has produced more revenue.”

Corporation tax has been cut several times since the 2008 financial crash cause by the banking sector, when it was at 30%. Labour wants to lift it to 26%.

That pledge, and the promise to renationalise several industries, combined with a continuous attack on the Conservatives as pro-business at the expense of workers, forced Johnson into the surprise change of tack.

On the markets, the pound was up against the dollar, trading up 0.43% at $1.2953 as the latest opinion polls gave Johnson a lead over the opposition Labour Party of 10 – 17 points.