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The Labor Party has secured a new letter of support from business leaders, this time backing its plans to overhaul the ‘apprenticeship levy’ if it wins the UK general election next week.
The 57 signatories backing Labour’s plan for a new “growth and skills levy” include executives from several major companies, including pub group Fuller’s, outsourcers Serco and Mitie, and Merlin Entertainments, the owner of Madame Tussauds, which is being backed by the private equity group Blackstone. .
Labor will argue that the intervention underlines how it has won widespread support from the business community. Last month it published a letter in which more than a hundred business people supported the party, although few of the signatories were current executives at major companies.
In contrast, the Conservative party’s attempt to gain support from senior business leaders has largely hit rock solid ground. The FT announced three weeks ago that the party was instead trying to launch a letter of support from small and medium-sized businesses.
In part, the business community’s support for Labor reflects efforts by leader Sir Keir Starmer and shadow chancellor Rachel Reeves to move the party towards the middle, promising fiscal fairness and a return to stability after years of political chaos. It could also reflect realpolitik that Labor is 20 points ahead of the Conservatives in the opinion polls.
Labour has promised to scrap the existing apprenticeship levy, which is unpopular with many business leaders, and introduce a ‘growth and skills levy’. This would allow businesses to use up to 50 per cent of their levy contributions to fund training through routes other than apprenticeships. Supporters say this would bring the UK system in line with the rest of Britain and many other countries.
The new letter – published on Thursday – warns that the number of apprenticeship starters has fallen by a third and the number of young people gaining an apprenticeship has halved.
The signatories, including the CEOs of Co-op Group and holiday park company Parkdean Resorts, say they support Labour’s approach to provide ‘more adaptable training’, offering learning across a range of skills.
“Billions have been lost despite the skills shortage. We need a fresh approach to ensure everyone has opportunities, businesses have the right skills and our economy thrives,” the report said.
“We therefore support Labour’s plans for a skills and growth levy to both protect apprenticeship funds and give us the flexibility we need for workforce training. The criticism of this flexibility, which claims that it will lead to fewer training opportunities, is wide of the mark.”
Other signatories include the CEOs of hospitality groups such as Stonegate, Britain’s largest pub company, Revolution Bars and UK Hospitality. Executives from property group British Land, airline Jet 2 and fast food chain KFC also signed with restaurateur Tom Kerridge.
The letter supporting Labor comes as the Conservatives unveil their ‘business plan’. The plan says Labour’s pledge to strengthen workers’ rights and roll back anti-union legislation would make it harder for companies to train young workers and take over unproductive staff.
The Tories’ plan includes a pledge to extend the “full cost” tax break to assets leased by companies, in addition to those they buy outright. The party’s manifesto pledges to implement the change “as soon as budgetary circumstances permit”, reiterating a commitment made in the March budget.
The popular tax break aims to increase productivity by allowing companies to immediately deduct the full cost of investments in new plant and machinery rather than spreading the costs over several years, saving up to 25 cents in tax for every £1 of capital investment.