Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The Labour party has secured a fresh 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 the Labour plan for a new “growth and skills levy” include executives from several large companies including the pub group Fuller’s, outsourcers Serco and Mitie, and Merlin Entertainments, the owner of Madame Tussauds which is backed by private equity group Blackstone.
Labour will argue that the intervention highlights how it has won broad support from the business world. Last month it published a letter in which more than 100 business people endorsed the party, though few of the signatories were current executives at large companies.
By contrast, the Conservative party’s attempt to garner support from senior business chiefs has largely fallen on stony ground. The FT revealed three weeks ago that the party was instead trying to launch a letter of support from small and medium-sized enterprises.
In part, business support for Labour reflects attempts by leader Sir Keir Starmer and shadow chancellor Rachel Reeves to take the party into the centre ground, promising fiscal probity and a return to stability after years of political chaos. It may also reflect the realpolitik that Labour is 20 points ahead of the Conservatives in the opinion polls.
Labour has vowed to rip up the existing apprenticeship levy, which has been unpopular with many business leaders, and produce a “growth and skills levy”. This would allow firms to use up to 50 per cent of their levy contributions to fund training through routes other than apprenticeships. Proponents say this would bring the English system into line with the rest of the UK and many other countries.
The new letter — to be published on Thursday — warns that the number of apprenticeship starts has dropped by a third and the number of youngsters achieving an apprenticeship has halved.
The signatories, who include the chief executives of Co-op Group and holiday parks company Parkdean Resorts, say they endorse Labour’s approach to have “more adaptable training”, offering learning across a range of skills.
“Billions have been lost, unspent despite skills shortages. We need a fresh approach to ensure everyone has opportunities, businesses have the right skills, and our economy thrives,” it says.
“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. Criticisms of such flexibility, which claim it will lead to fewer training opportunities are way off the mark.”
Other signatories include the chief executives of hospitality groups such as Stonegate, Britain’s biggest pub company, Revolution Bars and UK Hospitality. Executives from property group British Land, airline Jet 2 and fast-food chain KFC also signed along with restaurateur Tom Kerridge.
The letter backing Labour has come as the Conservatives unveil their “plan for business”. The plan argues that Labour’s promise to boost workers’ rights and roll back anti-union legislation would make it harder for companies to train young workers and move on unproductive staff.
The Tories’ plan includes a pledge to extend the “full expensing” tax break to cover assets leased by business in addition to those they buy outright. The party’s manifesto has promised to make the change “once the fiscal conditions allow”, repeating a commitment in the March Budget.
The popular tax break is intended to boost productivity by allowing companies to immediately deduct the full cost of investments in new plant and machinery instead of spreading the cost over multiple years, saving them up to 25p in tax for every £1 of capital investment.