Since Johnson and Corbyn have both been speaking to the CBI today, here is a thread on how this election could affect business, from our point of view as a medium-sized manufacturing business that is not represented by the CBI or any other lobbying group. 1/n
It's welcome that the Conservatives now say they will delay the unwarranted reduction in corporation tax they had planned. However, they should go further and recognise that all their corporation tax cuts since 2010 have done nothing to incentivise business investment... 2/n
... because corporation tax rates are already low compared to other countries. Investment is being held back by lack of demand in the economy due to austerity, which has delayed our recovery after the 2008 financial crash. 3/n
Before the Conservative & Lib Dem cuts, we already had a capital allowance scheme that incentivises businesses to reinvest profits in productive capacity. Cutting corporation tax just incentivises rent-seeking and monopolistic profit extraction..., 4/n
... depriving public services of much-needed funds while the very infrastructure on which business depends crumbles. The Conservatives would be better off reversing all the corporation tax cuts they enacted. 5/n
Labour’s policy of increasing corporation tax back to 26% seems eminently sensible and good for business. It would still be lower than the rate in 2010 and lower than many European countries. 6/n
The reckless flirtation with a no-deal Brexit has already cost our business dearly, along with many others. In September we were very close to winning a substantial contract to supply a major supermarket chain in central Europe with various food products throughout 2020,... 7/n
... to be manufactured in the UK. They were happy with our prices and our quality standards but at the last minute we heard that due to the uncertainty over Brexit they (quite understandably) couldn’t give any new contracts to UK manufacturers for 2020. 8/n
Johnson’s proposed Brexit deal would be better than a no-deal Brexit but that is the only positive thing we can find to say about it. So much damage has already been done by the way the government has approach the Brexit negotiations. 9/n
The withdrawal agreement poses a threat to our sales in Northern Ireland. If that Brexit deal goes through we would probably lose some of our Northern Irish customers to competition from the Republic of Ireland, as there would effectively be a border in the Irish Sea. 10/n
A new trade deal with the USA doesn’t just pose threats to the NHS. It would likely have very negative effects on the UK food industry. One example is pesticide residues in spices. 11/n
In many spice-growing regions there is widespread use of pesticides that are harmful to human health and the environment. The EU takes a stringent approach to their regulation and bans import of food products with residue of harmful pesticides. 12/n
This aligns with the interests of a supplier like Natco Foods because we would in any case keep such harmful substances out of our supply chain. However, if the UK leaves the EU regulatory framework and seeks independent trade deals,... 13/n
... we see a grave risk that such regulations would be watered down as part of the negotiations. We would have to compete with cheaper spices that contain harmful pesticides and consumers would have little way of knowing which products conform to which standards. 14/n
Labour’s policy of alignment with the single market (whether or not we leave or remain after a second referendum) would give us the certainty that we would not face competition from inferior, dangerous food products entering the market. 15/n
Keeping these sensible regulations in place is only part of what's needed. Even now, while Brexit hasn’t happened, businesses like ours suffer from lack of enforcement. 16/n
Chronic underfunding of the regulatory state means that unscrupulous competitors can get away with importing spices with illegal pesticides, illegal colours, salmonella, etc. and hope that they won’t get caught because enforcement is so weak. 17/n
Many people don’t realise how much illegal activity goes on in the commercial world, whether it is avoiding import duties, VAT fraud, tax evasion, or breach of contract. 18/n
Recruiting more police officers, which both main parties are committed to, will not do much to help that since no priority is given to so-called “white collar crime” anyway. 19/n
Due to the huge cuts to the justice system over 9 years, enforcing a civil contract in the courts is so difficult, delayed & costly, that businesses are often able to bully each other, breach contract knowing that the other party will prefer to settle than take legal action. 20/n
The idea that UK business is hampered by red tape is laughable. We are fortunate that norms of relatively honest business prevail to some extent but we are in danger of throwing that away in the service of an extreme deregulatory ideology that would be a race to the bottom.. 21/n
... of worker and consumer rights, and environmental standards. That is not the kind of business environment that we would welcome. It would serve only the sociopathic and monopolistic tendencies within the economy. 22/n
It would be great if Chancellor Sajid Javid and John McDonnell would debate these issues together. We understand that McDonnell has said he would like to but Sajid Javid is so far refusing a debate. Hopefully Javid can be persuaded to change his mind! 23/23
Wow! This blew up! Check out this interview we did about our rights-based philanthropy in India burntroti.com/blog/meet-natco
